Paradigm shift in spectrum management and the market for educational programmes: an analysis

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the market for educational programmes:

an analysis

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Paradigm shift in spectrum management and the market for

educational programmes: an analysis

Author Rutger A. Peters

Student number 1149350

University University of Groningen

Faculty Management of Organisation

Specialisation International Business

University supervisors Dr. ir. R. de Graaf

Drs. R.W. de Vries

Company Agentschap Telecom

Company supervisor Dr. H. Leonhard

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‘Wire telegraph is a kind of a very, very long cat: you pull his tail in New York and his head is meowing in Los Angeles. Radio operates exactly the same way: you send signals here; they receive them there. The only difference is that there is no cat.’

Albert Einstein1

1_{Ryan (2005) admits that there are no core sources for this quotation, although the ‘there is no cat’ metaphor is}

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Preface

The term paradigm shift in the title refers to the radical changes that are currently taking place in the spectrum management field. A paradigm can be regarded as a joint world-view that a group of people has, so a shift in this shared vision refers to seeing the world entirely different than before the shift. The shift also refers to my self-image. I have read a lot about organisations during my period as a student; conducting research in a real-life organisation is not something that can be learnt by reading a book. That can only be learnt by doing.

I would very much like to thank a number of people. First of all I would like to thank all the employees of the FIS-department of the Radiocommunications Agency in Groningen for all the pleasant talks and enlightening discussions, and special thanks to Helmut Leonhard for being my company supervisor during my internship. He provided me with valuable input about the concept of spectrum management, of which I never heard of before starting the research assignment.

Furthermore I would like to thank my supervisors from the Faculty, Rob de Graaf and Rudi de Vries, for challenging me to raise the level of this report.

Without the support of my parents, studying in Groningen would not even have been possible. So I would like to thank them both very much for giving me this opportunity.

Finally, I would like to thank all the people who took the time to read my concept versions. This also had its effects on the content of this report.

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Executive summary

Due the paradigm shift from the ‘scarcity’ paradigm to the ‘non-scarcity’ paradigm, the roles that institutions involved in spectrum management have to play are going to change dramatically. Since spectrum management has traditionally been a task of the government, industry parties that are going to be empowered to manage the spectrum themselves have a lack of knowledge of how to give right to this empowerment. To complicate matters, these industry parties are largely unaware of the implications of the changing roles.

There is also growing recognition that flexible spectrum policy has a significant contribution to economic growth, because it encourages innovation. However, innovative solutions are hampered by an insufficient integration of economic, legal, technical and societal aspects of spectrum management. Therefore, a transition to the new paradigm also requires a multidisciplinary approach to spectrum management.

This research assignment has been formulated in the context of a collaboration of the University of Groningen (UG) and the Dutch Radiocommunications Agency (RA). The assignment is to analyse whether a need for educational programmes about spectrum management already exists or will arise in the near future. The relevance of this research lies in the fact that an educational programme about spectrum management that gives right to the multidisciplinary approach is not present at knowledge institutions.

In this context, the main research question has been formulated:

What interventions have to be carried out to make the market for educational programmes aware of the changes that are currently taking place in the spectrum management field in such a way that the

development of educational programmes can be started?

The interventions are concerned with the development of educational programmes. The results of this research show that these interventions have to be carried out in the context of a collaborative relationship between the UG and the RA. It is recommended that the relationship between these institutions is intensified and that priority is given to the following issues:

• Develop a common language for spectrum management.

• Develop a shared vision on what educational programmes about spectrum management have to

contribute to the development of the spectrum management field.

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The results also show that the development of educational programmes has to be started right away. In 2010 the new approach will already enter into force and in order to prepare both the regulators and the users of frequency space properly, the educational programmes have to be pushed on the market. It is recommended to offer three elective courses about spectrum management: a course about multidisciplinary spectrum management, a course about spectrum regulation and a course about spectrum physics. In this way, the most important disciplinary areas are covered. These courses can be offered to both university students and external participants. This latter group can participate by means of contract education. In this way practical capabilities are connected with scientific models and this is an essential first step in getting the multidisciplinary approach to spectrum management from the ground.

The financial analysis, which includes the development of these elective courses, a Minor programme and a seminar, shows that the costs of the resources to be deployed for developing these types of education should not stand in the way of rapid introduction.

This research has been conducted in the transitional phase between two competing paradigms. When the transition has taken place, it is possible that types of education that require very high awareness levels, such as post-academic education and a Master programme, are offered at an educational institute. This research is perhaps the first step in that process.

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List of abbreviations

AVV General Studies Modules (Algemeen Vormende Vakken)

CE Contract Education

CEO Chief Executive Officer

CF Cash Flow

EBF Economic and Business student Faculty Association Groningen

EC European Commission

ECTS European Credit Transfer and Accumulation System

EU European Union

ESMC European Spectrum Management Conference

FCC Federal Communications Commission

GSM Global System for Mobile communications

ICT Information and Communication Technologies

ISM Industrial Scientific and Medical

MBA Master of Business Administration

NPD New Product Development

NPV Net Present Value

NWO Netherlands Organisation for Scientific Research

Ofcom Office of Communications

PAE Post-Academic Education

RA Radiocommunications Agency (Agentschap Telecom)

RSPG Radio Spectrum Policy Group

Sportviews Spectrum Policies and Radio Technologies Viable In Emerging Wireless Societies

TUD Technical University Delft

Telco Telecommunication Company

UG University of Groningen

UWB Ultra Wide Band

W-LAN Wireless Local Area Network

WAPECS Wireless Access Policy for Electronic Communications Services

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List of Figures

• Figure 2.1 – Cyclical method of integrating local knowledge and scientific knowledge (based on

Ramondt, 1996)

• Figure 2.2 – The reflective cycle (based on Ramondt, 1996) • Figure 2.3 – Duck-rabbit optical illusion

• Figure 2.4 – Generalised technology roadmap architecture (taken from Probert et al: 2003) • Figure 3.1 – Ladder of inference

• Figure 3.2 – The broader context of a development project (based on Ulrich & Eppinger: 2003) • Figure 5.1 – Emergent theory of partner selection for creating product advantage through

collaboration (taken from Emden et al: 2006).

• Figure 6.1 – Rings of awareness • Figure 6.2 – Supply/demand model

• Figure 6.3 – Types of education parallel with various levels of awareness • Figure 6.4 – Financial model for offering the educational programmes • Figure 6.5a – Results of financial analysis

• Figure 6.5b – Results of financial analysis • Figure 6.5c – Results of financial analysis

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Chapter 1 Introduction

1.1 Context of formulating the research assignment

The research assignment has been formulated in the context of a collaboration between the University of Groningen (UG) and the Agentschap Telecom, the Dutch Radiocommunications Agency, abbreviated as RA in the rest of this thesis. This research assignment concerns an investigation whether a need for educational programmes in spectrum management can be identified. Before this research problem is introduced in this chapter, the spectrum management fundamentals are addressed. 1.2 The concept of spectrum management

In short, the key element of spectrum management is avoiding (harmful) interference. The role of the spectrum manager is to ensure that no two users transmit on the same frequency at the same time and sufficiently close together that they interfere with each other (Ofcom2_{, 2004). The government – that} can be seen as the ‘spectrum manager’ in the current paradigm3_{– licenses the right to deploy} transmitters and receivers that operate in particular ways. Interference is a property of these devices, and therefore not some inherent property of spectrum. Thus, whether a new radio system interferes with existing ones is dependent on the imbedding in the actual national frequency (allocation) plan, and, of course, the equipment involved. Consequently, the extent in which there appears to be a spectrum shortage (i.e. ‘scarcity’) largely depends on the technologies that can be deployed and not on how many frequencies are available.

Guglielmo Marconi was the first who transmitted a wireless signal in 1897, which means that human interaction with wireless technologies has existed for just over one century. The first mass commercial deployment of digital signalling was the GSM launch in Europe in 1991. Long before this launch of digital technology, commentators such as the economist R.H. Coase were asking why the spectrum should be centrally planned while the rest of the economy was increasingly functioning according to market-based principles (Ryan, 2004). It took a number of decades for this critique to emerge, but it now acts as the basis for the discussion about spectrum management. The discussion focuses on which spectrum management approach to adopt, which is the subject of the next section.

2_{Ofcom stands for Office of Communications, the UK regulator.}

3_{The term paradigm was introduced by Thomas Kuhn in 1962 when his book ‘The Structure of Scientific} Revolutions’ was published. The terminology of this work is explained in section 2.2.

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1.3 Approaches to spectrum management

In this section the three main approaches for managing the radio frequency s are discussed. The three models are: 1) the traditional approach, 2) the market-based approach and 3) the commons approach. 1.3.1 Traditional approach

The traditional approach for managing the radio frequency spectrum – also referred to as the administrative model or the command-and-control approach – is rather outdated, because it is premised on century old radio technology (Lehr, 2005). In his 2005 article, Lehr provides a clear description of how the traditional spectrum management approach works. ‘Under the traditional approach, regulators allocate narrow frequency bands to specific uses and users under restrictive licences that constrain the choice of technology, business model and ability to redeploy the spectrum to higher values or to make use of new technologies’. Olafsson et al (2007) support this description by stating that ‘radio spectrum has traditionally been controlled by governments that have viewed spectrum as a scarce resource that needs to be controlled and allocated to users on a strict technology-defined basis’. Adopting the traditional approach has led to scarcity in certain frequency bands, but this scarcity is largely artificial as the technology (and not the spectrum itself) is the limiting factor. 1.3.2 Market-based approach

It is becoming clear that strict command-and-control management of the spectrum is not suitable for the increasingly dynamic nature of spectrum usage (Olafsson et al, 2007). This view is shared by the European Commission (EC): ‘spectrum markets can improve the efficiency of use of spectrum, since industry is better suited than regulators to identify the highest-value applications. The artificial scarcity of this good is to be tackled by creating a ‘free market’ of tradable rights to use particular frequencies according to market demand’ (EC, 2005-1). In another publication the EC states that ‘the market-based model should allow more freedom to market players to decide how spectrum should be used, and lowering the barriers for access to spectrum rights by making possible the trading of the rights’ (EC, 2005-2).

1.3.3 Commons approach

The commons approach is also referred to as the license-exempt domain, which concerns frequency use that is not subject to individual requirements4_{. A well-known example is WiFi, which includes all} kinds of household applications, such as remote control units and garage door openers (Dutch Ministry of Economic Affairs, 2005). WiFi operates in the ISM band5_{that was considered ‘garbage’ spectrum,} because it was already so encumbered with noise (Lehr, 2005). Other examples of recent technologies that make use of these bands are Wireless Local Area Networks (W-LANs). The tremendous success

4_{The absence of licenses does not mean that the use of these frequencies is entirely free; frequency usage in this}

domain is also subject to rules.

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of W-LANs - virtually all laptops have in-built W-LAN capabilities nowadays - provides strong support for the case of making more unregulated spectrum available for wireless access (Olafsson et al, 2007; Webb, 2007).

Thus, a central issue in the spectrum discussion focuses on the balance between licensed and license-exempt spectrum (Olafsson et al, 2007). This section has pointed out that in spite of the fact that it is hard to predict how the management of spectrum will evolve in the future, it is evident that it will be much more dynamic than today.

1.4 Paradigm shift

Ryan (2005) writes in his article about a paradigm shift in thinking about the electromagnetic spectrum. He states that the nature of this resource has been grossly misunderstood by governments for decades. When talking about the spectrum, ‘we continue to believe that the spectrum is something tactile that we can hold onto, something scarce that might disappear if we do not limit its use, and something we can centrally control’ (Ryan, 2005). However, the spectrum is a non-depletable natural resource and in spite of the fact that new digital protocols allow us to benefit from this quality of the spectrum, we continue to grant corporations, governments, and military organisations monopoly control over areas of spectrum through a centrally command-and-control system.

According to Ryan (2005) ‘we are currently in the process of comparing an old paradigm (based upon the premise that the spectrum is scarce) with a new one (based upon the premise that the spectrum is not scarce). This new paradigm will trigger a massive revolution in the way wireless communications are regulated’. Olafsson et al (2007) add that we are in a ‘paradigm shift from static spectrum management to dynamic spectrum access and management’. They add that ‘a new multidisciplinary approach to spectrum management is required, which will require inputs from technology, economics and regulation’.

The future spectrum management approach will be a combination of the three approaches mentioned in the previous section. This statement is confirmed by the Radio Spectrum Policy Memorandum (2005), in which three frequency use domains are distinguished: 1) the public-interest domain; 2) the licensed spectrum domain; and 3) the license-exempt domain.

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Illustrative case: Google plans to participate in the upcoming auction for radio spectrum

To illustrate the implications of changing the traditional spectrum management approach a recent news bulletin6_{is described. This case is used as a practical example, and legitimates usage of the term} paradigm shift in spectrum management.

Google CEO Eric Schmidt declared on Friday July 20th_{2007 that he sent a letter to FCC}7_Chairman Kevin Martin saying the company will commit $4.6 billion to the auction for radio spectrum in the 700-MHz band if certain ‘open’ measures are included in the plan. In his letter, Schmidt mentioned four types of what he called ‘open’ platforms:

• Open applications: consumers should be able to download software applications and content, and

use services without restrictions;

• Open devices: consumers should be able to use any type of handheld communications device and

not be limited to those provided by or approved by the wireless service provider;

• Open services: third-party resellers should be able to obtain wholesale bandwidth or wireless

service from any company that ‘wins’ a 700 MHz license;

• Open third-party networks: other networks should be able to interconnect at technically feasible

points with a 700 MHz licensee’s wireless network.

Whether these four conditions are going to be met by the FCC or not, this case clearly is a practical example of the changing dynamics in the telecommunications industry. According to Steve Arnold, a Google expert, the company is now openly committing itself to become a telephone company. This is because Google’s network of data centres and WiFi experiments enable Google to offer services and products generally associated with telecommunications. Furthermore, this case shows the efforts of a potential new entrant that makes an aggressive move to influence the regulator, instead of the other way around. Also, these open measures contrast heavily with the restrictive licenses in the traditional spectrum management approach. Finally, this case illustrates the emergence of new concepts in spectrum management, such as tradability of frequencies and their valuation.

1.5 Introduction of main research problem

The recognition that the traditional spectrum management approach is too rigid to cope with the changing dynamics is one of the main causes for the paradigm shift in the context of spectrum management. There is growing agreement that more flexibility is needed to address the problems associated with the rigidity of the traditional approach. However, this increase in flexibility implies a change in the roles the regulators and the users of frequency space have to play. Therefore, a need for knowledge will arise because of a lack in experience in performing these new roles. Complicating

6_{http://www.eetimes.com/showArticle.jhtml?articleID=201200317} 7_{FCC stands for Federal Communications Commission, the US regulator.}

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matters, these institutions seem to be largely unaware of the fact that these roles are going to change. There is also growing recognition that a new multidisciplinary approach to spectrum management is required. This approach will require inputs from technology, economics and regulation.

The research has been formulated because an educational programme about spectrum management that gives right to the multidisciplinary approach is not present at knowledge institutions. This research is about analysing whether a need for these educational programmes already exists or will arise. Furthermore, this research focuses on the roles that are to be played by the client organisations: the University of Groningen and the Dutch Radiocommunications Agency.

1.6 Research goal

The introduction of the main research problem has resulted in the statement of the research goal:

1.7 Relevance of this research

Industry parties do not yet have the knowledge about how to manage the spectrum and developing educational programmes is a way to fill this knowledge gap. Several institutions can play a role in this development and that is where this research becomes relevant. It is about identifying why this need will arise, which institutions have to be involved and when the various types of educational programmes have to be offered in order to prepare the institutions involved properly for the future roles they are going to play.

1.8 Structure of this thesis

Chapter 2 is about the research design. In this chapter, the research process is described, the problem is defined, the conceptual model is constructed, and finally the research questions are formulated. Chapter 3 is about the research methodology, where the research is typified and an overview is given of the theoretical concepts that are applied for answering the subquestions. Chapters 4 to 6 will answer the subquestions. In Chapter 4 the drivers for change are identified and also the initiatives to change current spectrum management are mentioned. Chapter 5 focuses on the roles that the academic community, industry parties and the government have to play concerning the development of the educational programmes. Chapter 6 deals with the interventions of the academic community, or more specifically: the development of the educational programmes. In Chapter 7 the main research question is answered, recommendations are given, and the research is also subjected to a critical reflection.

‘To give recommendations about what has to be done to make the market for educational programmes aware of the changes that are currently taking place in the spectrum management field

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Chapter 2 Research design

2.1 Introduction

The method of Action Research can be applied to describe the research process, because in this research two clients are involved. Therefore, this chapter takes off with a description of Action Research before arriving at the problem definition, the conceptual model and the research questions. 2.2 Action Research

Action Research can be regarded as an inclusive method because it works with systems in which two clients are involved. There is a commitment between the researcher and the participants in the research field to come to an enlargement of knowledge and insight by means of a joint effort. This implies a frequent interaction between the researcher and the participants in the research field which leads in practice to a cyclical method, as illustrated in Figure 2.1.

Figure 2.1 – Cyclical method of integrating local knowledge and scientific knowledge (based on Ramondt, 1996) Analysis- Diagnosis- Action Local knowledge Scientific knowledge Analysis- Diagnosis- Action Scientific knowledge Local knowledge Organisational

problem Organisational problem

T1 Researcher RA/UG T1 T3 Researcher T2 Researcher RA/UG T3 RA/UG T2

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The cyclical character of Action Research is reflected by short research steps, in which the research findings are fed back to the client organisations. After each cycle, the question is raised whether the organisational problem (i.e. the research question) needs to be reformulated or sharpened. In this cyclical process, the role of theories is heuristic: they help to find the good questions and answers. Based upon the dialogue between the clients and the researcher, that is: an integration of local knowledge and scientific knowledge, the research questions are reformulated. This cyclical process repeats itself until the formulation of the research questions is satisfactory for all the participants. Furthermore, in each research step the same cycle of activities is performed and a step has not been finished until the reflective cycle has been completed. The subsequent activities of this reflective cycle – description and analysis, diagnosis, and action and evaluation – are presented in Figure 2.2.

COMMUNICATION STRUCTURE

ACTIVITIES CONTENT BEHAVIOUR

• DESCRIPTION/ANALYSIS • DATA COLLECTION

• SORTING INFORMATION

• ANALYTICAL SCHEMES

• SELECTION OF THEMES FOR FURTHER RESEARCH

• BEHAVIOUR: INTERVIEWER

• DIAGNOSIS • DEEPENING OF INSIGHTS

• VERIFICATION OF INSIGHTS

• BEHAVIOUR: DIALOGUE

• ACTION AND EVALUATION • SUGGESTIONS FOR

CHANGES

• PARTICIPATION IN SETTING UP ACTION PLANS

• EVALUATIONS OF RESULTS

• BEHAVIOUR: THERAPEUTIC

Figure 2.2 – The reflective cycle (based on Ramondt, 1996) In the context of this research, the activities from Figure 2.2 reflect the following tasks:

• Description/analysis: description of analytical terms from the theories;

• Diagnosis: deepening of insights is about translating the theoretical terms to the practical problems

of the client organisations by means of a dialogue;

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The research steps (indicated by T1-T3) are addressed in the remainder of this section. T1: Is there a need for educational programmes?

This research was initially focused on investigating whether a need for educational programmes in spectrum management could be identified. The result of the analysis in the first cycle is that the future need for educational programmes is for a large part caused by the current paradigm shift in the spectrum management field. This insight is based on analysing the most important terms from the theory of Thomas Kuhn.

Description/analysis: Paradigm shift

The term paradigm was introduced by Thomas Kuhn in his book ‘The Structure of Scientific Revolutions’, firstly published in 1962.

Paradigms serve implicitly to define and legitimate problems and methods of a research field for succeeding generations of practitioners. This is possible, according to Kuhn, because paradigms share two essential characteristics. To qualify as a paradigm, they must be sufficiently:

1. Unprecedented to attract an enduring group of adherents away from competing modes of scientific

activity.

2. Open-ended to leave all sort of problems for the redefined group of practitioners to resolve.

The term paradigm is according to Kuhn closely related to the activity of normal science, which ‘is predicated on the assumption that the scientific community knows what the world is like’. Kuhn also states that ‘a shift in professional commitments to shared assumptions takes place when an anomaly subverts the existing tradition of scientific practice. These shifts are regarded as scientific revolutions: ‘the tradition-shattering complements to the tradition-bound activity of normal science’.

Historians of science may be tempted to exclaim that ‘when paradigms change, the world itself changes with them’ (Kuhn, 1970). What happens during the revolutionary transition from one paradigm to another has according to Kuhn strong similarities with what is called a ‘Gestalt shift’ in psychology (Klukhuhn, 2003). The most famous illustration is showed in Figure 2.3: the optical illusion that can be interpreted as either a duck or a rabbit. Both

interpretations are incompatible: a synthesis that accounts for both interpretations is logically impossible. The transition between the paradigms on which the interpretations are based is irrational and the new interpretation means a revolutionary breach with the old one. As Kuhn (1970) puts it: ‘what were ducks in the scientist’s

world before the revolution are rabbits afterwards’. Figure 2.3 Duck-rabbit optical

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Diagnosis

The ‘anomalies’ in the context of spectrum management are new technologies that put pressure on the exclusive usage of spectrum bands, because these technologies allow collective use of spectrum. This dynamic usage of spectrum contrasts heavily with the command-and-control approach. Regulators do not have sufficient understanding of the evolving spectrum requirements of new and emerging technologies (Olafsson et al, 2007). This statement had been confirmed during discussion sessions with the client organisations.

The revolutionary breach from the old to the new paradigm is illustrated by the contrasting terms that are used to describe both paradigms. The old or ‘scarcity’ paradigm is associated with terms as ‘rigidity’, ‘static’, ‘exclusive use’, ‘technical efficiency’, and ‘monodisciplinary approach’. In contrast, the new or ‘non-scarcity’ paradigm is associated with terms as ‘flexibility’, ‘dynamic’, ‘collective use’, ‘both technical and economic efficiency’ and ‘multidisciplinary approach’.

This breach also has its implications on scientific activity. There is significant evidence that scientists do not know what the ‘world’ (i.e. approach to spectrum management) is like. The revolution leads to new research topics.

Action and evaluation

At the end of this first cycle, all the research participants came to realise that there is a significant need for knowledge, but also that it is a little too early to specify the content of educational programmes. The focus of this research took a shift to awareness creation, which led to the reformulation of the research question. In effect, a new cycle started.

T2: How should market awareness be created? Description/analysis: Technology roadmap concept

In this context, the technology roadmap concept refers to the promotion of educational programmes about spectrum management; the concept represents the ‘push’ of a knowledge-intensive service, as illustrated in Figure 2.4.

Figure 2.4 presents a layered chart which represents the linkage between knowledge, product and market. Future spectrum management (after the paradigm shift) is in the predevelopment stage: the ‘technology’ (the knowledge about spectrum management) has to mature before products/services (the educational programmes) can be constructed. Therefore, interventions have to be carried out in order to raise the level of awareness, which will facilitate the transition from technology push to market pull.

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When the transition has taken place, the market will put forward their demands about the service characteristics (i.e. the educational programmes).

Figure 2.4 – Generalised technology roadmap architecture (taken from Probert et al, 2003) Diagnosis

Verifying this insight by means of a dialogue with the client organisations led to the recognition that the EC has also been trying to raise the level of awareness of various market parties. By reading reports and publications in which these EC initiatives are described, it became clear that spectrum policy has a significant contribution to the economic development of the entire EU. This is because flexible spectrum policy encourages innovation. In order to reach this innovative potential the establishment of collaborative university-industry-government relationships is of crucial importance. This is exactly one of the central elements of the Triple Helix thesis.

Based on the insight that university-industry-government interactions are of crucial importance for innovation to occur, the research question was reformulated. This triggered the start of the third cycle. T3: What roles do the academic community, the government and industry parties have to play in developing the educational programmes?

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Description/analysis: Triple Helix thesis

The Triple Helix model comprises three basic elements (Etzkowitz & Klofsten, 2005):

1. It presumes a more prominent role for university in innovation, on a par with industry and

government in a knowledge-based society.

2. A movement towards collaborative relationships among the three main institutional spheres in

which innovation policy is increasingly an outcome of interaction rather than a prescription from government.

3. In addition to fulfilling their traditional functions, each institutional sphere ‘takes the role of the

other’ operating on a y-axis of their new role as well as on an x-axis of their traditional function. Diagnosis

The adoption of theoretical statements to the practical situation became the centre of attention. The Tripe Helix thesis states that the university has to play an active role in economic and social development, rather than playing the traditional supportive role. This is the defining characteristic of the ‘entrepreneurial university’ (Etzkowitz & Klofsten, 2005). In the context of this research, this active role is concerned with carrying out interventions: the push of educational programmes. The collaborative relationship is that between the RA and the UG. Both client organisations agreed on adopting this theoretical model. In addition, the UG demanded a specification of the suitable types of education and their feasibility.

The focus shifted to the development of a business plan for the whole cycle of educational programmes to be offered. Relevant factors are the time frame in which these programmes are to be developed, a determination of the (financial) feasibility of the whole cycle, and which parties to involve. This cycle is finished after the identification of suitable types of education, performing the financial analysis and writing this report.

2.3 Problem definition

Based on the process description, the research problem is defined in this section. The two significant aspects which lead to a significant need for knowledge are: 1) the knowledge and experience in managing the spectrum and 2) the degree of attention for a multi-disciplinary approach to spectrum management.

Knowledge and experience in managing the spectrum

The users of frequency space have insufficient experience in managing the spectrum, this is because knowledge about how to manage the spectrum is primarily located at government agencies. The following quotation is taken from the Dialogic ‘Innovatie en Interactie’ – a study about spectrum

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management that was conducted by order of the Dutch Ministry of Economic Affairs – to illustrate this8_:

‘Op zich is de beperkte kennis ten aanzien van (innovatief) frequentiemanagement buiten de overheid niet zo vreemd, omdat frequentiemanagement tot enkele jaren terug volledig een overheidstaak was. Aangezien veel buitenlandse bedrijven in Nederland, bijvoorbeeld telecommunicatieaanbieders, vooral verkoopkantoren zijn van internationale ondernemingen die buiten Nederland onderzoek doen, ligt het niet in de lijn der verwachting dat de initiatieven tot innovatiegericht frequentiemanagement vanuit het bedrijfsleven zullen komen. De markt zal ook niet stimuleren dat er een opleiding komt aan een Nederlandse hogeschool of universiteit (een voedingsbodem voor innovatiegericht frequentiemanagement op langere termijn). Verschillende partijen hebben gezegd dat zij geen behoefte hebben aan een opleiding frequentiemanagement’ 9_{(Dialogic, 2005).}

This study was conducted in 2005 and no significant changes in attitudes of market parties have been noticed during the time of my research. The problem is that there is clearly a lack of knowledge, but the industry parties do not see the point to stimulate the development of educational programmes about spectrum management.

The degree of attention for a multi-disciplinary approach

Research conducted in the area of spectrum management has a strong mono-disciplinary (e.g. technical, economical, legal or sociological) character. There is sufficient attention for and recognition of the need for a multidisciplinary approach, but in order to benefit of such an approach some deepening of understanding is necessary. This has to be done, because at the moment there is neither ability nor willingness to understand the interests of other parties. The multidisciplinary approach remains rather superficial when the need for a shared vision is not recognised. For well-functioning of future spectrum management, various institutions have to establish collaborative relationships in order to adopt a truly multidisciplinary approach.

Based on the description of these aspects, the research problem is defined as follows:

8_{Note the excessive use of the term ‘frequentiemanagement’ in the quotation, while in the international literature}

there is mainly spoken of ‘spectrum management’. In this thesis, the term ‘spectrum management’ is used.

9_{‘The lack of knowledge about (innovative) spectrum management outside the government is understandable,} because spectrum management has been a government task, until a couple of years ago. Because many foreign firms in the Netherlands, for example providers of telecommunication services, are mainly sales offices of foreign companies that conduct research outside of the Netherlands, it is not in the line of expectations that the initiatives for innovation-oriented spectrum management are taken by the industry. The market will also not stimulate that an education in spectrum management will come at a Dutch educational institute (which is a breeding ground for innovation-oriented spectrum management in the long run). Various parties have stated that they have no need for an education in spectrum management’ [Translated by RP].

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The changing of roles leads to a need for knowledge, but there is clearly a lack of awareness of this need. In 2010, the new approach will be introduced and in order to prepare the target groups properly, educational programmes have to be pushed on the market. Since the UG has neither a research tradition nor experience in offering such programmes about spectrum management issues, it has to approach the RA for performing an advisory role in developing them. In turn, the RA does not have a tradition in treating multidisciplinary spectrum management problems scientifically. So, both institutions have a significant need for knowledge. The important issue is whether these needs can be fulfilled by establishing a collaborative relationship between the UG and the RA. This collaborative relationship should also take the need for a multidisciplinary approach into account.

2.4 Future market for educational programmes

The preceding sections point out that a need for knowledge arises in the near future, and that various parties will demand for knowledge about multidisciplinary spectrum management. In the context of this thesis, the market concept refers to the market for educational programmes about spectrum management. This section is about identifying the parties on both the demand side and the supply side. 2.4.1 Demand side

To illustrate the roles the various actors have played traditionally, the demand side of the market for educational programmes is divided in two parts. The division between these parts is based on whether the market parties have experience in managing the spectrum:

• Public (or traditional) market: the market of regulators10_{and other public institutions who are not} yet aware of the changes in the spectrum management field and who are also unaware of the fact that the commercial market will take over several of their tasks in the near future.

• Private (or commercial) market: the market of users of frequency space who are unconscious of

the changes and who do not have experience in spectrum management themselves. The users of frequency space can be classified as follows11_:

- Students;

- Operators of fixed and mobile networks;

- Broadcasters;

- Service providers;

- Manufacturers.

2.4.2 Supply side

The academic community (of which the UG is a representative) is regarded to be the supply side on the market for educational programmes. However, the need for these programmes is not yet

10_{The argument to include regulators in the market concept is that they make use of frequency space as well.} 11_{Note that the consumers or end users are not included in this classification of users, since this is unusual in the}

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recognised on the demand side. Therefore, the supply side has to anticipate on this unawareness by developing educational programmes to satisfy the need that will arise in the near future. Several faculties are going to be involved in developing these programmes:

• Faculty Management, Organisation & Economics; • Faculty of Law;

• Faculty of Mathematics and Natural Sciences.

In order to develop these programmes, universities have to approach several parties that can play a role in developing them.

2.5 Conceptual model

Since the market for educational programmes currently does not exist some preliminary steps to create such a market are necessary. This is visualised by the dotted line in the model. The area below the dotted line represents the future market for educational programmes about spectrum management on which the needs for these programmes can be adequately expressed by both the supply side and the demand side. Before these needs for education can be adequately expressed some interventions have to be carried out. These interventions concern further improving the level of attention of the academic community and the level of awareness of the target groups. Both this attention and awareness have already been triggered by the drivers for change.

Attention of the academic community

Drivers for change

INTERVENTIONS Awareness of target groups

Needs for education in spectrum

management DEMAND

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2.6 Research questions

The main question is formulated as follows:

The subquestions have been formulated in order to answer the main question adequately. 1. What are the main characteristics of the current situation that are drivers for change?

The identification of the drivers for change leads to an insight in the essential characteristics of the spectrum management field in the near future. This first subquestion will be answered in the first part of Chapter 4.

2. Which initiatives to change current spectrum management can be observed?

The European Commission has already noticed the drivers for change and therefore some initiatives have been undertaken to reach market awareness. Identifying these initiatives could lead to a proper insight into the elements of spectrum management a future educational programme should focus on. This second subquestion will be answered in the second part of Chapter 4.

3. What roles do the academic community, the government, and industry parties have to play in developing the educational programmes?

The various institutions in the subquestion have been identified with the help of the Triple Helix concept, which is further explained in section 3.4. The university-industry-government relations are analysed in order to come up with recommendations about the roles these institutions should play in developing valuable educational programmes. This subquestion will be answered in Chapter 5. 4. What types of education are the most appropriate to be offered by the academic community? This concerns an identification of which types of education are suitable for satisfying the future needs of the demand side and whether the identified types of education fit into the curriculum of the university. This will be the subject of Chapter 6.

What interventions have to be carried out to make the market for educational programmes aware of the changes that are currently taking place in the spectrum management field in such a way that the

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Chapter 3 Research methodology

This chapter is about the methodology of the research. Methodology is the doctrine of critically looking at research and its results. Furthermore, methodology helps the researcher to make decisions about the way these results can be obtained (De Leeuw, 2001). Specifically, it concerns what data collection methods are adopted to answer the formulated subquestions.

3.2 Type of research

A characterisation of various types of research to the desired outcomes (the knowledge product) will help researchers to create a strong fit between the research results and the need for knowledge of the client organisation (De Leeuw, 2001). In addition, such a characterisation helps with selecting a suitable research method.

De Leeuw (2001) makes a distinction between scientific research and practical research. The desired knowledge product for scientific research concerns making a contribution to the general knowledge base of a particular discipline; for practical research it concerns meeting the need for knowledge of a client organisation. Since this research has two concrete client organisations that both have a significant need for knowledge, it can be typified as practical research.

Furthermore, the product characterisation is based on the distance between the research (as a product) and the client organisations. In Chapter 2 we have seen that the distance between the research(er) and the client organisations actually was really small; the formulation of the main research questions had been the result of a collaborative effort. Therefore, the research process can be typified as Action Research, because the total problem of the client organisations (in this case the RA and the UG) was explored. In the context of this research, ‘total problem’ refers to the broad concept ‘need for educational programmes about spectrum management’.

3.3 Data and data collection methods

The different categories of literature resources represent the flow of information from the original source. Primary literature sources are the first occurrence of a piece of work, whereas secondary literature sources, such as books and journals, are the subsequent publication of primary literature (Saunders, 2003). The primary data have been collected from reports, publications from various sources (EC, governments, research institutes), and finally, data obtained from interviews (face-to-face and by e-mail and telephone). For a list of the interviewed people, see Appendix 1. The secondary data have been collected from books, academic journals and internet websites.

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The Ladder of Inference (see Figure 3.112_{), developed by} Chris Argyris, was presented in Peter Senge's book ‘The Fifth Discipline: The Art and Practice of the Learning Organization’13_{. What the diagram implies is that we begin} with observable data and experience. From these observations data is selected by the researcher. To these selected data meaning is added, assumptions are developed and conclusions are drawn before beliefs are developed. Beliefs form the basis of our actions which create additional observable data and experiences. This last step is visualised by the reflexive loop in Figure 3.1.

Through his research, Argyris has discovered that every person has tendencies to climb up the ladder of inference too fast. Almost instantaneously after seeing or hearing someone else speak or act, individuals integrate the new observation/information with their existing set of assumptions, sometimes prompting action that has only minimal relationship to what was originally spoken or observed14_{. This model allows researchers to become aware of their own reasoning process and the} choices they make, between observing data and taking action. The key is maximising the relationship between the selected data and the taken actions.

Adopting theories and concepts is an essential method to assist in answering the formulated subquestions, as will be discussed in section 3.4 in which the theoretical framework is constructed. In addition, other methods are applied (such as conducting interviews and analysing policy reports). These methods are shortly addressed for each subquestion:

• The first subquestion has been formulated to provide insight in the drivers for change that lead to a

significant need for knowledge about spectrum management. The applied method to assist in answering the first subquestion is analysing policy reports, in which the technical and economic efficiency of the current spectrum management approach is questioned. In these reports it is argued that certain technological developments have several disruptive features that put pressure on the current spectrum management approach. Therefore, the definition of disruptive technologies is included in the theoretical framework.

12_{http://www.collaborativecoaching.org/notes/ladder-of-inference.htm} 13_{http://www.dramaticsolutions.com/ladder1.html}

14_{http://www.onepine.info/pargy.htm}

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• To answer the second subquestion EC policy reports are analysed in order to determine which

target groups are influenced by the initiatives taken by the EC. These reports have been analysed in order to determine the implications of the flexible spectrum management approach for the users of frequency space.

• The third subquestion has been formulated according to the Triple Helix thesis which is also used

to answer it, as has been mentioned in section 2.2. The Triple Helix thesis will be further explained in section 3.4.

• The fourth subquestion has been formulated to investigate which interventions the academic

community – in the context of this report the UG – should carry out. The applied methods to answer this subquestion are interviewing people from the university (both by e-mail as face-to-face) and analysing internal university documents. These methods are applied to identify the most suitable types of education, and to determine what issues have to be addressed in developing them. For a determination of the financial feasibility of the whole development cycle, the theory of Ulrich and Eppinger (2003) is applied, as explained in section 3.4.

3.4 Theoretical framework

In this final section of the chapter about methodology, the theories and concepts which are used as analytical tools to assist in answering the research questions are discussed. Specifically, for each subquestion the applied theories and concepts are discussed.

Subquestion 1: Drivers for change

The following theoretical classifications are applied to illustrate the necessity for changing the current spectrum management approach. These changes are necessary when technologies can be classified as disruptive technologies and/or radical innovations. Disruptive technologies make possible the emergence of new markets, whereas radical innovations are fundamentally new to the world.

Disruptive technologies

The term disruptive technology was introduced by Joseph L. Bower & Clayton M. Christensen in the 1995 article ‘Disruptive Technologies: Catching the Wave’. The authors state that:

‘Disruptive technologies introduce a very different package of attributes from the one mainstream customers historically value […]. At first, then, disruptive technologies tend to be used and valued only in new markets or new applications; in fact they make possible the emergence of new markets’ (Bower & Christensen, 1995).

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Radical innovations

Another way to classify the technological developments is whether these can be typified as radical innovations. Tidd et al (2005) highlight four categories of innovation, including the category of paradigm innovation, which they define as ‘changes in the underlying mental models which frame what the organisation does’. The authors classify innovations on the basis of degree of novelty, ‘running from minor, incremental improvements right through to radical changes which transform the way we think about and use them’ (Tidd et al, 2005). Incremental change is about ‘doing what we do better’, whereas radical changes are ‘new to the world’.

Subquestion 3: Roles of various institutions

The EU recognises that spectrum policy has a significant contribution in innovation policy and regional development. The concept of the Triple Helix is adopted, because this model provides a sound description of the roles that universities, industry parties and governments should play in innovation processes. It states that collaborative relationships between these three institutions are essential in the context of innovation policy.

Triple Helix concept

The following abstract of an article of Leydesdorff and Etzkowitz (2001) illustrates the relevance of the Triple Helix concept, which is a crucial insight from the literature in the context of both formulating and answering the third subquestion.

‘A transformation in the functions of university, industry and government, the ‘Triple Helix’, is taking place as each institution can increasingly assume the role of each other. The Triple Helix thesis states that the knowledge infrastructure can be explained in terms of these changing relationships. Arrangements and networks among the three institutional spheres provide input and sustainance to science-based innovation processes. In this new configuration, academia can play a role as a source of firm-formation, technological and regional development, in addition to its traditional role as a provider of trained persons and basic knowledge.’

The most significant collaborative relationship in the context of this research is the relationship between the RA and the UG, because these are the client organisations of this research. The theory of Emden et al. (2006) is used as a design tool for providing recommendations about the future roles that the RA and the UG might play in the development of educational programmes in spectrum management, which is currently a non-existent product. This theory is applicable because it states that new product development (NPD) can be treated as a codevelopment process. ‘Collaborative relationships are enjoined by two or more firms to create value by integrating and transforming disparate pools of know-how related to new product or service development’ (Emden et al.: 2006).

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Furthermore, concrete phases can be distinguished and in order to progress to a subsequent phase a decision has to be made to take the collaboration to the next level, as illustrated in Figure 5.1. These decisions will also be addressed.

Subquestion 4: Types of education

In addition to identifying suitable types of education, the feasibility of each type has to be assessed. To achieve this, an economic analysis is performed. The model of Ulrich & Eppinger (2003) is applied because this method of performing an economic analysis provides a distinction between quantitative and qualitative factors. The quantitative factors can be regarded as those that are applied in traditional economic analyses. Since the development of educational programmes concerns a lot of factors that are very difficult to quantify, a lot of assumptions have to be made. Therefore, the added value of this method lies in the fact that qualitative factors – such as externalities – are accounted for as well. The qualitative analysis focuses on the interactions between the project and 1) the firm as a whole; 2) the market in which the product/service will be offered; and 3) the macro environment, as illustrated in Figure 3.2. To gain insight in the dynamics of developing various types of education, both a quantitative and a qualitative analysis are performed. This analysis concerns a determination of the business plan for the whole cycle of developing educational programmes.

Figure 3.2 – The broader context of a development project (based on Ulrich & Eppinger: 2003)

Macro Environment Market

Firm Project

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Chapter 4 Drivers for change

One of the effects of the paradigm shift, as illustrated in the introductory chapter, is a recognition that the traditional spectrum management model is too rigid to cope with the changing requirements. This chapter is about identifying the developments that have caused this recognition. Therefore, the following subquestions will be answered:

• What are the main characteristics of the current situation that are drivers for change? • Which initiatives to change current spectrum management can be observed?

4.2 Drivers for change

4.2.1 Technological developments

The description of the following technologies will focus on disruptive features. Technologies with disruptive features eventually come into conflict with the traditional command-and-control approach which is based on exclusive licenses. The following list of technologies is far from exclusive; see for sound analyses of the various technological developments Webb (2007) and Sportviews15_(2007), amongst others.

Ultra Wide Band (UWB) technology

This type of technology is characterised by very low power radiation over a very large radio bandwidth. In effect, the necessity of assigning a specific channel to a user is eliminated. These technologies allow the orderly use of broad spectrum bands by competing uses and users (Bauer, 2002).

Cognitive radios

Cognitive radios can discern spectrum use at their location and modify their frequency and power to operate only in spectrum that is ‘vacant’ at any given time. Because spectrum use varies by time and location, cognitive radios can use vacant spectrum only temporarily and do so without interference to others, maximising the number of users and services accessing given frequencies. It is expected that cognitive radios will provide increasing levels of sharing between very different kinds of users and services (Technology CEO Council, 2006).

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Mesh networks

Mesh networks employ each user device or radio access point as a receiver, transmitter and forwarder of information designed to connect users, reducing the need for costly access infrastructure (Technology CEO Council, 2006).

Smart Antennas

Smart antennas improve transmission quality and reduce interference by automatically and continuously changing the direction of transmission and reception and matching signal strength to the needs of individual users (Technology CEO Council, 2006).

All these technologies have essential characteristics that put pressure on the traditional spectrum management approach. However, the UWB differs from the other technologies on one significant aspect: its maturity. In the context of this maturity, changing the current spectrum management is the most urgent. Therefore, the UWB technology can be regarded as a disruptive technology.

4.2.2 Convergence

Convergence between mobile, fixed and broadcasting services is emerging, which implies that the strict separation between these different radio services no longer holds. The European Commission (EC) already acknowledged that in 1997, illustrated by the following quotation:

‘There is widespread agreement that convergence is occurring at the technological level. That is to say that digital technology now allows both traditional and new communication services – whether voice, data, sound or pictures – to be provided over many different networks’ (EC, 1997).

Convergence between mobile and broadcasting services – for example mobile TV – makes exclusive allocation of frequency space to a radio service less appropriate. In order to fully benefit from technology innovations, this development should also be reflected in spectrum management (Sportviews, 2007).

The WAPECS16_{concept foresees a further convergence of communications technologies and networks} in the future. Since this is an initiative of the EU, more specifically: the Radio Spectrum Policy Group (RSPG), the definition of the WAPECS initiative is given in the next section.

4.3 Initiatives to change the current situation

Section 4.2 deals with the main drivers for changing the current situation. These drivers have been identified by the EC and consequently, initiatives to change the status quo have been taken. These

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initiatives taken by the EC to change the current spectrum management regime in order to address the associated problems are described in this section. This section only identifies the initiatives of the EC, since these are concerned with shaping the climate in which other initiatives can be taken. Other parties’ initiatives are described in Chapters 5 and 6.

4.3.1 Initiatives of the European Commission EC’s i2010 initiative

The EC’s i2010 initiative, ‘European Information Society 2010’, sets out the contribution of the ICT sector to the Lisbon strategy to stimulate growth, competitiveness and employment. The i2010 initiative is based upon three main pillars (EC, 2005-3):

1. A single European information space offering affordable and secure high bandwidth

communications, rich and diverse content and digital services.

2. World class performance in research and innovation in ICT by closing the gap with Europe’s

leading competitors.

3. An information society that is inclusive17_{, provides high quality of public services and promotes} quality of life.

Contribution of spectrum policy to Lisbon strategy

The EC states that spectrum policy has an important contribution in reaching the Lisbon goals, as illustrated by the following quotation:

‘This [technological] progress means that the traditional spectrum management approach should be replaced by a more flexible one, which not only facilitates technical efficiency, but also economic efficiency in spectrum use [...]. By freeing up the power of radio spectrum to stimulate investment in innovation and to increase productivity, the contribution of information and communication technologies (ICT) to the EU’s renewed Lisbon strategy for promoting growth and jobs can be made all the more effective’ (EC, 2007).

To point out that spectrum policy has a great potential to boost the economy of EU member states, several studies have been conducted. These studies have showed that market-based spectrum management combined with flexible usage rights is expected to bring a net gain of €8-9 billion per year across Europe, whereas the total turnover of the electronic communications sector would be between €240-260 billion in 2006 (EC, 2007).

17_{The EC mentions the concept of e-Inclusion, which has to do with addressing e-accessibility through a mix of}

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WAPECS initiative

The definition of WAPECS is as follows:

‘WAPECS is a framework for the provision of electronic communications services within a set of frequency bands to be identified and agreed between European Union Member States in which a range of electronic communication networks and electronic communications services may be offered on technology and service neutral basis, provided that certain technical requirements to avoid interference are met, to ensure the effective and efficient use of the spectrum, and the authorisation conditions do not distort competition’ (RSPG, 2005).

Communicating the flexible approach

To communicate its position in the global discussion on spectrum management, the EC adopts a number of methods.

Communications and Commission’s papers

The EC published the first annual spectrum policy report in 2004, in which implementation of a new spectrum management approach was the central element. In 2005, the EC published three commission papers that were published within a number of weeks. In these publications, the EC shows a preference for a market-based approach and is communicating this approach consistently (in these publications, but also on conferences and workshops). The EC argues that a market-based approach provides a stable basis for innovation which can boost Europe’s growth and competitiveness. The EC aims for the year 2010 to introduce spectrum markets. In the meantime the market-based approach to spectrum management will be introduced gradually. This gradual approach is addressed in the next commission paper that was published in February 2007. The essential difference between the papers from 2005 and the paper from 2007 is the difference between promoting the new approach in 2005 and the provision of concrete action plans for adopting this approach in 2007. These action plans are formulated on the basis of the identification of frequency bands for flexible use and include the steps that various parties have to take to pave the way for making possible the introduction of the new spectrum management approach in 2010.

The market-based approach implies empowerment of spectrum users to make timely commercial choices close to the market, which means that the roles of regulators and the users of frequency space are going to change dramatically. The regulators will give up the responsibility of allocating and managing the spectrum in favour of a monitoring/arbitrating role and the users will become responsible for managing the spectrum themselves. This will give rise to new spectrum management issues. These new issues include: