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28 GHz Auction - The Regulations, Notice and Wireless Telegraphy Act Licence |
This paper invites comments on three key documents which provide the legislative basis for the auction of licences for Broadband Fixed Wireless Access (BFWA) at 28 GHz. These documents are the Regulations to be made under section 3 of the Wireless Telegraphy Act 1998, the Notice to be issued under the Regulations, and the licence which is the subject of the auction. They were placed on the Agency website on 19 June. Comments should be sent to the Agency by 18 July, by e-mail to joe.sonke@ra.gsi.gov.uk.
2. The legal basis for any auction of licences to be issued under the Wireless Telegraphy Act 1949 rests in the ability of the Secretary of State to make regulations under section 3 of the Wireless Telegraphy Act 1998. Subsection 3(1) states that "…the Secretary of State may by regulations provide that [in certain cases]… applications for the grant of wireless telegraphy licences must be made in accordance with a procedure which—
| (a) | is set out in a notice issued by him under the regulations, and |
| (b) | involves the making by the applicant of a bid specifying an amount which he is willing to pay to the Secretary of State in respect of the licence." |
Thus, in order to hold the auction for BFWA licences, the Secretary of State has to issue two documents, the Regulations and the Notice. The Regulations state which licences shall be the subject of the auction, and set out the matters to be dealt with in the Notice and the manner in which the Notice shall be published. They state that detailed provisions for the auction will be found in the Notice. The Notice deals with the details of who may apply and how, the criteria for prequalification, the process of the auction, and the procedures for granting the licences and making payment.
3. The Regulations will be made by means of a Statutory Instrument. This involves publishing the draft Regulations for a minimum of 28 days and considering any comments made on them within that time. The Regulations will then be made and laid before Parliament, and will come into force after 21 days. The Notice is not subject to the same statutory procedure, but given the complexity of the procedures it is sensible to publish the draft Regulations and Notice together so that they can be read as a whole.
4. A licence issued under the Wireless Telegraphy Act 1949 gives permission to use designated spectrum in accordance with various terms. There will be forty-two licences for BFWA 28GHz spectrum subject to the auction prescribed in the Regulations and Notice. For the guidance of potential bidders for licences, an Information Memorandum will also be published.
| 12. | The draft Regulations contain a definition of "Broadband Fixed Wireless Access" – "Broadband Fixed Wireless Access" means the provision by means of a wireless communications system of two-way wireless communications links over which data may be transmitted and received at rates of at least 2Mbits/second on demand and whereby end users gain access to other telecommunication systems. |
| 13. | The Schedule to the Regulations contains a description of the fourteen licence areas - eleven English regions plus Scotland, Wales and Northern Ireland. |
| 14. |
The three licences on offer in each area are also shown in the Schedule. They are: Licence 1 28.0525– 28.1645 GHz paired with 29.0605 – 29.1725 GHz Licence 2 28.1925 – 28.3045 GHz paired with 29.2005 – 29.3125 GHz Licence 3 28.3325 – 28.4445 GHz paired with 29.3405 – 29.4525 GHz |
| 15. | The Notice, which includes the formal invitation to apply, cannot be issued before the Regulations have come into effect. This is expected to be in early August, not less than two weeks before applications must be made. In order to give prospective bidders a reasonable time to prepare their applications, we intend to publish an Information Memorandum in mid July. | ||||
| 10. |
The Notice is a comprehensive description of the rules applying at each stage of the auction – from invitation to grant of licences. Many of the rules are identical to those applying to the 3G auction but some have been modified for the specific design features of the 28 GHz auction. This design was described in BFWACG(00)25 and (26). In the light of discussions with industry some of the features set out in those two papers have been changed. The changes described below have been reflected in the Notice.
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| Deposits | |||||
| 15. |
The rules on deposits have been simplified. There will be an initial deposit of £20,000 times the number of regions on which the bidder indicates in his application that he intends to bid. Additional deposits will be required as the aggregate value of bids increases. Until an appropriate additional deposit is received a bidder will not be permitted to bid on all the licences he may wish to. Bidders will therefore need to ensure that, at any time, they have on deposit with the Secretary of State sufficient sums to cover their planned bidding activity in forthcoming rounds. This applies to the first round, as well as succeeding ones: deposits prior to the first round will need to cover the reserve prices for licences in each of the regions on which a bidder intends to bid. How far in advance they need to deposit additional sums will be a matter for their own judgement: it would seem prudent for deposits to be sufficient to cover bids likely to be made at least during the following few days. Additional deposits will be calculated on a sliding scale, as shown in the table below:
Thereafter, when the amount in Column 1 is increased to an amount which is double the immediately preceding amount in that Column the corresponding amount in Column 2 will be increased to an amount which is double the immediately preceding amount in that Column.
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| Penalties | |||||
| 17. |
Where minor penalties are imposed they will be deducted from the bidder’s deposit on notification by the auctioneer (not at the end of the auction). If this would reduce the deposit below the level required to cover his aggregate bids in forthcoming rounds the deduction may be deferred for two days.
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| Recess days | |||||
| 18. |
Each bidder will be entitled to require a recess day if for reasons outside his control he is unable to submit a bid. When there are ten or fewer bidders remaining in the auction each will have one opportunity to require a recess day.
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| Activity rules | |||||
| 19. |
Throughout the auction the auctioneer will set the minimum level of activity that each bidder must meet in any one round, if he is not to have his bidding eligibility points reduced. (A bidder’s eligibility points determine the number of licences on which he may place bids.) Bidders will be given notice in any change in the level of activity required four rounds in advance of the change.
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Tied rounds |
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| 20. |
In the event of a tie for the current highest bid on a licence the auctioneer will employ a random method to determine which bidder should be deemed to hold the current highest bid.
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Last bids |
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| 21. |
The auction rules will not provide for a bidder to declare that he is submitting his last bid in a region and for the minimum raise requirements to be suspended.
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| Auctioneer’s ending the auction | |||||
| 22. |
The auction rules will not provide for the auctioneer to retain the option to halt the auction after a large number of rounds.
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The Wireless Telegraphy Act Licence |
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| 22. | The licence sets out all the terms and conditions on which the licensee is authorised to operate radio equipment. This includes frequency bands, geographical limits, purpose of use, period of the licence, payment of licence fees and technical requirements. A special condition is included in the licence to cover "use it or lose it obligations". This provides that the licensee shall install and use radio equipment in such a way as to enable the provision of services to at least 10% of local units within his licence area by no later than 30 June 2002 (and until the termination of the licence). "Local unit" means a small business unit, such as individual sites within a business enterprise, as defined by the Inter Departmental Business register for the Office of National Statistics. Licensees will be required to provide on a regular basis information to allow the monitoring of this requirement. | ||||
The following 
files are available:
| BFWACG(00)30 - 19 June 2000 |
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