Spectrum Harmonisation and the Regime of Harmonised Bands
The use of radio-frequency spectrum in Georgia is regulated by the Law on Electronic Communications, whose Article 47-2 defines the procedure for the harmonisation of spectrum: for the purpose of its effective management and use, the Commission ensures the harmonisation at national level of the bands harmonised for the services and terrestrial systems provided for by the decisions of the European Commission, through amendments to the National Frequency Allocation Plan and the modification of licences for the use of scarce resource.
In harmonised bands licences are issued under the principle of technological and service neutrality, for a term of 15 years. To promote the introduction of new technologies, an existing licence is subject to modification: the designation of the resource is modified so that it may be used in a neutral manner; the validity of the licence is set at 15 years from the modification decision; and the fee is recalculated by the Commission’s rules — from the new fee is deducted a part directly proportional to the amount already paid. The licensee may request modification for only a part of the resource and cede the remainder, or refuse modification altogether — the licence is then deemed revoked at its own initiative and the fee paid is not returned. The payment schedule must not require more than 50 per cent of the fee to be paid within 1 year.
The Change and Ceding of Radio Frequencies
Article 47-3 balances changes in the plan with the interests of users. When the plan is amended, the Commission may replace a frequency assigned to an authorised person by decision — in that case the authorised person has no right to claim compensation. A resource granted under a licence may be replaced within the same band by another resource of the same quantity, if the licensee can continue its activity without changing the deployed technology; where costs arise, the licensee may apply to the Commission with a substantiated demand for their coverage, and the Commission may rely on the conclusion of an audit company.
For an operator these norms create a map of counter-risks in spectrum management: an amendment of the plan may affect its resource, so expected changes of the plan must be taken into account when choosing a band and planning investments. A licence under harmonisation is modified within 3 months of the amendment of the plan.
The Spectrum Licence and Its Term
Under Article 49, a licence for the use of radio-frequency spectrum is issued by the Commission through auction or tender, and a licence is issued for a term of 10 years. The licensee is obliged to use the scarce resource in conformity with the legislation and the conditions of the licence and to ensure its optimal and effective use, including through the introduction of innovative technologies.
The extension mechanism is precisely regulated: the holder may apply to the Commission for extension 1 month before expiry, and where the use has been in conformity, the term is extended by 10 years. On extension the payable amount is built on auction prices: the arithmetic mean of the prices recorded at auctions held during the last 2 years; where more than 2 auctions were not held in that period — the mean of the last 3 years; where only 1 auction was held — its price; where none was held — the starting price of the auction to be held; plus the licence fee. For a licence issued through tender, the Commission sets the price on the basis of international practice and the conclusion of an authoritative organisation.
The Basis for Obtaining a Licence and the Auction
Under Article 50, the basis for obtaining a licence is the existence of free resource, the person’s application and victory in an auction. The Commission decides to hold an auction where the plan provides free spectrum and there is a demand, or where the licensee applies to transfer the right of use to another person — in which case the Commission holds the auction under the general rule. To ensure competition, the Commission may by substantiated decision restrict a person’s participation where, together with affiliated persons, it would hold more than the maximum resource determined for the band.
Article 52 regulates the auction procedure: the decision is disseminated through the media and on the Commission’s website at least 1 month in advance; the decision must indicate the geographical boundaries of the market, the technical and operational conditions, the starting price and the deadlines. The criterion of victory is the maximum offer of price, of which 30 per cent is paid within 1 month of the decision; the licence is issued within 7 working days of that payment, and the remainder is paid within 1 year of receiving the licence. Permits of other agencies are subject to the one-stop principle: the Commission forwards the documentation within 5 working days, and a refusal must be substantiated. Practical activity must begin within the period determined by the decision, and the cessation of use and activity for more than 3 consecutive months or for 6 months within one year is impermissible.
The Transfer of the Right to Another Person
Article 51 creates the instrument of secondary circulation of spectrum: the licensee is entitled to transfer the right of use to any person, wholly or partially, by direct assignment, without an auction, concluding a contract for that purpose; on the basis of a joint application the Commission starts a public administrative proceeding. The assignment may be restricted where the transferee has arrears of fees, would hold more than the maximum resource, or where the resource serves end consumers and the obligation to provide the service is not confirmed.
After the assignment the new holder begins to use the spectrum only after the Commission’s decision and the passing of authorisation. A holder of a licence obtained by auction may likewise apply to the Commission with a demand to hold an auction for transfer to any authorised person. A spectrum market is thus formed in which the resource circulates between holders under the Commission’s control.
Frequently Asked Questions
For what term is a spectrum licence issued?
Under Article 49 — for 10 years with the possibility of extension; in harmonised bands for 15 years under the neutrality principle.
How does extension take place?
The application is filed 1 month before expiry; the fee is calculated by the arithmetic mean of the prices of recent auctions under the Commission’s procedure.
Can spectrum be transferred without an auction?
Yes. Under Article 51 by direct assignment, with a contract and a Commission proceeding; a holder may also request that an auction be held.
What is required of the winner of an auction?
Payment of 30 per cent of the price within 1 month of the decision; the licence is issued within 7 working days of that payment and the remainder within 1 year.
How We Help on Legal.ge
On Legal.ge we assist in every spectrum-related procedure: we will assess the prospects of participation in an auction and of restrictions, prepare the application and documentation, plan an assignment or modification, and protect your interests in relations with the Commission. Contact our team before the auction is announced.