broadband strategies handbook.pdf - Khazar University

Spectrum trading (also known as “secondary markets”) is anothermethod that facilitates aggregation of spectrum to meet future data trafficdemand requirements by permitting existing licensees to transfer all or apart of their spectrum assignments to third parties with little or no governmentinvolvement in the process. Implemented in Australia, New Zealand,and the United States, spectrum trading has allowed late entrants to themobile market to obtain spectrum rights, which can reduce constraints onnew entrants with regard to the timing of their market entry. In the absenceof spectrum trading, potential entrants and existing operators seeking tobuild out their networks further must wait for the government to awardnew spectrum assignments. Ultimately, spectrum trading provides theopportunity for secondary markets to emerge that can improve the rolloutof new services, increase the potential for competitive service provision,and encourage investments in the sector (for an in-depth study of spectrummanagement and reform in developing countries, see Wellenius andNeto 2008).Although placing greater emphasis on market forces and spectrum tradingoffers many advantages over the traditional models of spectrum management,ineffective regulatory environments may allow incumbent ordominant operators to control key, high-value spectrum bands. This couldresult in spectrum hoarding and concentration of the wireless broadbandmarket. As such, there is a trade-off between operators having sufficientspectrum and monopolizing the available spectrum. Many countries seek tomitigate this through build-out obligations, while others impose spectrumcaps or set aside spectrum blocks for new entrants. However, at least onestudy argues that spectrum caps in Latin America may hinder the developmentof mobile broadband. 6 Overall, making as much spectrum available aspossible through transparent and nondiscriminatory procedures is a keystep toward ensuring that operators are able to meet future wireless broadbanddemands.Spectrum License RenewalAs spectrum licenses granted in the 1990s and early 2000s reach the end oftheir initial terms, license renewal policies will become an increasingly relevantregulatory issue to fostering investment in wireless broadband. Inestablishing renewal policies, policy makers and regulators should strive topromote investors’ confidence and provide incentives for long-term investmentwhile preserving the flexibility of the regulatory process to accommodatemarket and policy developments (Guermazi and Neto 2005, 2). Legalcertainty is of utmost importance to create an environment conducive to100 Broadband Strategies Handbook