Minutes of the third meeting of the CEE Regional Working Group
Bucharest, 9 May 2013
The third meeting of the CEE RWG took place in Bucharest, on 9 May 2013, upon the invitation of the Romanian Regulatory Authority, ANCOM, and was dedicated to sharing experience in spectrum auctioning in our region.
Participants: representatives of AKEP, ANCOM, ANRCETI, HAKOM, NMHH, RATEL, joined by representatives of the Ukrainian regulator (NCCIR). Guest speaker – Mr. Joaquin Restrepo, Head of the Outreach and Publication Services Division, Radiocommunication Bureau (BR), ITU.
Mr. Cătălin Marinescu, President of ANCOM, opened the meeting. He welcomed all participants and provided brief information on the meeting scope and structure, explaining that the representatives of the Ukrainian regulator were invited as part of an exchange of experience between the two regulators established at the beginning of 2013. He also drew an outline of the Romanian spectrum auction and introduced the members of the ANCOM team directly involved in the various stages of the auction procedure.
Mr. Bogdan Iana, ANCOM's Executive Director for Radio Spectrum and Numbering Management, moderated the first session and presented a broad picture of the awarding procedure background, type, steps and outcomes, inviting his colleagues to give more detailed accounts on specific issues.
Ms. Ingrid Georgescu, Head of Land Mobile Service Unit presented at length the spectrum packaging for the 800 MHz, 900 MHz, 1800 MHz and 2600 MHz frequency bands award in Romania, the reasons for auctioning the spectrum rights across two time periods, the main objectives of the spectrum awarding, the spectrum caps and the operators' obligations under the licences.
Mr. Iosif Popa, Counsellor to the ANCOM President, introduced some key safeguards taken in the terms of reference in order to ensure efficient auction results and prevent gaming risks. Due to the magnitude of its impact, the process of setting reasonable reserve prices (considering the spectrum value, recovery of release costs, etc.) together with the annual spectrum usage fees, was given particular attention.
The moderator of the next two sessions, Dr. Nicolae Oacă, welcomed the participants and expressed thanks for answering the invitation to this third meeting.
The first speaker of the second session, Mr. Călin Zvancea-Cozan, Head of Licences and Radio Frequency Regulations Unit, proposed the participants a legal approach to the Terms of Reference of the Romanian spectrum auction, highlighting that the legal provisions in force and of the consultation mechanism, as well as the minute observance of the procedural steps were critical for the successful completion of the whole procedure. As well, he drew attention to the potential risks of such an awarding procedure and made some recommendations inspired from the experience of the Romanian auction team.
Next, the floor was given to Mr. Cătălin Mitrescu, Expert, IT Department, who presented the context and the components of the electronic support system used, with illustrative designs and snapshots of the bidder software support, corresponding to the various rounds of the auction.
Dr. Oacă completed the picture of the Romanian spectrum auction giving an overview of the pros and cons towards auctions compared to the beauty contests, speaking about types of auctions, basics for spectrum valuation with an example for the Macedonia case, the need for consultancy, costs of organizing a spectrum auction and main steps in planning and organizing a spectrum auction.
The guest speaker of the meeting, Mr. Joaquin Restrepo (ITU), addressed a wrap-up speech concerning the sessions on the Romanian experience on spectrum auctions, pointing out that the amount of money raised should not be the unique consideration while organising a spectrum auction and the main criterion for evaluating its success. Other important concerns should be the impact of the auction on the reduction of the digital divide and the development of the market.
During the third session, after submitting the agenda for adoption, Dr. Oacă gave the floor to Mr. Restrepo, who delivered the key presentation, on Spectrum Auctions for Mobile Broadband: A Multifaceted Approach. From the ITU standpoint, in performing a competitive awarding procedure, the organisers need to achieve a fine balance between the auction goals - highest value – and the regulator duties - quality, affordability and accessibility of telecommunications services. Special emphasis was placed on ensuring the provision of Universal Service and on the NRA's matching up the roadmap for coverage duties and refarming, especially in the developing economies, which need the broadband opportunities more badly than others. However, the authorities should explain and share their vision in organizing the spectrum auction, in order to avoid over-expectations and disappointment.
Ms. Ivančica Sakal (HAKOM) started her presentation by reminding the audience Croatia's special geographic shape, which influences the spectrum quality due to the neighbouring countries usage programs, despite the country's readiness to award the Digital Dividend ever since 2010. As an awarding procedure, Croatia chose the public call, as the quickest and the most transparent way under the given circumstances. The fees were defined by the Ministry and were not as high. Two operators won blocks 2x10 MHz in October 2012 until 2024 and the procedure of solving interferences with the neighbouring countries is in progress. Therefore, HAKOM's most important piece of advice would be: define responsibilities regarding interferences with DVB-T receivers before assignments.
Approaching the management issues of the CEE Regional Working Group, Mr. Marinescu (ANCOM) wished to make some clarifications in regard of the newly proposed draft article on the chairmanship and secretariat of the Working Group, in favour of which consensus was not reached (10 out of the 12 Group members electronically upheld the establishment of the Chairman position, for a three-year term, most of them voting for Dr. Oacă exercising a first mandate). He mentioned that, since Dr. Oacă is no longer an ANCOM employee, further specifications need to be made regarding the representative status of the Group members, especially when it comes to the Chairman position. Therefore, related issues such as the voting procedure, the role/responsibilities of the chairman and the term of its mandate would need closer consideration. The Group members have been invited to make proposals and comments on the draft of several articles, to be circulated by e-mail for the members' due consideration (Annex 2 to these Minutes). As well, Mr. Marinescu proposed enlarging the scope of the topics approached within the Group, inviting the members to submit new ideas and suggestions for regional cooperation by e-mail (see list in Annex 3 to these Minutes).
Concerning the Secretariat of the Group, the proposal of ANCOM's ensuring this exercise in its Bucharest headquarters, with the possibility of other members fulfilling it, upon their proposal, was adopted by the participants, according to the electronic votes expressed. Ms. Cristina Velea, on behalf of the newly-established Secretariat, presented the steps taken by the Romanian regulator towards a professional version of the regional portal, which would enable the member authorities to directly upload their own contributions, and expressed the belief that the resources committed by ANCOM, alongside the members' active involvement in updating the portal with news and information on their respective countries' status will give a vital impulse for www.ceeregionalworkinggroup.net to become a real one-stop-shop for relevant information in the region.
Then, Dr. Oacă invited the participants to continue the round table on the DSO and ASO stage in their countries, as well as on their plans of organizing a spectrum awarding procedure.
Albania: Mr. Shefqet Meda (AKEP) showed that Albania has not concluded the DSO, but is moving ahead. The strategy was approved, an interministerial committee and a technical secretariat were established, but the legal framework is still in progress. If there are free bands before 2015, they will plan an auction.
Croatia: Ms. Ivančica Sakal (HAKOM) specified that Croatia has no plans for awarding the 2.5 GHz band now, because there are no interested operators.
Hungary: Mr. László Pados (NMHH) said that Hungary will finish the DSO in 2014, in an effort to complete it even sooner (October 2013). This process will take place in two steps: several analogue stations will be closed in July 2013, then (in October) there will be performed the migration of frequencies DVB-T in 16 channels, therefore the Digital Dividend band will be free in these regions before the end of 2013. 3 multiplexers are already working, with good coverage. All the remaining analogue stations (public/commercial TV) are under an accelerated procedure to be switched off in 2014, to clear spectrum for LTE. Hungary also intends to prepare a tender for the 2.6 GHz band.
Moldova: Mr. Piotr Mura (ANRCETI) explained how the DSO is a complicated matter in Moldova, due to the political circumstances. In the first quarter of 2014, there will be a beauty contest for awarding the fixed licences for the next 15 years, taking into account the principle of technological neutrality.
Romania: Mr. Bogdan Iana (ANCOM) was glad to announce that the National Strategy for the Transition to Digital Television was under approval in the relevant ministry and that it was to be launched in the short run. 4 multiplexers are to be launched, below and under channel 49. By June 2015, Romania will be prepared to auction the 700 MHz band. Difficulties will be encountered in the implementation of Digital Dividend II, due to the need for concluding agreements with the neighbouring countries (the same problems as Hungary). Romania must award the unawarded spectrum by April 2014, therefore there will be an auction at the beginning of 2014. This spectrum of the Digital Dividend is unoccupied because Romania has not introduced digital television.
Serbia: Ms. Jasmina Radunovic (RATEL) showed that a new NTFA has been adopted in Serbia, to accommodate new technologies. There's not a guarantee for the switchover terms or deadlines for each region, since transition from analog to digital is planned to be in phases by regions, waiting for a government decisions. The final date for DSO is expected by June 2015, transition with 2 multiplexers and channels 61-69 will not be used. RATEL has no plans for spectrum auctions yet, but the operators are interested in the 1800 MHz band (for LTE), not in the 2.6 GHz band, therefore RATEL is planning to organise meetings with the operators on 1800 MHz issues. Mr. Restrepo's presentation on Spectrum Auctions for Mobile Broadband: A Multifaceted Approach pointed out that the 3G or 4G definitions might be different, in that manner WiMAX and LTE may be included in the IMT2000 standards we should consider the effect.
Special guest Ukraine: Mr. Sergii Spielnikov (NCCIR) said that in Ukraine, the Ministry of Justice establishes the awarding rules, by law. A number of auctions have already been organised, and 60 licences granted (for WiMAX, mostly, and 3 for GSM). As well, spectrum was awarded for the CDMA 650 and 800 technologies. Concerning the 209 MHz band, the Defence Ministry and the operators stopped the auction. The Ukrainian law provides 100 days for organizing an auction and – since 2006 – one auction/band at a time. There are requests for additional bands for CDMA 450, therefore an auction is planned for the relevant band. The operators are not glad to implement the LTE technology and do not apply the equivalent standards.
During the Q&A session, Dr. Oacă asked the ARCETI representatives whether preparations for Moldovs'a signing the coordination agreements in the LTE bands were made. Mr. Piotr Mura answered that this agreement was under the consideration of the provisional government for approval.
Mr. László Pados proposed RATEL a temporary solution, until the enforcement of the new NTFA (2015), i.e. a migration of digital frequencies in the channels above 60, to free the Digital Dividend.
Dr. Oacă suggested the Ukrainian representatives to enquire their management on the possibility of NCCIR joining the Group, if the other group members had no objection. No objections were raised.
In the end of the session, Mr. Marinescu (ANCOM) expressed his hope that the discussions had proved useful, reiterated the invitation to proposing new ideas for future work, thanked all the participants and officially closed the meeting.