Wednesday, August 17, 2005

Mobile operators spared spectrum auction

The Latvian Public Utilities Regulatory Commission has adopted rules for extending frequency use rights that finally put to rest worries that at least two mobile operators – Triatel and Tele2 – could have their expired spectrum use rights auctioned to the highest bidder.
The rules essentially say "good behavior gets an extension", which is more or less what the operators wanted and which also makes sense. Earlier this spring, the Ministry of Transport confirmed that under the Electronic Communications Law and existing or proposed rules, there was nothing to prevent an auction of expired spectrum rights held by an existing operators with (in the case of Tele2) hundreds of thousands of customers. This caused an uproar at the time.
The new rules adopted by the regulator ar a bit broader than their draft version, which said that an extension would be granted if there had been no violations of the spectrum use regulations and that the spectrum was, indeed, being used for commercial activity and not "squatted". Under the rules as adopted, operators must show that they have not had any violations of rules and laws pertaining to commercial activity in the electronic communications field.
To my mind, this would raise some modest concerns about what happens if an operator is in some kind of serious dispute with the state authorities at the time of renewal (not the case with either Triatel or Tele2 at the moment). Will a tax case or a competition complaint (see Tele2 vs. Lattelekom on the issue of riding cattle, mentioned on this blog earlier :) :) :) ) raise spectrum renewal issues? This is not clear. Should some kind of gross misbehavior – billing fraud, willful disobedience of reasonable orders by the regulator, etc.– be grounds for not extending spectrum use and, essentially, taking down an operator in one fell swoop? Maybe... Ten years from now, when spectrum rights extended in the next few months are up for renewal again, there might be enough trust in the system to assume that this weapon will be used in a fair and reasonable manner.
Excuse the writing with no boldface, etc., as my favorite laptop is at home and I am using my piece-a-shit late 90s workplace iMac.

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