FINAL REPORT - Stakeholders - Ofcom

Among the specific, identifiable costs which can be directly associated with spectrum
management are:
• Participation in international fora,
• Licensing of radiocommunication services.
• Co-ordination.
• Enforcement of licence conditions.
• Policing the spectrum.
7.2.8.4 Indirect costs
In addition to the direct costs relating to the process of licensing and maintenance of a
specific radiocommunication licensee, there are a number of functions that NRAs
undertake that can be considered as ‘indirect costs’ to the process of spectrum
management. Typical indirect costs could include:
• Research and development of new technologies to the benefit of spectrum users,
• Market surveillance,
• Marketing and public relations,
• National database management,
• Participation in a variety of international regulatory and standardisation fora not
wholly related to spectrum management,
• Monitoring and enforcement procedures and
• Administrative functions including IT, Finance and Human Resources.
It is reasonable for some or all of the above costs to be recovered by the licensing process,
since without undertaking such functions the overall quality of the spectrum management
activity may decline. Some administrations therefore include indirect as well as direct costs
in the setting of annual administrative fees.
7.2.9 Approaches to setting Spectrum Fees
Cost-based spectrum fees are similar to administrative fees in that they are intended to
recover the costs incurred by NRAs in the licensing and/or frequency management
processes. However, unlike administrative fees, spectrum fees for individual licences take
account of the type and/or amount of spectrum resource assigned to that licence.
Typically they are set on a per-bandwidth basis, and may also take into account the
frequency band. The costs that are to be recovered generally include both direct and
indirect costs, though in most cases there is little or no information on how such charges
are apportioned. Since there is not in practice a direct correlation between the amount and
type of spectrum licensed and the costs incurred, cost-based spectrum charges may not
reflect the costs associated with individual licences or authorisations, or even broad
categories of licence or authorisation.
7.2.10 Approaches to setting Spectrum Charges
7.2.10.1 Introduction
Like spectrum fees, spectrum charges are generally based on the amount or type of
spectrum that is licensed. However, unlike spectrum fees, charges may be set at a level
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