Regulatory Aspects of Frequency Rationalization Workshop on Plan To Re-Arrange Radio Frequency Spectrum for 3rd Generation Mobile Communication System (IMT-2000) Jakarta, 21 July 2005 Presented by
Duane J. Gingerich, J.D.
Regulatory Aspects of Frequency Rationalization
Introduction
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Outline 1.
2. 3.
Assessing the Government’s legal/ regulatory basis for frequency rationalization Understanding the rights and obligations of private sector telecoms license holders Developing an appropriate strategy for frequency rationalization
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1. Assessing the Government’s
legal/ regulatory basis for frequency rationalization
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Regulatory Aspects of Frequency Rationalization
International Regulation of Frequency Allocation GATS, as ratified in Law No.7/1994 – (The
provision of national telecommunications is an inseparable part of the global trade system). International Telecommunication Union (ITU)states the general legal principle on international management of radio frequencies and emphasizes the obligation to use the spectrum/orbit resource “efficiently” and “economically”. 4897D05 00
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Art.44 of the 1994 ITU Constitution, as amended: “(1) Members shall endeavour to limit the number of frequencies and the spectrum used to the minimum essential to provide in a satisfactory manner the necessary services. To that end, they shall endeavour to apply the latest technical advances as soon as possible;
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Regulatory Aspects of Frequency Rationalization
Cont’d..
(2) In using frequency bands for radio services, Member States shall bear in mind that radio frequencies and any associated orbits, including the geostationary-satellite orbit, are limited natural resources and that they must be used rationally, efficiently and economically, in conformity with the provisions of the Radio Regulations, so that countries or groups of countries may have equitable access to those orbits and frequencies, taking into account the special needs of the developing countries and the geographical situation of particular countries.” 4897D05 00
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National Regulation of Telecommunications Radio Frequency Usage
1945 Constitution – Art. 33(2) “Branches of production which are important for the State and which affect the lives of most people shall be controlled by the State”.
Law No.36/1999 on Telecommunications – Art.4(1) “Telecommunications are controlled by the State and the overall management of [that sector] is performed by the Government”. 4897D05 00
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Regulatory Aspects of Frequency Rationalization
Cont’d..
Art.4(3) – “In terms of policy making, regulation, supervision and control, as meant in paragraph (2), this is done in a comprehensive and integrated way by paying attention to the thinking and perspectives that are developing in society as well as global developments”. Art.6 “The Minister [of Communications and Information] acts as the responsible party for the administration of Indonesian telecommunications” 4897D05 00
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Cont’d..
Art.33 “(1) The usage of radio frequency spectrum and satellite orbits requires a license from the Government. (2) The usage of radio frequency spectrum and satellite orbits must be in accordance with their function and not create interference.”
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Cont’d..
“(3) The Government shall engage in supervision and control over the usage of radio spectrum frequency and satellite orbits. (4) Provisions on usage of radio frequency spectrum and satellite orbits employed in providing telecommunications shall be set out in Government Regulations.”
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The Authority of the Minister PP No.53/2000: Art.2 – The Minister is authorized to exercise
“guidance” (pembinaan) over the use of radio frequency spectrum matters. Art.3 – This guidance includes “supervision” and “control”. Art.30 – This supervision and control can be done through “observation, monitoring and control (penertiban). Arts.27/28 – specifically set out the framework for “re-allocation” of radio frequency. 4897D05 00
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Regulatory Aspects of Frequency Rationalization
Cont’d..
The Elucidation reinforces the basis of the Minister’s authority to exercise his management function over the use of radio frequency spectrum because it is a “limited natural resource”. Further, his role in “pendayagunaan spektrum frekuensi radio” (Art.3(2)c.) is specifically clarified to include “the re-determination of radio frequency allocation in accordance with technological developments (reallocation).”
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2. Understanding the rights and
obligations of private sector telecoms license holders
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Licensing in Telecommunications Sector Applicant
Apply for Approval -in-Principle to Minister of Communications and Information
Approval in Principle issued
Y
Preparation of infrastructure during a specified period in accordance with the kind of telecommunications provided (type approval, frequency license, etc.)
N Rejection of application
Applicant pays BHP telecoms service fee (1% of annual Operational Revenue)
Operating license issued
Y
Testing of telecommunication system
Applicant applies for operating license
N System repairing Source: DGPT Website (in translation) 4897D05 00
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Features of Modern Telecommunications Licenses
Conditions, e.g.: z Compliance with telecoms laws and regulations z Although for unlimited period, comprehensive evaluation every five years z Frequency spectrum usage subject to review (often by date certain), to evaluate whether roll out targets/operational performance met 4897D05 00
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Cont’d..
Rights Granted z Right to operate and provide specific types of telecommunications (network, services, special) z Charge tariffs based on formula determined by Minister z Use technology preferred as long as it meets applicable technical standards
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Rights Granted (Cont’d..) z
z
Usage of radio frequency spectrum in accordance with intended usage/ spectrum allocation plan and availability Compensation by new user in context of re-allocation of frequency to extent operations interfered with / extra costs incurred
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Cont’d..
Obligations z Detailed roll-out and operational performance criteria z Customer service z USO z Technical requirements z Payment of BHP z Provide interconnection
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Re-allocation of Radio Frequency PP No.53/2000 Art.27: (1) Reallocation of radio frequency may be made because of a change in the international radio frequency allocation and/or readjustment of its utilization. “Realokasi frekuensi radio dilakukan karena adanya perubahan alokasi frekuensi radio internasional dan/atau penyesuaian peruntukannya”.
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Cont’d..
(2) The Minister shall determine the new allocation of radio frequency in substitution for the radio frequency allocation as meant in paragraph (1). “Menteri menetapkan alokasi frekuensi radio baru sebagai pengganti alokasi frekuensi radio sebagaimana dimaksud dalam ayat (1)”.
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Cont’d..
(3) In implementing a reallocation as meant in paragraph (1), the Minister shall announce the plan for the radio frequency allocation to the holders of radio station licenses at least two years prior to the new radio frequency allocation being implemented. “Dalam pelaksanaan realokasi sebagaimana dimaksud dalam ayat (1), Menteri memberitahukan rencana realokasi frekuensi radio kepada pemegang ijin stasiun radio sekurang-kurangnya 2 (dua) tahun sebelum penetapan alokasi frekuensi radio baru”. 4897D05 00
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Cont’d..
And who is responsible to pay whom? PP No. 53/2000 Art. 28: In the event reallocation of frequency is implemented before a radio station license expires, the user of the new radio frequency spectrum is obligated to pay for all of the costs that arise as a consequence of the reallocation of the radio frequency to the previous user of the radio frequency spectrum. 4897D05 00
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Cont’d..
“Dalam hal realokasi frekuensi dilakukan sebelum ijin stasiun radio berakhir, pengguna spektrum frekuensi baru wajib mengganti segala biaya yang ditimbulkan akibat realokasi frekuensi radio kepada pengguna spektrum frekuensi radio lama”.
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Transfers of Frequency Spectrum Compare Singapore: Telecommunications Act. Art.5A(1). The Authority may, with the consent of or in accordance with the terms of a general authority given by the Minister, grant any spectrum right: (a) unconditionally or subject to such conditions as the Authority may impose and specify in the grant of the spectrum right, including conditions on the sharing and trading of radio frequency spectrum...” 4897D05 00
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Regulatory Aspects of Frequency Rationalization
Cont’d..
Bangladesh: Telecommunication Act. Art. 55(4). “A license issued or a frequency allocated under this section or the right to use such license or frequency shall not be transferable, and if any such transfer takes places it shall be void”.
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Regulatory Aspects of Frequency Rationalization
Cont’d..
Indonesia: PP No. 53/2000 re Use of Radio Frequency Spectrum and Satellite Orbits Art. 25(1). The holder of a radio frequency allocation may not transfer the radio frequency allocation acquired by him to another party. “Pemegang alokasi frekuensi radio tidak dapat mengalihkan alokasi frekuensi radio yang telah diperolehnya kepada pihak lain.” 4897D05 00
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The “Use or Lose” Principle of Spectrum Usage PP No. 53/2000 Art. 26: Radio frequency that is no longer used is obligated to be returned to the Minister. “Frekuensi radio yang tidak digunakan lagi wajib dikembalikan kepada Menteri”. What if the frequency was never used? (“tidak pernah digunakan” instead of “tidak digunakan lagi”). 4897D05 00
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3. Developing an Appropriate Strategy
for Frequency Rationalization
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Deal with the reality today; true, the Government could have been more consequent and consistent in the past What is the desired / preferred end result? What steps should be taken to reach that result? Is this being done for the right reasons? z
z
What opportunities are available in each license? Audit licensed performance; cannot act arbitrarily if legal exposure is to be managed 4897D05 00
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Regulatory Aspects of Frequency Rationalization
Cont’d .. z
z
Licenses are an opportunity – not the problem. Have operators earned the trust granted to manage a scarce public resource? Is the assigned frequency being used?
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Cont’d ..
Have risks been assessed as to possible claims at PTUN (State Administrative court) or in civil court? Can technology play a part in the solution? Changing policy on frequency allocation is legitimate; so is seeking a win-win solution for both Government and frequency/license holder.
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Thank You
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