With a closing date of 13 November, OFCOM is consulting again on charging for the use of spectrum. That is radio, radar and navigation aids to you and me. You may recall that OFCOM consulted last year on applying Administered Incentive Pricing (AIP) to the aeronautical spectrum to improve its efficiency but we argued that international regulation prevented spectrum trading or the use of frequencies for other purposes so putting a price on a frequency could not improve efficiency. Now OFCOM is only allowed to charge AIP to improve efficiency and not just to raise tax (but AIP looks like a tax and smells like a tax so you need to decide if it is a tax!) so they withdrew but said they would return and now they have.
This second round of consultation focuses on maritime VHF and DGPS channels but it includes a section on the principles it wants to apply to aeronautical VHF frequencies. We know that OFCOM has another consultation to go out in just a few weeks with its full proposals on VHF Com AIP but we would like you to respond to this consultation now so we don’t allow the principles to go unchallenged.
In their consultation they discuss the principles of charging for aeronautical frequencies (para 1.6 and 1.8) but then go on at para 1.9 to set out a policy that purports to allow AIP to be charged even though the frequencies cannot be used for any other purpose. That is the key we must challenge now lest it be used against us later.
Please consider the following:
Does society obtain more value from spectrum by pricing it beyond the reach of some aeronautical users? Public airports and ATS providers must have frequencies for safe operation as judged by the CAA. Minor airfields may not be able to justify the cost of a VHF com frequency and will go without, so increasing risk. However a frequency so given up cannot be passed on to a user who is willing to pay more and must be returned to the European pool for reallocation. Thus although the income (tax) derived from spectrum may be increased, the value derived by society from the frequency does not increase as the frequency is lost to UK society.
Major airfields must already have sufficient frequencies or their licence to operate would have been withdrawn by the CAA and the cost of using an additional frequency (paying controllers and running control positions) would far exceed the likely AIP charge so it is improbable that airports or ATS providers would have surplus frequency holdings.
If this AIP policy were applied and an aeronautical user decided to pay more for a frequency than the existing user could afford (and assuming for a moment that the frequency could be reallocated by the UK), the existing user would have to manage without VHF com or go out of business. If they remained in business their risk is likely to increase and if the CAA judged it unacceptable they would have to intervene to force the frequency to be retained or revoke the airfield licence. But the airfield could continue to operate unlicensed with the risk already identified as unacceptable by the CAA. Intervention would destroy the AIP market.
Thus society would lose aviation infrastructure and suffer increased risk to life and property with no increase in value from spectrum, contrary to the aims of AIP.
The deadline is 13 November so please do not delay; your individual input is very important so if you are able to put together a short response in your own words reflecting your own position please send it in using the How to Respond link on the OFCOM website but we do not recommend you use the on-line response form as the questions on it all relate to maritime issues.
You can see the LAA draft response here.
Thanks for your help and time.