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Government announces spectrum policy framework

The Government today (April 24) announced the policy framework for the management of radio spectrum in Hong Kong, after taking into consideration the views collected during a public consultation exercise.

The policy framework covers six areas, namely spectrum policy objectives; guiding principles in spectrum management; spectrum rights; spectrum supply (including spectrum trading and liberalisation); spectrum for government services and spectrum pricing.

Among the spectrum policy objectives, a new objective is to strengthen Hong Kong's strategic position as a world city and the gateway between the Mainland and the world. This is considered particularly important in the light of increasing economic integration between Hong Kong and the Mainland.

The framework also sets out clearly the guiding principle in spectrum management that a market-based approach should be used for spectrum when there are likely to be competing demands from providers of non-government services. If there are overriding public policy reasons requiring a departure from this guiding principle, the relevant public policy reasons will be published for transparency.

To provide certainty to spectrum assignees, the framework states that before a spectrum assignment expires, the Telecommunications Authority (TA) will normally invoke his powers under the Telecommunications Ordinance (Cap 106) to vary or withdraw any spectrum assigned only in exceptional circumstances, including where the public interest or international obligations of the Government so require, there is a serious breach of spectrum assignment conditions or serious interference between legitimate spectrum users has to be resolved or minimised. The TA may set out minimum notice periods for different types of spectrum assignments, which he will give as far as practicable to the affected spectrum assignees. Upon the expiry of a spectrum assignment, if the TA intends to vary that assignment or not to renew that assignment, the TA will, as far as practicable, also give minimum notice periods.

To provide more information to the industry on the potential supply of spectrum to the market, the TA will publish spectrum release plans showing the potential supply of spectrum through an open, competitive bidding or tendering process in the following three years. Such plans will be updated every year on a rolling basis or as necessary.

The framework makes clear the policy intention that spectrum trading should be introduced in Hong Kong in the long term, subject to a feasibility study on the implementation issues. However, because of doubtful benefit in Hong Kong's circumstances, spectrum liberalisation will not be introduced in the short term.

While spectrum for government services will continue to be managed administratively, the TA will review the efficiency of the use of those spectrum every three years.

Since spectrum is a scarce public resource, the framework establishes the principle that spectrum utilisation fee (SUF) should be applicable to all non-government use of spectrum. Where spectrum is not released through market means, the SUF should be set to reflect the opportunity costs of the spectrum. However, if spectrum is assigned to support public interest purposes, the SUF may be adjusted accordingly.

The Deputy Secretary for Commerce, Industry and Technology (Communications and Technology), Mrs Marion Lai, said that the policy framework would provide the communications industry with greater clarity and predictability of spectrum management decisions, and provide policy guidance for the regulator in making regulatory decision.

"The framework will be reviewed and updated from time to time to reflect the latest technological, market and societal developments in Hong Kong and internationally, as well as further deliberations in key issues related to spectrum policy and management.

"To allow time to align the existing spectrum management arrangements with the new policy framework, in the interim, the TA would continue to discharge his spectrum management responsibilities under the TO with a mix of the existing command and control approach and the new market-based approach," Mrs Lai said.

The spectrum policy framework is available at the website of the Commerce, Industry and Technology Bureau (www.citb.gov.hk/ctb) and Office of the Telecommunications Authority (www.ofta.gov.hk)