After the Belgian Constitutional Court’s (BCC) request to the European Court of Justice (ECJ) for a preliminary ruling, the ECJ, in its judgment of 21 March 2013, held that Member States enjoy a broad discretion when determining the form and amount of spectrum fees.

In the case at hand, three Belgian mobile phone network operators holding a right of use of radio frequencies objected to the payment of a renewal fee for this right of use. In the operators’ views, the imposition of a renewal fee in addition to the one-off fee which is due when the right of use is granted would be contrary to Articles 3 and 12 to 14 of Directive 2002/20/EC on the authorisation of electronic communications networks and services (Authorisation Directive).

Consequently, the BCC decided to refer the case to the ECJ. In this case, the BCC is amongst other things asking whether a Member State can levy a one-off fee for the acquisition of the rights of use and its renewal when that one-off fee is additional to an annual fee, the amount of which depends partially on the value of the frequencies, in order to encourage optimal use of the scarce resource that radio frequencies are.

In its ruling, the ECJ considered that since those rights of use are only granted for a limited period, the authorisation renewal procedure must follow the same procedure as when granting the initial right of use.

The ECJ said that Article 13 of the Authorisation Directive does allow Member States to charge for the rights of use of radio frequencies with the purpose of ensuring optimal use of these frequencies, in addition to charges that are intended to cover administration costs. Moreover, Recital 32 of the Authorisation Directive states that the fees may be charged as a lump sum or in periodic amounts. In addition, the Directive does not describe the purposes for which these fees should be collected.

However, Article 13 does require that the fees for radio frequencies be (i) objectively justified, (ii) transparent, (iii) nondiscriminatory and (iv) proportionate in relation to their intended purpose, and (v) that they take into account the objectives that are laid down in Directive 2002/21/CE (the Framework Directive), such as the promotion of competition and the efficient use of radio frequencies. Furthermore, the Authorisation Directive states that the fee charged to the mobile phone operators must pursue the optimal use of such resources and not hinder the development of innovative services and competition on the market.

Provided these conditions are fulfilled, the Authorisation Directive does not preclude national legislation from charging a fee that is intended to favour optimal use of radio frequencies, even when it is in addition to another annual fee that partially pursues the same objective.

Concerning the rules for fixing the amount of the one-off fee, the ECJ held that radio frequencies are a scarce resource enabling the holder of a right of use to obtain a significant competitive advantage when compared to other operators. According to the ECJ, this competitive advantage would justify imposing a charge that reflects the value of the use of such scarce resource. In order to set the fee at an appropriate level, Member States have to take into account the economic and technical situation of the market concerned. It follows that the fee for rights of use may be fixed by reference to either the amount of the former one-off licence fee calculated on the basis of the number of frequencies and months to which the rights of use relate, or through the amounts raised through auction. The ECJ therefore affirmed the broad discretion of Member States in setting spectrum fees.

The case can be found on http://curia.europa.eu/