Spectrum: use it or lose it in a clever way?

The Independent Communications Authority of South Africa (ICASA) recently issued a notice to inform “all interested stakeholders” of a workshop on spectrum fees to be held on Monday, 5 March 2012.

According to the notice, ICASA has introduced an “Administrative Incentive Pricing (AIP) scheme” for electromagnetic spectrum which will take effect from 1 April 2012.

ICASA said that the scheme will cause significant changes in how the fees for spectrum licences are calculated and affect all spectrum licensees.

AIP was introduced by the Radio Frequency Spectrum Licence Fee Regulations of 2010 as the new basis for calculating radio frequency spectrum licence fees in South Africa.

Ellipsis Regulatory Solutions, a legal consultancy specialising in telecommunications and related industries, explained that AIP involves the stipulation of a specific formula for the calculation of fees for the following applications:

  • point-to-area
  • point-to-point
  • satellite hub ground stations
  • satellite VSAT subordinate ground stations.

Ellipsis said that the rationale behind the setting of the fees is that they should at least cover the administrative cost incurred by ICASA to regulate spectrum. The updated structure will hopefully serve to introduce greater efficiency into the use of spectrum in South Africa, Ellipsis said.

Another change to be introduced is that state-owned signal distributor Sentech will have to start paying spectrum license fees to ICASA, which it hasn’t had to do before.

SA’s spectrum licensing mess

Sentech is sitting on 50MHz of spectrum in the 2.6GHz band – prime real-estate for high speed mobile broadband services such as LTE. The company has yet to use the spectrum to roll out services.

ICASA will reduce and relocate Sentech’s assignment in the 2.6GHz band for the possible roll-out LTE, and will also give the state-owned signal distributor choice spectrum in the 800MHz “digital dividend” band.

Spectrum licensing in SA has also been in the spotlight recently with ICASA asserting that Wireless Business Solutions (WBS), which operates iBurst and Broadlink, has been running around 1,000 unlicensed wireless links that they have rolled out since 1 April 2010.

WBS has racked up a bill to the tune of R24 million in outstanding license fees, ICASA said.

In 2009, irregularities around the use of Sentech’s spectrum by Screamer telecoms to provide WiMAX services came to light. Screamer said that they had an agreement in place with Sentech, while Sentech denied Screamer’s claims.

A year later, former Sentech chairperson Quraysh Patel told parliament that Screamer was illegally using their spectrum. The new chairperson of the state-owned signal distributor, Logan Naidoo, reiterated this statement in 2011 and called on ICASA to act against Screamer.

The sub-licensing of spectrum is not allowed in South Africa, but many industry players have called for this regulation to be re-evaluated to address issues like the Screamer debacle and the risk posed by spectrum laying fallow.

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Spectrum: use it or lose it in a clever way?