Mobile radio frequencies: Monopoly Commission prefers the auction

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An auction should remain the preferred award procedure for valuable mobile radio frequencies, recommends the Monopolies Commission in its current telecommunications sector report. “The auction process has proven itself. We suggest that the Federal Network Agency stick with it and that we reintroduce legal priority,” said the chairman of the Monopolies Commission, Jürgen Kühling, on Thursday. A limited extension with conditions could be useful.

Some of the licenses for the coveted “area frequencies” in the 800 MHz band will expire in 2025. In addition to an auction, the Federal Network Agency also considers an extension to be possible and is currently examining both options. “We are open to an auction as well as a limited and conditional extension,” said the President of the Federal Network Agency, Jochen Homann, at the presentation of the Activity report his authority on Thursday.

The network operators are campaigning for an unbureaucratic extension. You like to refer to the high investments that are necessary for the network expansion – and the role that the spectrum plays for the expansion in rural regions. However, the fourth stands in the way of the extension requests of the three network operators: The provider 1 & 1, which is preparing to set up its own network with a few frequencies auctioned in 2019, a roaming contract with Telefónica and towers from Vodafone.

Kühling therefore also warns of a “blocking effect” that an extension of the frequencies could have for the fourth network operator and newcomer to the market. The new federal government clearly calls on the chairman of the Monopolies Commission to reinstate the recently canceled preference for auctioning, which was also due to considerable pressure from network operators. The “negative auction”, which was also discussed, in which the competitors compete in a kind of “beauty contest” with expansion commitments, has not proven itself abroad.

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The Monopolies Commission nevertheless considers it sensible to extend the spectrum subject to conditions and for a limited period in order to “synchronize” the terms of the usage rights with those of other frequencies. For example, the high-range frequencies at 700, 800 and 900 MHz could be awarded together in the future. This would also set the time frame for an extension: The other usage rights in these and other bands will expire in 2033.

Should the Federal Network Agency decide on this path, it would have to ensure that the newcomer 1 & 1 has air to breathe with a few requirements for the network operator. “This frequency extension should not exist for zero,” said Kühling, bringing a service provider obligation and national roaming into play. Telefónica Deutschland, Telekom and Vodafone would be forced to leave 1 & 1 on their network or to conclude roaming agreements.

The Federal Network Agency is currently still examining all options and evaluating the completed consultation process. Homann emphasized that “the question of newcomers and fourth network operators” should always be taken into account. While industry circles speculate about a proposal before Christmas, Homann dampened expectations: “These are all open questions, the issue is not yet ready for a decision.”


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