Prospectus-Final (clean) - Malta Financial Services Authority

minimum transfer bandwidth of 1 Mbit/s also count toward meeting the requirements. Irrespective ofthis, each network operator must provide 50% of the population with 800 MHz broadband services bythe start of 2016. On 21 December and 28 September 2011, the Federal Network Agency gave noticethat the requirements to deploy LTE associated with Deutsche Telekom's license had already beenfulfilled in seven of Germany's federal states. Since then, the allocated 800 MHz frequency spectrumhas also been available for use outside of rural regions in these seven federal states. There were norestrictions on Deutsche Telekom's license for three additional federal states.There are also roll-out requirements for the new frequencies in the 1.8 GHz and 2.6 GHz spectrumranges: 25% population coverage by the beginning of 2014 and 50% by the beginning of 2016. AsGSM and UMTS also count toward these coverage targets, Telekom Deutschland GmbH has alreadymet these requirements.United StatesDeutsche Telekom's U.S. mobile operations, conducted through T-Mobile USA, are regulated by theFCC and by various other federal, state and local governmental bodies. Only the FCC has authority toregulate "rates and entry" by Commercial Mobile Radio Service ("CMRS") operators, while both theindividual states of the United States and the FCC have authority to regulate "other terms andconditions" of CMRS. The FCC has refrained from regulating rates charged by CMRS operators.However, under its authority to license CMRS operators to serve the public, the FCC has imposed anumber of requirements on operators, including, for example, rules for providing emergency 911services, number portability, support for lawful electronic surveillance, and intercarrier compensation(payment of access charges for carrying and terminating traffic). In addition, the FCC issues andregulates CMRS spectrum licenses. Spectrum related to the Advanced Wireless Services (AWS-1)licenses granted in 2006 was occupied by incumbent commercial providers on the 2.1GHz band andFederal government agencies on the 1.7 GHz band. The 2.1 GHz incumbents relocation rules aregoverned by FCC regulation, whereas the 1.7 GHz incumbents relocation process is governed by theCommercial Spectrum Enhancement Act. Access to the spectrum is tied to moving these entities awayfrom using these spectrum bands, and has largely been accomplished at this point.Other current U.S. regulatory issues that may significantly impact T-Mobile USA's business include:• Open Access/Network Neutrality: The FCC has initiated several proceedings that propose theadoption of regulations to require wireless providers (and other telecommunications carriers) to"open" their networks to applications, devices, and services provided by third parties. These variousproceedings involve a variety of issues, including text messaging practices, network provisioning,handset locking, exclusive arrangements with handset manufacturers, and the extent to whichcarriers may deny access to devices and applications based on their need to manage theirnetworks. In December 2010, the FCC adopted a Report and Order imposing net neutralityobligations on broadband service providers, including mobile carriers. Of significance to T-MobileUSA, the Report and Order establishes two new rules for mobile broadband providers.• Transparency: Mobile broadband Internet providers must publicly disclose accurate informationabout their services, including network management practices and network, performance, andcommercial terms to consumers; Internet content and service providers; applications developers;and device manufacturers.• No Blocking: Mobile broadband providers must not block access to lawful websites orapplications that compete with voice or video services offered by the provider. The ban onblocking is subject to exceptions for actions that constitute "reasonable network management",including efforts to address network congestion and ensure network security.• While not prohibiting "pay-for-priority" agreements outright, the order finds such arrangementsunlikely to satisfy the unreasonable discrimination ban. Broadband Internet access providers maycontinue to offer "tiered" pricing based on amount of data usage and/or speed, but the FCC willmonitor these practices. Similarly, the FCC has also indicated it will monitor the consumer impact of"specialised services" offered by broadband providers over their last-mile networks (such asfacilities-based VoIP or IPTV) even though such services are not currently subject to the networkneutrality rules. The FCC notes that it includes in its definition of broadband Internet access serviceany service that is "used to evade the protections" of the net neutrality rules in an effort to preventISPs from using limited or specialised services to avoid the new rules. Thus, if the FCC determinesthat a mobile provider is offering a broadband Internet service to evade the protections of the rules60