Regulators lose it over “use it or lose it”

A popular tool for regulators who want to make sure companies use their spectrum as efficiently as possible is a “use it or lose it” clause in a spectrum licence.

In theory, these clauses give regulators a second chance to assign the spectrum if the licence holder turns out to be either unwilling or unable to use it to provide any services. They are meant to make spectrum hoarding impossible.

But time and time again, it seems that once a company owns a licence for spectrum, it is very difficult for a regulator to prise it off them.

The Belgian regulator (BIPT) found this out last year when it discovered that a part of the 2.1 GHz band it had set aside for a new competitor was completely unused. The regulator tried to provoke the licence holder, Tecteo Telenet Bidco (TTB), into using the spectrum by fining it as much as it could under the terms of the licence.

But as fines were set as a proportion of company turnover and TTB’s turnover was zero, BIPT could only charge the minimum fine of €5,000. A technicality meant TTB avoided any further sanction.

And then this week, UK regulator Ofcom exhorted Inmarsat and Solaris Mobile to use a pan-European 2 x 30 MHz allocation in the S-band for mobile satellite services. The band has been assigned to the companies since 2008, and according to the original authorisation was meant to be used by 2011. But seven years later, not a single byte of data or a single phone call has passed through the spectrum.

Ofcom has issued a “notice of compliance” to the companies, urging them to use the spectrum by the end of 2016. If they fail to do so, they could face unspecified fines or the possible loss of their licences. However, Ofcom’s hands are somewhat tied on this issue as the spectrum has been assigned on a pan-European basis.

Away from the theory of spectrum policy, it’s not clear whether regulators have any real power to say who can use – or lose – these particular spectrum bands.

Toby Youell, PolicyTracker

23/3/2015