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What rules and procedures govern spectrum allocation?

Any person wishing to use frequency spectrum must obtain a licence. A licence is granted on the basis of a criteria competition or, more commonly, of a public invitation to tender (ie, by frequency auction), particularly if there are not enough mobile radio frequencies available in order to meet all applicants' present and future needs.

Importantly, the principles defined by the Federal Council governing the granting of mobile radio frequency licences lack detail. Therefore, the authorities have considerable discretion in setting the allocation or auction rules respectively. However, the authorities have to exercise their discretion in a dutiful manner – that is, in line with the constitutional principles and the legal purpose of the Federal Act on Telecommunications (TCA).


What fees apply to spectrum allocation/authorisation?

The licensing authority in principle charges administration and licence fees for the allocation of frequency spectrum. According to the law and especially relevant in an auction scenario, appropriate licence revenue is to be achieved. It is for this purpose that the licensing authority may require a minimum bid. The lower limit of such minimum bid shall cover at least the licence fees discounted at an interest rate customary in the industry and at matching maturities for the entire licence period, as well as the administrative fees for the invitation to tender and the award of the licence. In 2012, the auction proceeds amounted to just under Sfr1 billion. However, the aim of the law is not to generate the highest possible revenues. Rather, the licence revenue is already deemed appropriate if it is ensured that the frequency spectrum as a scarce resource is not assigned below costs – that is, if the proceeds of the auction cover the licence and administration fees.


Can spectrum licences be transferred, traded or sub-licensed?

Under the TCA, a licence can be transferred, in whole or in part, only with the consent of the licensing authority. This also applies to the economic transfer of a licence. Such economic transfer occurs in case of ‘acquisition of control’, as defined in the Swiss Cartel Act. The draft bill of the Federal Council for the revision of the current TCA intends to regulate explicitly frequency sharing and trading, and make it legal.

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