The various reactions to ICASA’s cancellation of the Invitations to Application (ITA) for spectrum licenses in the 2.6 and 3.5 GHz bands, which were due on July 30th, reflect an unfortunate conflation and confusion of two overlapping but nevertheless quite distinctive and fundamental issues, namely:

1. What is the best spectrum structure and procedure for allocating new (and maybe re-allocating existing) spectrum holdings; and
2. How can a healthier and more competitive, customer-friendly supply of network access and services be fostered in South Africa, given the history (and current behavior and attitudes) of incumbents that are viewed by many stakeholders as profoundly unsatisfactory?

Spectrum policy and management constitute one of the tools or areas for maneuvering which a regulator and Ministry can and should apply in addressing the second issue, but no means the only one. Nor is that the only goal of spectrum policy, which must also consider questions of economics and what uses of scarce spectrum will generate the greatest overall value for society and the economy.

However much the incumbents may be disliked and mistrusted in some quarters, they and the assets they control must and will continue to play key roles in the future of telecommunications in South Africa. The goal should be to change the behavior of these incumbents with appropriate incentives and effectively enforced penalties. It would be a “shoot yourself in the foot reaction” to try to fragment scarce spectrum resources, under the mistaken impression that this is the best way to ensure adequate competitive intensity. Depth of spectrum is critical to techno-economic efficiency of a network yet there is only a limited amount of bandwidth to go around.

Measures which either operators themselves and/or regulators can initiate, encourage, and sustain to contribute to ensuring competitiveness and/or attractive network economics in mobile markets include:

1. The application of antitrust rules rather than fixed prescriptions to spectrum holdings
2. Mobile number portability and other means to reduce customers’ switching costs between services providers,
3. Radio access network infrastructure sharing (among operators as well as with respect to authorizations of MVNOs (mobile virtual network operators),
4. Economical and ready access by mobile access network operators to wholesale facilities for backhaul and core networks,
5. Reasonable mobile termination and roaming rates,
6. Coverage obligations (“use it or lose it”) on spectrum winners, and
7. Rules to permit spectrum trading, i.e. creation of a secondary market in spectrum.

In the formulation of conditions and procedures for allocating spectrum a few diminishing but possibly still lingering mistaken impressions specifically of the wireless arena should be dispelled. They include for example:

1. WiMAX is the platform for entrants and entrepreneurs, while LTE is for incumbents
2. WiMAX versus LTE is equivalent to unpaired (TDD) versus paired (FDD) spectrum
3. Competition and the principle of technology neutrality are best served by allowing bidders for spectrum to choose the amounts and locations of unpaired and/or paired spectrum they want, instead of competing for predetermined blocks of such spectrum.

Whatever path forward is eventually followed by ICASA and DoC with regard to new spectrum allocations, it should at least be founded on accurate and clear views of technological and economic realities, that cut through emotional (however understandable and driven by justified frustration) and/or self-interested biases. If these biases are acted upon they may defeat the purposes even of some of the parties who express them.

Spectrum policy in SA << comments and views

Full Article at BMI-T