Whoever wins the auction which Ofcom announced this week, there are several people likely to benefit.
The DECT guard bands, 1781.7-1785 MHz and 1876.7-1880 MHz, originally set up to protect cordless phones from interference by mobiles, will be made available, when between seven and twelve licences are auctioned next month.
What will people do with the spectrum?
Although the licences will be technology neutral, the only significant activity in this spectrum will be GSM, since the millions of existing GSM handsets can access services.
This means one beneficiary is easy to spot: Cambridge-based GSM base-station maker, IP Access. Mostly sold in the US, IP Access's pico-cell systems operate within the 200mW ceiling specified by the Ofcom licences, and are likely to be used by several of the players that buy the new licences
"Other companies are looking at that area, but none have a product as well developed as IP Access," says Martin Wren-Hilton, chief executive of Coffee Telecom, the most public proponent of public services in the new bands. "They are ahead of any other pico-cell vendor."
"Our pico-cells can cover three floors, with capacity reasonably well matched for an office of 50 to 100 users," said Christopher Cox, marketing manager of IP Access. Compared with converged Wi-Fi cell services, GSM pico-cells "would offer the best of both worlds," he said "The GSM air interface is very solid, and we can use broadband IP for the backhaul. It could even handle Blackberry traffic over GPRS."
When and where will services appear?
Coffee plans to be first with services, in the second quarter, for both business users and hotspots."We've had more or less equal interest in both services," said Wren-Hilton. "It's wonderful we've got a date after nearly three years."
Coffee hopes to put hotspots in a few high-profile places quickly, and build out from there. Along with other providers, most likely including BT and NTL, Coffee will also sell hotspots to commercial users, offering users a hotspot in their office, which will route calls from ordinarly mobiles onto cheap backhaul over broadband.
For the medium term, this will be a UK-only service, but if it is a success and other regulators follow suit, it could be copied in other countries in Europe, where similar guard bands were set aside in the early days of GSM.
"The concept of private GSM raises eyebrows in various parts of Europe," said Roger Wilkie, technical director of FMS Solutions, another provider planning to offer business hotspots. "Other administrations are not as advanced as Ofcom, but they will be watching."
How will it be policed?
Ofcom intends to be very hands-off. It won't specify the technology to be used (though everyone will use GSM because of the number of handsets available. "What will drive users towards it is the broad availability of handsets," said Wren-Hilton.
Even more impressive is the hands-off way the licences will be administered.
Between seven and twelve licences will be issued, and licence holders will be able to operate in the full range of the bands, anywhere in the UK. Ofcom wants to hand over responsibility for dispute settling to the licence holders themselves - and has even given them free reign to create their own agreement under which any disputes will be handled.
The only caveat is that, if a workable code of practice isn't developed in time, Ofcom reserves the right to impose its own procedures, which would almost certainly be more onerous. "We're nearly there," says Sandra Gilligan of Mobile 200, the industry body set up to work out the legal and technical niceties of a code of practice.
Mobile 200's system will most likely let licence holders register the location of their hotspots on a web site, and arrange a fair choice of channels amongst neighbours. Technology in the base stations will be used to resolve disputes automatically as much as possible, by selecting channels and power levels.
"I liken it to Wi-Fi," says Gilligan. "If you have problems you go and talk. You can decide who is interfering, and agree to change channels or lower the power. Most of the time that's how it works in Wi-Fi."
The potential for interference should be lower in the guard bands, since the range is similar to Wi-Fi, and there are more channels - fifteen compared with the three Wi-Fi channels in the 2.4GHz band. Also there will only be between seven and twelve licences.
However, the system will have greater demands on it, warns Gilligan: "Wi-Fi can cope with more interference, but this is going to be doing both data and voice - and the expectations are already set by what the consumer gets from GSM."
Bullish on the prospects
Ofcom is cheerful about it all: "Our job is to make sure spectrum is used efficiently," said spokesman Simon Bates. "We want to see innovative services, and we think the best way to do this is to take a hands-off approach"
"We're pleased in the level of interest we've had in these licences," said Bates, "and if UK PLC benefits then so much the better."