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Going, Going, Gone…spectrum auction draft decision

PRACTICE AREA GROUP: Telecommunications
DATE: 02.09.2011

The Commission for Communications Regulation (“ComReg”) recently published its response to consultation and its draft decision in relation to the proposed auction of rights of use in the 800 MHz, 900 MHz and 1800 MHz radio spectrum bands for the period 2013 to 2030.

ComReg has stated that the auction should encourage investment from operators and result in “a new era of advanced wireless services including fast, high capacity mobile broadband”, with the 800 MHz and 900 MHz spectrum bands in particular being highly suitable for advanced mobile services.

The Bands

The three bands of spectrum available for auction are used for various purposes. The 800 MHz band is currently used for analogue terrestrial television services. However, once the switch-off of analogue is complete in 2012, this band will be available for re-allocation to mobile services. The 900 MHz band is currently used for the provision of GSM or ‘2G’ mobile services (such as mobile calls and texts). The 1800 MHz band is also used for GSM services. In accordance with EU regulation, both these bands will be liberalised, meaning that they can be used in future for advanced mobile services utilising ‘3G’ and ‘4G’ technologies.

The Auction

ComReg proposes to hold an open auction for the entire spectrum in the three bands. The auction will comprise of 28 blocks of 2 x 5 MHz spectrum in total and will consist of two phases – the first phase to determine the amount of spectrum a bidder has won rights to and the second phase to determine the location of the spectrum (within the relevant spectrum band). The spectrum will be awarded to the highest bidders subject to a cap on the amount any bidder can be awarded of up to 10 blocks of 2 x 5 MHz spectrum (with a maximum of four blocks of 2 x 5 MHz below 1 GHz). The draft decision states that, in order to safeguard competition and spectrum efficiency, minimum fees will apply, set at €20 million per 5 MHz band of paired sub-1 GHz spectrum and €10 million per 5 MHz band of paired 1800 MHz spectrum).

The Licences

The spectrum licences made available through the auction will be subject to new EU rules determining the conditions that can be stipulated in such licences. For example, it will be a condition of the licence that there is a minimum quality of service provided by the licence holder, including network availability for all but 35 minutes per six month period. In addition, all licence holders must attain by specified dates a minimum of 70% population coverage (with new entrants being granted extra time to achieve this requirement).

Trading Spectrum

ComReg notes in its draft decision that, by virtue of the latest set of regulations on electronic communications published by the European Commission, trading of spectrum will be permitted in designated bands. ComReg anticipates that this will apply in due course to the three bands covered by the auction and it will publish its guidelines on trading of spectrum in due course.

Next Steps

Interested parties have until 5pm on 30 September 2011 to submit comments on the draft decision to ComReg on any issues raised by the proposed auction. Once ComReg has concluded its review of all the submissions received, it will publish its final decision. ComReg will also publish in the coming weeks a further consultation document setting out detailed rules for the auction. The draft decision states that ComReg expects the auction to occur within the next 4-6 months. A copy of the draft decision is available here: http://www.comreg.ie/_fileupload/publications/ComReg1160.pdf

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