Friday, March 04, 2005

Frequency weirdness threatens mobile operators

The Latvian Ministry of Transport has produced an apparently innocent looking document listing about 20 pieces of radio spectrum that it believes should be considered restricted access. Taken together with article 47 of the Electronic Communication Law, the document, if adopted as policy by the Cabinet of Ministers, would allow all restricted-use spectrum to be auctioned off once present user licences expire.
This could mean that all three Latvian operators – Tele2 and Latvian Mobile Telephone (LMT) on the GSM spectrum, and cdma450 operator Triatel – could have their spectrum useage rights subject to auction in the next couple of years. Triatel, which is just starting to build out its 3G network, could have its frequencies auctioned off as early as next year.
Triatel wrote a letter to the Public Utilities Regulatory Commission warning that the draft document (approved by a meeting of ministerial State Secretaries on February 10) effectively permitted "business theft" should a competitor or speculator win in the bidding and then demand (having paid a significant sum) that the spectrum rights be exclusive. The regulator filed a critical comment urging the document be redrafted allowing for a mechanism for incumbent frequency holders to extend their rights.
The authors of the draft document in the Communications Department of the Ministry of Transport say they had no choice but to word it in a manner that left it open to such interpretation. Indeed, one source close to the drafting process tipped off this blogger in a call describing what had been written as "madness".
Once the possibility that Latvia's GSM network could be disrupted (you can't operate without frequencies) made front-page news, the Ministry of Transport briefed this blogger (in his day job as a reporter) making it clear, yet again, that their intent was not to indirectly put the interests of 1.4 million mobile phone users on the auction block. Indeed, they, too, wanted to achieve an end-result where incumbents could extend their frequency useage rights, where unused frequencies would be auctioned to the highest bidder and where all players would start paying some kind of frequency use fees in accordance with Latvia's long term telecommunications policy principles.
At this point, it is unclear whether this can be done without amending the Electronic Communications Law. At the briefing, the Ministry and Communications Department officials stressed that there was no other way they could have drafted the frequency use document given the way the law is formulated. At the same time they were reluctant to amend the law yet again.
Some interesting observations after all this:
- there are still embarrassing loopholes in the way wireless telecommunications markets are managed in Latvia (the LVL 100 paid, wholly legally by the Triatel brand partners, for cdma 450 spectrum is one example).
-the low intensity conflict between the Ministry of Transport and the Regulator continues, with the latter being blamed for not timely objecting to the draft spectrum use memo (even though the Ministry claims there was no other way they could draft it). Another simmering issue is number resources, with the Regulator urging a rapid swith to eight digit numbers before a severe shortage (due to exploding mobile use and the third/fourth operator) hits. The Communications Department says these alarmist statements are exaggerated.
-an undercurrent of feeling in the Ministry that some mobile operators, such as Triatel, (who are these people, really? – asked one official), should be given a shaking because they, somehow, are dubious. As for the big incumbents, they are making too much money (there is some merit to this, LMT's profitability runs at around 30 % and it has the rec0rd for earnings of any Latvian company).

I have been a little remiss in blogging because I have been recovering from a system crash on my Powerbook G4 which required a so-called clean install of MacOS X. All files burned to CD or an external drive, then recovered. I've also been feeling some kind of late winter lethargy, believe it ir not. The Swedes call it "spring fatigue" but at -19 C during the night in Riga, it's still the middle of the fucking winter as far as I am concerned.

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