25 October 2019

Today’s announcement of the UK Shared Rural Network (SRN) proposals is very welcome – a great example of government and industry working together to find a solution to the ‘not-spot’ problem. Under the proposals, operators will work together to provide coverage in rural areas, sharing passive infrastructure (sites, towers) to make use of existing sites deployed by individual operators as well as building new sites. As a result, Ofcom is now expected to remove the auction of coverage obligations from its proposals for the auctioning of 700MHz and 3.6-3.8GHz spectrum, as the UK SRN would meet the coverage objectives.

When regulators/governments consider the imposition of coverage obligations or similar, it is worth assessing these in the light of the underlying objective that is trying to be achieved. Often the focus is on attaching coverage obligations to new spectrum band awards, however, that approach may not resolve all mobile coverage issues that governments are seeking to address.

In this article, we consider the different coverage objectives that governments/regulators may have, together with possible implementation approaches. We discuss three potential coverage objectives – increased rollout speed of new technology, removal of ‘partial not-spots’, and the removal of ‘not-spots’.

Increased rollout speed of new technology

This ensures a faster rollout of a new technology (e.g. 4G/5G) into areas previously covered by older technologies (e.g. 2G/3G). Deployments of new technologies naturally occur across the operator’s existing footprint for commercial reasons, but this would accelerate the rollout to improve the quality of service available to consumers earlier than otherwise would have occurred.

This can be implemented through various approaches:

1. Coverage obligations attached to spectrum in an auction – this approach is the most commonly used, with many examples existing across Europe. It is worth noting that since spectrum licences are now technology neutral, any coverage obligations must be sufficiently well-defined to ensure that the new technology is deployed.
2. Separate auction of coverage obligations – an example of this was seen in the Danish auction earlier this year, where three coverage obligation lots were awarded in the first stage of the auction.
3. Beauty contest award of spectrum – “comparative selection” – this can be highly subjective and subject to legal challenge.

Removal of ‘partial not-spots’

This objective ensures that, in a given area, a mobile service is available from all operators where only a subset of the operators (perhaps just one operator) currently provide a service. This would allow more choice of operator for the consumer, but also improve coverage for those consumers who pass through the area.

In addition to the approaches listed in the previous section, two additional implementations of this objective may be:

1. Encourage or mandate passive infrastructure sharing – this will reduce the cost of the initial site deployment for operators and encourage the expansion of each operators’ network.
2. Mandate national roaming – this has been proposed as a solution in the UK but was ultimately rejected by the operators due to the increased implementation costs. This also creates a disincentive for individual operators to extend coverage.

Removal of ‘not-spots’

The reduction of ‘not-spots’ – areas which are not covered by any of the operators at present – are becoming an objective for governments, as the focus switches from ensuring population coverage to reaching higher levels of coverage by area.

This objective could be achieved by:

1. Attaching coverage obligations to spectrum in an auction (as discussed previously)
2. A negotiated agreement between government and industry – such as the agreement announced today in the UK, which would ensure that the UK has overall 95% landmass coverage (with each operator having 92% coverage) by 2025. In addition, the French government has agreed to extend the duration of the existing licences for the 900MHz, 1800MHz and 2100MHz bands instead of holding an auction, in exchange for including new coverage obligations in the licences.

Conclusions

Historically, coverage obligations have been directly attached to spectrum as part of spectrum auction awards. However, the aim primarily was to accelerate the deployment of a new technology in areas already covered by older technologies.

This did not often address the wider objective of increasing the area over which any mobile network service was available. This is arguably more important to consumers, as mobile users complain more about inconsistent access to services wherever they travel than about slow network speeds within coverage areas. Today’s agreement is therefore very welcome in the UK, as it specifically addresses the wider coverage issue – including coverage of 16 000km of roads across the UK.