Study of methods for assessing the public value of satcom in a spectrum trading environment

Objectives

The radio frequency spectrum is a valuable resource. Governments have recognised spectrum as a national asset and market based solutions have been applied in some countries as one type of spectrum management tool. Market based solutions often maximise the “commercial market value” of spectrum yet other spectrum valuation schemes can include a broader assessment of the “Public Value” of spectrum.

Recent spectrum auctions indicate that the commercial market value of spectrum today is often driven by terrestrial mobile systems. This leads to a frequent requirement for the satellite communication industry to defend its spectrum. Satellite systems could compete more fairly in such a spectrum trading environment if the relative public value of different satellite communication systems and services were considered.

This study seeks to identify a flexible and generic framework for assessing the public value of radio spectrum as used by satellite services and to apply the framework to use cases for three commercial satellite services, namely fixed, broadcast and mobile satellite services. The framework will then be applied by assessing the public value implications of a number of current or recent regulatory issues.

The study will assist the satellite communication community in developing a more widespread understanding of the drivers of spectrum value for satellite communication systems.

Challenges

While there is now a well accepted methodology for assessing the public value of spectrum in a variety of other applications (e.g. mobile broadband, broadcasting, Wi-Fi and so forth) including the use of satellites for monitoring and scientific purposes this has not been widely applied to spectrum used by satellite communications services. Key issues in the application of the methodology to satellite communications concern:

  • Quantification of the potential market for new satellite services and the benefits these services offer,
  • Identification and quantification of benefits that satellite delivers over and above those offered by competing terrestrial networks,
  • Valuation of benefits to communities beyond Europe.

Benefits

For those situations where there are competing interests with respect to spectrum allocations, the framework will allow the public value of that spectrum to a satellite user to be assessed. This is an important component in any impact assessment that would likely be undertaken when assessing the most appropriate regulatory course of action.

Features

The approach to estimating overall public value taking account of the three elements of value – producer surplus, consumer surplus and external value is shown in the diagram below:


click for larger image

A number of use cases will be modelled in order to derive estimates of values for the inputs shown in the bottom line of the diagram above as these are required to calculate public value.

Plan

The work started on 1st November 2010 and was completed at the end of January 2012.

There were three phases of work; development of the public value framework, application of the framework to a number of case studies and the development of a roadmap as to how best to influence regulatory developments relating to spectrum allocations used by satellite communication systems.

Development of the framework involved discussions with a number of stakeholders in the satellite communication industry.

Current status

The first phase of the project was completed at the end of January 2011. That phase proposed the framework for assessing the public value of spectrum as used by satellite communication services, and identified a number of policy changes that formed the basis for the case studies examined in the second phase of the project. A final phase of the project outlined a roadmap as to how the work could be carried forward.

The results of the work were presented to the Agency’s Spectrum Management Advisory Group meetings in Paris on 25th January 2011 and Noordwijk on 4th October 2011.

The project has now been completed (31st January 2012) and the final report has been delivered to the Agency. The report outlines the framework that can be applied when valuing satcom spectrum and demonstrates how this framework can be applied through a number of case studies.

Contacts

Status date

Monday, February 27, 2012 - 14:29