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Viewing cable 06MANILA144, SPECTRUM MANAGEMENT POLICIES

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Reference ID Created Released Classification Origin
06MANILA144 2006-01-11 08:39 2011-08-25 00:00 UNCLASSIFIED Embassy Manila
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 03 MANILA 000144 
 
SIPDIS 
 
USDOC FOR NTIA 
STATE FOR EB/CIP/MA 
 
E.O. 12958: N/A 
TAGS: ECPS EINV ETRD ECIN RP
SUBJECT: SPECTRUM MANAGEMENT POLICIES 
 
REF: STATE 22577 
 
1. Summary.  This cable outlines responses by GRP National 
Telecom Commission to reftel questionnaire on spectrum 
management.  End summary. 
 
 
POST RESPONSE TO RADIO FREQUENCY SPECTRUM SURVEY 
 
A.  Which organizations are involved in spectrum management 
in your country?  To whom are they responsible - executive 
branch, legislative branch, military - or are they 
autonomous? 
 
The National Telecommunications Commission (NTC) is 
responsible for spectrum management in the RP.  The NTC is 
administratively attached to the Department of 
Transportation and Communication (DOTC), but it takes policy 
direction from the Commission on Information and 
Communication Technology (CICT), which is under the Office 
of the President.  There is a bill that would create a 
separate Department of Information and Communications 
Technology (ICT), but Congressional hearings have not yet 
been held to move it forward. 
 
B.   Assignment  Process:  Please describe the  mechanism(s) 
your country uses to assign spectrum (for example, auctions, 
lotteries, comparative hearings).  To what services and / or 
bands are such mechanisms applied? 
 
The NTC manages a formal application process for frequency 
allocation.  According to RP law (Republic Act 7925 passed 
in March 1995), there are two basic principles used to 
determine allocation.  First, allocations are to be awarded 
to the best-qualified applicants. Second, an open tender 
bidding process is required for cases in which demand for 
specific frequencies exceeds availability.  Applicant 
qualifications are evaluated according to a pre-determined 
set of criteria, which considers possession of a legislative 
franchise, track record, existing infrastructure, financial 
stability and the absence of outstanding financial 
obligations to the NTC.  This allocation process applies to 
all services and bands. 
 
A recent bidding process for third generation (3G) 
allocations demonstrates this process.  The NTC determined 
that five International Telecommunications Union (ITU) 
identified frequency bands were available for allocation. 
Nine companies applied for qualification as 3G service 
providers.  However only four applicants were deemed to be 
qualified based on a set of criteria published on the NTC's 
website www.ntc.gov.ph (ref Memorandum Circular 07-08-2005), 
and therefore the allocations were awarded to those four 
companies with the first option to choose a frequency band 
granted to the most qualified candidate.  The NTC 
disqualified one applicant because of an outstanding debt to 
the NTC.  If more than five applicants had established 
satisfactory qualifications then an open tender bidding 
process would have ensued. 
 
C.  Licensing Regime:  Please describe your spectrum- 
licensing regime.  Are licenses awarded for the provision of 
a specific service, or a specified technology standard?  Are 
the licenses subject to renewal? 
 
Licenses are awarded based on the specific service 
requested.  The GRP maintains a "technology-neutral" 
position with regard to licensing; companies may use any 
chosen technology.  A license is valid for 3 years and can 
be renewed for continued use.  The renewal process is less 
rigorous than the initial assignment process.  There is a 
registration license fee that ranges from $8 - $18 per year. 
 
D.  Licensee Privileges:  What flexibility do licensees have 
(e.g. , secondary markets) to transfer their spectrum rights 
to other parties?  May licensees aggregate licenses or 
subdivide them?  May licensees make all or part of their 
spectrum available to other entities based on geography of 
time?   May licensees accept payment in exchange for 
spectrum access? 
 
Transfers: 
It is possible to transfer spectrum rights to other parties. 
However any such transfer requires NTC approval.  The 
transferee is required to demonstrate qualifications which 
meet the NTC's allocation criteria. 
 
Aggregation: 
Licensees may aggregate licenses and several telecom 
companies have done so following mergers.  The Commission 
must approve all requests for aggregation.  (Note:  RP law 
does not include anti-trust legislation.  There is no 
mechanism to address monopolistic threats, which may arise 
from aggregation.  End Note.) 
 
Sub-division: 
Licensees may sub-divide licenses.  However the beneficiary 
of any such sub-division is required to demonstrate 
qualifications which meet the NTC's allocation criteria. 
Licensees may choose to make all or part of the spectrum 
available to other entities through transfer or subdivision. 
 
Compensation for 3rd Party Access Arrangements: 
Licensees cannot accept payment in exchange for spectrum 
access.  The GRP considers the radio frequency spectrum to 
be a public resource rather than a commodity. 
 
Other Considerations:  Re-Allocation of Spectrum Assignments 
The GRP reserves the right to re-allocate existing spectrum 
assignments as necessary.  A public hearing is held prior to 
re-allocation.  New assignees are expected to reach an 
agreement with legacy licensees or "tenants" on the channel 
with compensation at the expense of the new entrant.  For 
example, negotiations may lead to an agreement to carry the 
tenant on the assignee's network, a buy-out of the current 
tenant or compensation for infrastructure investments. 
Disputes may be raised with the NTC for consideration. 
(Comment:  There seems to be little structure around this 
negotiation.  The government does not get involved unless 
the affected parties cannot reach an agreement privately. 
This uncertainty may hinder efficient use of the spectrum. 
End Comment.) 
 
E.  Spectrum Fees:  What type of fees are imposed on 
spectrum users?  How are fees calculated?  Which, if any, 
spectrum users are exempt from fees? 
 
Edgardo Cabarios, Director or of the NTC's Common Carrier 
Department indicated that the RP was the first country to 
assign spectrum user fees to all services and all users in 
1996. Spectrum fees had been an important source of revenue 
for the DOTC, contributing about 500 million pesos to the 
National coffers in 2005.  The NTC expects to generate about 
900 million pesos in spectrum user fees in 2006. 
 
According to RP law, "spectrum user fees shall be applied 
uniformly and without discrimination to all users under the 
same classification / category.  Services which cater to 
emergency situations as may be determined by government, 
national disasters, public safety and national security 
shall be exempt from the payment of spectrum user fees."  A 
committee appointed by the Commission makes recommendations 
on the fee schedule.  The schedule is then discussed at a 
public hearing before the Commission approves the final 
schedule of spectrum user fees.  Maritime, military and 
broadcasting groups are exempt from fees.  Maritime and 
military groups have compelling safety and security needs 
with regards to the spectrum and the broadcasting groups are 
exempted based on freedom of the press. 
 
Cabarios described three criteria which are considered when 
determining fees:  1) "sale-ability" of the frequency, 2) 
bandwidth requirements and 3) geographic considerations - 
fees are decreased for service delivery in rural areas to 
attract companies to underserved markets. 
 
In a recent allocation for 3G-radio bandwidth, spectrum fees 
were tied to the number of subscribers.  A base price of 
$1.2M (for 10 MHz) was established to accommodate up to 4 
million users.  An additional spectrum user fee of $26k will 
be assessed for each additional group of 100,000 users over 
the 4 million-user threshold. 
 
F.  Treatment of Government versus Commercial Users:  Are 
government or other non-commercial users subject to the same 
or different rules as commercial users with respect to 
questions 1-5 above?  If yes, please describe. 
 
The same process rules are applied to both Government and 
Commercial Users. 
 
G.  Other Incentives:  Please describe what other means (not 
already identified) are used to encourage more efficient use 
of spectrum through market-based incentives or other 
mechanisms. 
 
In 2000, the GRP implemented an initiative to improve 
spectrum efficiency by assigning fees according to bandwidth 
requirements.  Fees were previously levied according to the 
number of mobile stations maintained by the licensee. 
Companies have the option to use and pay for a wider 
bandwidth in order to reduce the need to build and install 
new stations.  (Note:  If the bandwidth were thin, there 
would be a need to invest in more stations to widen coverage 
for a particular service.  End Note.) 
Also, the GRP monitors the use of spectrum allocations.  The 
GRP reserves the right to recall and re-allocate unused 
channels. 
 
H.  Government Spectrum:  If not already addressed above, do 
the provisions identified above (market-based assignment 
mechanisms, secondary markets, fees) apply to the management 
of spectrum used by government agencies or other non-profit 
entities?  Please describe and identify any lessons learned. 
 
Addressed above. 
 
I.  In -Country Contacts and Studies:  Please provide 
several in-country contacts that are willing to discuss 
these issued in more detail with us.  For each of these 
contacts, supply his or her name, title, organization, 
postal address, email address, telephone and fax numbers. 
Also, please provide all publicly available spectrum studies 
of market-based economic mechanisms (such as incentives). 
 
Contacts: 
 
Edgardo V. Cabarios 
Director 
Common Carrier Department  - National Telecommunications 
Commission 
BIR Road, East Triangle, Diliman, Quezon City 
ccad@ntc.gov.ph 
Tel. 63-2-9244026 
Fax 63-2-9217128 
 
 
Precy Demition 
Spectrum Management Division - National Telecommunications 
Commission 
BIR Road, East Triangle, Diliman, Quezon City 
 
 
JONES