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France’s telecoms regulator ARCEP has revealed details of its proposed allocation plans for the freed-up 700 MHz band, which will see 2×30 MHz of spectrum offered to mobile operators to enable them to keep pace with increases in consumption, with the Government deeming it vital that they be allocated new frequency bands, and particularly bands in the lower frequencies whose propagation properties are especially well suited to the task.
This band will be freed up progressively across the country, between April 2016 and June 2019. A bill on ‘the second digital dividend, and ongoing upgrades to digital terrestrial television’ is currently being debated in Parliament, and will entrench the process in law.
As a result, based on the priorities set by the ministers responsible for digital affairs, and in accordance with the regulatory objectives assigned to it by law, ARCEP is responsible for proposing the allocation methods for these frequencies and the terms and conditions under which mobile operators can use them. The procedure is then set in motion by the ministers. ARCEP is responsible for putting this procedure into place, and for allocating frequencies to operators.
ARCEP has submitted its draft decisions on the future assignment and allocation of the 700 MHz band to the members of the Electronic communications advisory committee, CCCE (commission consultative des communications électroniques) for their opinion.
These draft decisions are the result of a year of preparatory work carried out in tandem with market stakeholders and the ministers responsible for digital affairs. They are a follow-up to the ‘Strategic review of spectrum for superfast mobile (Revue stratégique du spectre pour le très haut débit mobile) that was submitted for consultation last December.
Once it has received the CCCE opinion, ARCEP plans on adopting its final proposal in early July, so that the ministers responsible for digital affairs can issue the call for applications later in the month.
The ministers responsible for digital affairs have set several priorities in terms of monetising intangible State assets, regional development, investment and the preservation of fair and effective competition.
As concerns the monetisation of intangible State assets, ARCEP has worked with the ministers to establish a procedure that takes the form of a multiple round ascending auction. The auction will begin with a reserve price, set by the ministers, of €416 million for a block of 2×5 MHz, or €2.5 billion for the entire band.
In accordance with a request made by the ministers and Parliament during recent parliamentary debates (on a bill on growth and business, a bill on the second digital dividend and ongoing upgrades to digital terrestrial television, and on the work being done by the High Commission for public postal and electronic communications services (Commission supérieure du service public des postes et des communications électroniques), the procedure takes utmost account of digital regional development priorities.
The procedure therefore includes coverage obligations that are as strong as those attached to the 800 MHz band. There are particularly strong demands for deployment of the 700 MHz band in rural areas, in addition to 800 MHz band frequencies, to be able to improve the quality of 4G services in these areas over time and to prepare for the potential development of 5G services on these bands.
In addition, the call for applications includes new obligations aimed at improving mobile data availability on-board everyday trains (TER, RER, Transilien). These obligations will be completed by a more detailed quality of service audit for all railway lines (including TGV high-speed trains) and underground lines, to encourage operators to increase the quality of service they provide.
The procedure is also meant to stimulate investment, by enabling every player to achieve a fair share of the mobile market. The band was therefore divided into six blocks of 2×5 MHz, so that spectrum can be allocated to a large number of candidates. These blocks can be combined to allow the candidates to provide their customers with the highest connection speeds possible. However, to encourage heavy use of this frequency band and to limit imbalances between operators, a single candidate cannot acquire more than three blocks (i.e. 2×15 MHz) in the 700 MHz band, and will not be able to exceed a limit of 2×30 MHz of low frequency spectrum, i.e. in the 700 MHz, 800 MHz and 900 MHz bands combined. Lastly, the type of auction being planned allows the candidates to fully manage the outcome: they can choose to continue or to stop their bidding at any point in time, knowing how much spectrum they will be allocated.
Once the call for applications has been launched, candidates will have until the end of Q3 2015 to file their applications. ARCEP plans to conduct the auction in the fourth quarter of the year, and to award the licences to the winning candidates before the end of 2015.