FINAL REPORT - Stakeholders - Ofcom

FIN Yes Yes No
S Yes No No
UK No 36 No Yes (auction or
administrative
pricing )
Table 7-5 – General situation concerning the application of fees and charges in EU Member
States
Note that all Member States apply administrative fees of some description, in some cases
for spectrum licences and in some cases for network / service licences. The latter only
apply to public telecommunications networks.
In those countries that do not apply administrative fees for spectrum licensing, relevant
costs are recovered either by means of cost-based spectrum fees or are recovered from
the proceeds of administrative pricing or auctions. For cost-based spectrum fees, all the
NRA’s relevant costs are recovered from all the licensees, but the amount recovered from
individual licensees is a function of the amount and type of spectrum resource that is
licensed.
7.2.7 Purpose of Administrative Fees and Spectrum Charges
There are two principal reasons why it is necessary to levy fees and charges for
radiocommunications services. Firstly, administrative fees are required to cover the costs
associated with issuing licences, monitoring market behaviour and enforcing licence
conditions.
Secondly, spectrum charges should reflect the need to provide an incentive for those using
spectrum to do so in the most efficient manner and to ensure optimum use of scarce
spectrum resources. Charges may also be applied to encourage users who have a viable
alternative (e.g. the use of fibre optic cable instead of fixed radio links) to vacate spectrum,
making way for new market entrants or new service offerings which value spectrum more,
thus optimising the economic benefits of the use of the spectrum. In a competitive bidding
scenario, spectrum charges can also provide an objective and transparent means of
awarding licences where the number is limited due to the scarcity of spectrum.
The radio spectrum is a finite resource, representing a relatively small amount of the
broader electromagnetic spectrum that includes infra-red and optical frequencies with
many orders of magnitude more bandwidth. The value of spectrum over other electronic
communication media is not so much its capacity for information transmission, but its
ability to convey such information to remote users under a wide variety of scenarios,
including a full mobile capability. This value is particularly apparent in mobile and
broadcast applications, where radio spectrum provides the only means for wide area
wireless delivery of services over non-line of sight paths.
The attractiveness of certain parts of the spectrum is further enhanced by the physical
properties of the spectrum (notably the available bandwidth, geographic range and re-use
capability) and the service to which the spectrum has been allocated by the ITU and
regional bodies such as the CEPT. In practice, terrestrial broadcasting and wide area
mobile communications are constrained to frequencies below 3 GHz (to provide wide area
non-line of sight coverage), whereas line of sight applications such as terrestrial fixed links
36 [In the UK cost based administrative fees apply for aeronautical and maritime services.
Spectrum charges or administrative pricing have not so far been implemented for
aeronautical and maritime services.]
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