On 20 October 2022, the Spanish Competition Authority (the “CNMC”) published a new report about a draft order that modifies the current regulation governing the National Frequency Allocation Table (“NFAT”) related to the implementation of wireless communications systems (the ‘Draft Order’).
This Draft Order is related to the 5G Action Plan adopted by the European Commission in 2016, aiming to reach a homogeneous 5G network in the European Union. In its report, the CNMC analyses some key issues to the functioning and competition of 5G technologies.
The radio spectrum is a public good that is limited and administered by the State. It is distributed in several frequency bands which are used to provide telecommunications and audio-visual services. Among the bands which are useful for 5G technologies, the only one that has not been tendered or made available to the market in Spain is the 26 Ghz band, which is the band between 24.25 and 27.5 Ghz (providing a high spectrum volume of 3.25 Ghz).
The importance of the 26 Ghz band lies in the fact that, due to its radioelectric characteristics, it is especially disposed to the development of services related to Industry 4.0 (i.e. those aimed at the digital transformation of companies) and to provide coverage in areas of high traffic demand or “hotspots”. As the radio spectrum is limited, the allocation of such spectrum volume can become essential for present operators to compete efficiently in the market.
Thus, this Draft Order, aside from incorporating the decisions taken at a European level, proposes two main modifications regarding the 26 Ghz band:
In its report, the CNMC analyses the Draft Order and concludes:
This report was commissioned by the Ministry of Economic Affairs and Digital Transformation in the exercise of the CNMC's advisory powers.
There is no doubt that 5G networks are going to be crucial in the next few years and the CNMC will play a key role to ensure competition in the telecommunication sector. However, the Spanish Ministry seems to have decided not to follow all the recommendations provided by the competition authority to administer the radio spectrum.
On 5 November, 2022, administrative clauses and technical specifications applicable to the public bid concerning part of the 26 Ghz band were published (set forth in Order ETD/1059/2022). And, contrary to the CNMC’s advice, the Order sets the limit of the number of frequencies that can be used by a single operator at 1 Ghz. The reason for disregarding CNMC’s report is that the government considers that its proposal regarding the establishment of a limit of 800 Mhz would not be sufficient for the development of certain digital applications.
Nevertheless, the Order may be appealed within a period of no more than two months.
In particular, this bid concerns the section of the 26 Ghz band reserved to communication operators (i.e., excluding the 450 Mhz reserved for self-provisioning demands). Applications may be submitted until 7 December 2022.
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