Globally, regulators are grappling with the idea of using new licensing models for mmWave spectrum such as the 26GHz band. Since the European Commission (EC) assigned the band as the third "pioneer band" for 5G in 2019, momentum has been picking up in the EU with several countries planning or already assigning the spectrum to operators. The Italian regulator took an innovative approach to licensing when it auctioned the 26GHz band in 2018. It allocated 200MHz to each operator but adopted a club licensing model that encourages dynamic use of the spectrum.
Spectrum in the 26GHz band will allow operators to deliver services at faster speeds and lower latency; it also allows for a range of new licensing models to be adopted. For example, in Denmark, the regulator has looked at introducing a network-sharing regime for 5G pioneer bands. In May 2019, the EC adopted an implementing decision to harmonize the 26GHz band. This is now the third pioneer band for 5G in the EU's Action Plan, after 3.6GHz and 700MHz.The 26GHz band is widely considered by regulators to be the most challenging band in terms of authorization. Regulators around the world are not only looking at how to allocate spectrum but also exploring a variety of access models, such as exclusive licensing and unlicensed spectrum access, and some form of shared access, such as licensed shared access or club licensing. In France, the regulator has been offering temporary three-year licenses in the 26GHz band as long as third parties are allowed infrastructure access.
Italy was one of the first countries in the EU to auction the 26GHz band (October 2018). TIM, Iliad, Fastweb, Wind Tre, and Vodafone all succeeded in the auction, which generated a total of €164m ($182.5m). The regulator is using a club licensing model, which is a form of concurrent shared access that enables licensees to share any unused spectrum from other licensees. This model ensures that each licensee can dynamically use all the awarded spectrum (up to 1GHz) in areas where frequencies are not used by other licensees. Licensees can stipulate commercial nondiscriminatory agreements, proportionally sharing the costs of the infrastructure. However, each license holder has the preemptive right of its assigned lot of 200MHz. Licensees can assign a third party the task of managing the use of the spectrum to prevent any harmful interference. Under the Italian regime other players are also allowed to have access to develop 5G services. If the requester asks for access in areas already covered, then the access is provided by the existing operator, whereas in areas not yet covered, licensees handle the request collectively or through the trusted third party.
This club licensing approach ensures that spectrum resources are not underutilized, but also that there is no duplication of investment, which in turn improves efficiency. It is too early to tell though whether this option will really work better in practice than other approaches. However, for the club licensing model to be at all successful it is important that the Italian regulator continues to monitor any sharing arrangements to ensure competitive markets are not compromised.