LCQ22: Efficiency of radio spectrum utilisation
Following is a question by the Hon Charles Mok and a written reply by the Secretary for Commerce and Economic Development, Mr Gregory So, in the Legislative Council today (June 29):
It is learnt that the volume of local mobile data transmitted has surged over the past few years. With the growing demand for mobile communications services and the development of Internet of Things (i.e. a system in which objects in the physical world are connected to the Internet via sensors) and Smart City, the demand for radio spectrum has been increasing incessantly. However, the information released by the Communications Authority (CA) indicates that from this year up to 2018, there will not be any new supply of frequency bands available for allocation for use by operators of mobile communications services. On the other hand, the International Telecommunication Union has recommended that the governments of various countries should make available an additional 600-800 MHz of spectrum for meeting the expected demand upon the advent of the fifth generation (5G) mobile communications technology after 2020. Regarding the supply of and the demand for radio spectrum in Hong Kong, will the Government inform this Council:
(1) of the frequency bands involved in the allocation of spectrum by the authorities in each of the past five years, the method adopted for such allocation and the revenue from spectrum utilisation fees so generated (set out in a table);
(2) given that CA reviews the efficiency of the use of spectrum by or on behalf of the Government once every three years and the next review will be conducted within this financial year, of the timetable and details of the work concerned; whether CA will, when conducting the review, make reference to the new measures adopted by other advanced economies for the efficient use of spectrum; if CA will, of the details; if not, the reasons for that;
(3) given the surge in mobile data transmission in recent years, whether the authorities will conduct a comprehensive review of the local mobile communications services and the demand for spectrum, and take measures to promote the trading and sharing of spectrum, so as to better utilise the underused frequency bands, thereby improving the efficiency of use and the supply of spectrum; if they will, of the details; if not, the reasons for that; and
(4) whether the authorities will review the Radio Spectrum Policy Framework announced in 2007, and conduct studies and assessments on the middle and long-term demand for spectrum in future for the purpose of formulating a strategy to increase the supply of spectrum?
My reply to the Member's questions is as follows:
(1) The spectrum utilisation fees (SUF) revenues of the Government in the past five years (i.e. from year 2011-12 to 2015-16) are set out in the table at Annex.
(2) According to the Radio Spectrum Policy Framework (the Framework) promulgated by the Government in April 2007, the spectrum to be used by or on behalf of government is assigned and managed administratively. The Office of the Communications Authority (OFCA) reviews the efficiency of government spectrum utilisation every three years taking into account the measures adopted by other advanced economies, in order to promote the efficient use of the spectrum concerned.
OFCA conducted the first and second rounds of the Review of Efficiency of Spectrum Utilisation of Government Services (Review) in 2010 and 2013 respectively. The summaries of Review reports have been posted on OFCA's website (tel_archives.ofca.gov.hk/en/freq-spec/govt_review.pdf and www.ofca.gov.hk/filemanager/ofca/en/content_879/govt_review_2013_e.pdf). In the report of the second Review, OFCA recommended releasing some spectrum which was reserved for the Government but with relatively low utilisation level (covering 36.5 - 37.5 MHz, 40.7 - 45.5 MHz, 361 - 366 MHz and 381.325 - 382.65 MHz bands) for shared use between Government and private sectors. The recommendation concerned has been fully implemented.
OFCA is now conducting the third round of the Review for the spectrum used by the Government. The corresponding Review report, which is expected to be published in the first quarter of 2017, will cover the implementation progress of the measures recommended in the second Review.
(3) Spectrum is a scarce public resource. The CA ensures the efficient allocation and utilisation of radio spectrum in accordance with the authority conferred by the Telecommunications Ordinance and the guiding principles for spectrum management set out in the Framework. Under the said Framework, if there are competing demands for the spectrum concerned, the authority should adopt a market-based approach for the assignment of spectrum unless there are overriding public policy reasons to do otherwise.
Whenever the existing spectrum assignment periods expire, the CA will adopt the same principles to re-assign the spectrum, and appropriately align the frequency bands available for assignment with reference to the latest technological and market developments, so as to optimise the spectral efficiency when re-assigning the spectrum concerned. In terms of allocating radio spectrum to operators for provision of public services, the CA generally adopts a technology neutral regulatory approach. Operators may choose to upgrade their networks with more advanced and efficient technologies within the spectrum assignment periods by themselves, thereby enhancing the efficiency in spectrum utilisation.
To make more efficient use of the scarce radio spectrum resources in order to satisfy the surging demand for mobile data, the CA allows operators to share mobile network facilities and the relevant assigned spectrum in various ways on the basis of compliance with licence requirements, so as to lower operating costs and to enhance efficiency in spectrum utilisation. The CA will also consider mobile network operators' proposals on swapping spectrum provided that the swapping improves the efficiency in spectrum utilisation and does not involve monetary exchange.
Spectrum trading is a complicated issue and involves a number of implementation problems, including the ways to prevent mobile network operators from acquiring more spectrum to lessen market competition and the eligibility of participants, etc. The Framework sets out the policy inclination to introduce spectrum trading in Hong Kong in the long term, subject to a feasibility study and resolution of various implementation issues. We are preparing to conduct a consultancy study on spectrum trading to understand the latest overseas experience including the updated market situation in order to chart the way forward. The consultancy study is expected to commence in the second half of this year.
Looking ahead, we believe there will be greater demand for radio spectrum from the development and commercial applications of the fifth generation (5G) mobile technologies. Currently, it is generally anticipated that 5G mobile services will be launched in the market in around 2020. Since it is expected that 5G services will use radio spectrum above the 6 GHz band, the CA will closely monitor the latest development in the international arena about the allocation of the concerned spectrum for the provision of 5G services, and plan for the necessary supply of spectrum having regard to the actual situation in Hong Kong.
(4) As set out in the Framework, the policy framework will be reviewed, revised, modified and updated from time to time by the Government as it thinks fit having regard to all relevant circumstances including but not limited to the latest technological, market and societal developments in Hong Kong and internationally, as well as further deliberations in key issues related to spectrum policy and management.
For the spectrum demand in the future, we will make an assessment in the consultancy study evaluating the future demand and supply of telecommunications infrastructure capacity in Hong Kong, which will be conducted in the second half of this year.
Ends/Wednesday, June 29, 2016