Discussion Papers

No. 401: New approaches for designing spectrum fees and implications for Germany

Authors: Lorenz Nett, Stefano Lucidi, Ulrich Stumpf
November 2015

(Full version only available in German) 

Summary

Frequencies are used for wireless transmission of signals. Broadcasting, point-to-point fixed links, point-to-multipoint fixed wireless access, cellular mobile services, satellite transmissions are well-known examples of applications. Spectrum is scarce, especially in case of good propagation characteristics. Spectrum for mobile broadband access is the most prominent example of frequencies which due to high demand are assigned via spectrum auctions. Billions of Euros paid in these auctions provide a strong indication of the high economic value of these frequency bands.

In Germany, spectrum management is performed by the Bundesnetzagentur (BNetzA), the German spectrum management agency. BNetzA assigns the spectrum user right for specific spectrum bands. Spectrum users have to pay an assignment and frequency user fee. Currently, most spectrum users only have to pay a fee which covers the administrative costs. However, the increasing demand for spectrum raises doubts about the economic reasonableness of such an approach. Spectrum fees can be used as an instrument to promote an efficient usage of spectrum. Such fees create an incentive to use spectrum in a reasonable way. In the United Kingdom, Ofcom has been applying the so-called Administrative Incentive Pricing (AIP) approach for years. Other Spectrum Management Agencies around the world have also switched to spectrum fee regimes which were created to be transparent, objective, non-discriminatory and set the right incentives for an efficient usage of spectrum.

In this document we will cover these developments by presenting interesting new spectrum fee approaches in selected countries. The procedure is motivated by elucidating how a spectrum fee schedule should be designed from a regulatory point of view. The main issues in the study will be the following:

  • General approaches to determine spectrum fees highlighting the pros and cons of each concept;
  • An international benchmark on spectrum fees focusing on countries which recently implemented a consistent and well-structured spectrum fee schedule;
  • Summary and conclusion of the benchmark with a recommendation for a reasonable approach for Germany;
  • The current legal framework for spectrum fees in Germany.

Discussion Paper is available for download.

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