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Study: C-band transfer benefits ‘grossly exaggerated’

As national administrations from across the world prepare to make critical decisions this month regarding global communications spectrum allocations, a report shows that studies suggesting enormous benefits of satellite spectrum for terrestrial wireless contain major flaws in logic, calculation and methodology.

The findings of a study done by economic consultants VVA show that in highlighting the benefits of the so-called ‘C-band’ for mobile terrestrial, cost-benefit studies done for the mobile terrestrial sector completely ignore major negative impacts on satellite communications’ user groups throughout the world. The findings come just before the question of the C-band will be considered during the International Telecommunication Union (ITU) World Radiocommunication Conference (WRC), being held in Geneva through November 2015.

Terrestrial mobile stakeholders commissioned studies from Frontier Economics and Plum to highlight the positive economic impact of the C-band for their sector. A closer look at their methodology by VVA shows that these studies ignore the cost of disruption or loss of services for sectors that rely on them today, noting that for some applications, mobile terrestrial cannot provide any replacement. Furthermore, they use incomparable benchmarks; follow an incorrect approach to calculations; overlook alternative bands and technologies; rely on unproven technical concepts and use a multiplier effect of their errors in order to exaggerate the economic benefits.

According to Monica Pesce, Managing Director of VVA, any economic analysis must take full and proper consideration of the costs of and benefits for existing players and users and new players and users. “The studies we have looked at are selective in their approach, drawing on the most favourable elements necessary to conclude a significant, positive economic benefit for the terrestrial mobile sector, even if in reality, they may be far lower when properly balanced against satellite user interests,” she advised.

In a joint statement, Aarti Holla and David Hartshorn, Secretary Generals of ESOA and GVF, non-profit associations representing the international satellite communications sector noted that: “Millions of people throughout the world depend on satellite services delivered via the C-band, and it is imperative that the decisions to be made at WRC are based on the most accurate information currently available. The C-band is used to support a wide range of services, including emergency communications, peacekeeping, distance learning, live broadcasting, tele-medicine, e-government and other vital applications. Taking away and re-allocating the spectrum required to support those services based on inaccurate terrestrial wireless analyses would have a severe impact on consumers, enterprises and governments throughout the world.”

VVA Study Findings

Research conducted by VVA which discovered that claims made recently by Plum and Frontier Economics are based on key methodological flaws, including:

  • The impact on existing C-band users and the stakeholders they serve is ignored;
  • Economic benefits are overestimated by using auctions on 2.6 GHz – a band with different characteristics – as a benchmark for spectrum value rather 3.5 GHz auction values;
  • Country specific factors, obtained by using an inaccurate calculation approach, further inflate spectrum value for many countries used as case studies. Wrong quantifications are then extrapolated for considered regions. These two errors generate a multiplier effect that leads to further overestimating calculated benefits;
  • Efficiency gains deriving from the usage of alternative methods to provide capacity are expressed qualitatively but are not quantified. Alternative options to C-band for spectrum usage are ignored.

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