The European Commission is freeing up radio spectrum, resulting in a €9 billion boom for electronic services.

The Commission plans to create a pan-European market for trading in spectrum licences by 2010, and will free up more of existing bandwidth plus ensure more companies can use it. The decision follows a one by the UK regulator, Ofcom to introducespectrum trading in the UK.

According to the EC's director for electronic communications, Bernd Langeheine, the use of radio spectra accounts for one percent to two percent of the EU's gross domestic product. Freeing up spectrum could therefore generate additional revenue of up to €9 billion a year.

Under the proposals, the EC would also create a single market for wireless equipment through greater harmonisation of standards by following the Wi-Fi model for upcoming technologies including ultrawideband, broadband wireless and RFID (radio frequency identification tags).

The main focus however is to end the existing fragmented system for allocating spectrum among 25 member states by creating a market for trading licences. Ten EU member states have already started setting up some form of a trading system. But Langeheine acknowledged that there are obstacles such as the delay before current licences expire and existing licence holders' wish for compensation.

Along with trading should come greater flexibility in the services allowed to use particular parts of the spectrum, Langeheine added, such as the wider use of licence-exempt spectrum for short-range devices.

EU industry and telecommunications ministers will discuss the issue in December.

In a related event, EU telecom experts will meet on Wednesday to discuss opening sections of radio spectrum reserved for 3G (third-generation) service providers to other systems, such as WiMax (see What shall we do with 2.5GHa?). No decision is expected next week, but the Commission, which favours opening the segment, will present the results of a public survey on the issue.

Much further in the future, moves towards software-defined radios could do away with the requirements for spectrum licences altogether.