European Commission refers Spain to European Court over ‘telecoms tax’ and tells them to speed up spectrum refarming implementation

Hola! As yesterday’s readers will know, I am currently in Madrid working from Olswang’s new Spanish office, soI thought it appropriate to give today’s post something of a Spanish slant as Spain has been attracting Neelie Kroes‘ (Europe’s Digital Agenda Commissioner) ire this week.

On 14 March she referred Spain (and France) to the European Court of Justice on the basis that their imposition of turnover related levies which were then directed towards funding  broadcasters. The Commission press release notes that: ‘A law on financing the Spanish public broadcaster RTVE entered into force in September 2009 and imposed a charge of 0.9% on the gross revenues of telecoms operators to make up for the loss of revenue from paid advertising this broadcaster. In October 2010, telecoms operators made the first payments to CMT, the national telecoms regulator. The charge was expected to generate revenue of around €230 million in 2010.’  and goes on to explain that the basis of the reference: the levy is incompatible with EU telecoms rules and in particular Article 12 of the telecoms Authorisation Directive (2002/20/CE), which provides that charges can be levied on telecoms operators only to cover certain administrative and regulatory costs (mainly authorisations and regulatory functions) and should be objective, transparent and proportionate.

On the same day, she requested Spain (and this time Hungary as well) get on with ensuring that the necessary national implementation rules are in place to permit refarming of existing 900 MHz GSM spectrum by the 9 May deadline. Whilst the request has no legal force, the Commission is clearly concerned at the apparent lack of progress and failure to respond may well lead to further infringement action against Spain.

Uncertainty for UK spectrum auctions as refarming permitted

Ofcom permits 2G spectrum refarming

Ofcom yesterday varied the spectrum licences of the UK’s three 2G spectrum licensees (EverythingEverywhere (JV between Orange and T-Mobile), Vodafone and O2) to permit them to use those frequencies for 3G services (mobile broadband) as well as 2G services (such as voice and SMS). 

For more detail see the Olswang update (thanks to Telecommentator).

Uncertainty about digital dividend and WiMax auctions remain

However, uncertainty still remains over the timetable, process and scope for challenge in relation to the proposed UK auctions for the digital dividend (800 MHz) and WiMax (2.6 GHz) spectrum.  The December 2010 Directions to Ofcom, which came into force on 30 December 2010 merely direct Ofcom to carry out a competition assessment (s8 of the Directions) and to auction 800 MHz and 2.6 GHz spectrum (s9 of the Directions).

Those who have been following the saga for some time, may be getting an eerie deja vu feeling right now, and I am reminded of the TV series Dallas where one season turned out to have been a dream.  When Ofcom originally tried to auction the 2.6 GHz spectrum it became bogged down in litigation, and pursuant to the Digital Britain initiative of the last government, the Independent Spectrum Broker identified proposals that could form the basis of detailed direction to Ofcom, thereby limiting the scope of Ofcom’s discretion and (the hope went), limiting the scope for challenging the exercise of that discretion.   We are now back to Ofcom having extensive discretion in terms of the auction process.  Stetson anyone?