Report ITU-R SM.2012-7 (06/2025) - Economic approaches to spectrum
management
Foreword
Policy on Intellectual Property Right (IPR)
TABLE OF CONTENTS
CHAPTER 1
     1.1 Need for spectrum economic approach
     1.2 Requirements for national spectrum management
     1.3 Goals and objectives
          1.3.1 Radiocommunications law
          1.3.2 National allocation tables
     1.4 Structure and coordination
     1.5 Functional responsibilities
          1.5.1 Spectrum management policy and planning/allocation of spectrum
          1.5.2 Frequency assignment and licensing
          1.5.3 International cooperation
          1.5.4 Liaison and consultation
          1.5.5 Spectrum engineering support
          1.5.6 Computer support
     1.6 Performance of spectrum management functions
CHAPTER 2
     2.1 Background
     2.2 Basic principles for financing national spectrum management
          2.2.1 Legal principles
          2.2.2 Economic principles
          2.2.3 Reality principles
          2.2.4 Approaches by different administrations
               2.2.4.1 Traditional national budget financing
               2.2.4.2 Spectrum use fees
               2.2.4.3 Auctions
          2.2.5 Advantages and disadvantages of these approaches
     2.3 Economic approaches used to promote efficient national spectrum management
          2.3.1 Spectrum assignment methods
               2.3.1.1 Non-market-based assignment approaches: comparative processes and lotteries
               2.3.1.2 Market-based assignment approach: auctions
          2.3.2 Transferable and flexible spectrum rights
          2.3.3 Advantages and disadvantages of auctions and transferable spectrum rights
          2.3.4 Licence fees
               2.3.4.1 Fees based on spectrum management costs
                    2.3.4.1.1 Direct costs
                    2.3.4.1.2 Indirect costs
               2.3.4.2 Fees based on user’s gross income
               2.3.4.3 Incentive fees
               2.3.4.4 Opportunity cost fees
               2.3.4.5 Fee calculation examples
          2.3.5 Advantages and disadvantages of fee approaches
               2.3.5.1 Fees based on spectrum management costs
               2.3.5.2 Fees based on user’s gross income
               2.3.5.3 Incentive fee formulas
               2.3.5.4 Opportunity cost fee formulas
     2.4 Factors that could affect various economic approaches
          2.4.1 Auctions
               2.4.1.1 Applicability of auctions
               2.4.1.2 Pre-auction requirements
               2.4.1.3 Competition policy
          2.4.2 Transferable property rights
          2.4.3 Licence fees
     2.5 Managing a change in spectrum management funding
          2.5.1 Legal
          2.5.2 International obligations
          2.5.3 Funding implications
     2.6 Summary
CHAPTER 3
     3.1 Background
     3.2 Methods of assessing the spectrum’s economic benefits
          3.2.1 GDP and employment
               3.2.1.1 Factors modifying the combined GDP and employment values
          3.2.2 Consumer and producer surplus
          3.2.3 The link between economic and social benefits
          3.2.4 Comparison of the methods for quantifying economic benefits
               3.2.4.1 Advantages and disadvantages of the GDP method
               3.2.4.2 Advantages and disadvantages of consumer and producer surplus method
     3.3 Potential uses for economic assessment
          3.3.1 Applications for funding spectrum management activities
          3.3.2 National frequency assignment decisions
          3.3.3 Changes in spectrum management national legislation
          3.3.4 Support to the spectrum manager on the operation of auctions
          3.3.5 Using economic assessment to monitor economic performance over time
     3.4 Factors affecting benefits
          3.4.1 Frequency availability
               3.4.1.1 Suitability
          3.4.2 Demand
          3.4.3 The country’s geography
               3.4.3.1 Regional variations and spectrum congestion
          3.4.4 Variation from country to country
               3.4.4.1 Frequency allocation
               3.4.4.2 Regulatory approach and planning criteria
          3.4.5 Factors which may be taken into account in an international comparison of fee levels
               3.4.5.1 Grounds for fees and their economic impact
               3.4.5.2 Economic conditions surrounding licensed operations
     3.5 Summary
CHAPTER 4
     4.1 Formula development
     4.2 Guidelines for the establishment of administrative fees (or administrative charges)
          4.2.1 Observations and general approaches
          4.2.2 Rule for the allocation of administrative costs – Example 1
          4.2.3 Rule for the allocation of administrative costs – Example 2
     4.3 Guidelines for the establishment of spectrum fees
          4.3.1 Defining the goals of the spectrum fees
               4.3.1.1 Observations and general approaches
               4.3.1.2 Budgetary objective of the authorities
               4.3.1.3 Spectrum fees for frequencies intended for user’s own requirements
          4.3.2 Demand assessment for the spectrum
          4.3.3 Cost assessment for the spectrum
          4.3.4 Choosing the fees approach
          4.3.5 Determining the fees
     4.4 Examples of formulas for fee calculation
          4.4.1 Notations and definitions of coefficients
          4.4.2 Fee applied to a point-to-point fixed-service assignment
          4.4.3 Fee applied to a point-to-point fixed-service allotment
          4.4.4 Fee applied to a wireless local loop allotment in the fixed service
          4.4.5 Fee applied to an assignment to an earth station in the fixed or mobile-satellite service
          4.4.6 Fee applied to an allotment in the fixed or mobile-satellite service
          4.4.7 Fee applied to an assignment for private networks in the mobile service
          4.4.8 Practical example of fee calculation formula from the Republic of Colombia
     4.5 Spectrum fees for frequencies used in the provision or marketing of services intended for a consumer market
          4.5.1 Observations and general approaches
          4.5.2 Example of fees applied to the 2G mobile service
          4.5.3 Example of fees applied to the 3G mobile service
          4.5.4 Another example of fees applied to the fixed wireless local loop service
          4.5.5 Example of fees applied to a television programme producer
     4.6 An analytical model for calculating license fees on the basis of specified incentives that are designed to promote efficient spectrum use
          4.6.1 General purpose of the model
          4.6.2 Steps in the model formulation
          4.6.3 General principles for the model development
          4.6.4 Expenditures and income of a state concerning spectrum management
          4.6.5 Determination of the used spectral resource value
          4.6.6 Determination of a time resource used by an emission
          4.6.7 Determination of a territorial resource used by an emission
          4.6.8 Determination of a frequency resource used by an emission
          4.6.9 Determination of weighting coefficients
          4.6.10 Determination of the whole value of the used spectral resource
          4.6.11 Price for the qualified unit of the used spectral resource
          4.6.12 Annual fees for particular frequency assignment
     4.7 Procedures and examples of used spectral resource calculations in application to different radio services
          4.7.1 VHF/UHF sound and TV radio broadcasting calculation procedures
          4.7.2 Example of calculations
          4.7.3 LF-HF sound broadcasting
          4.7.4 Mobile radio services
               4.7.4.1 Land mobile radio service
               4.7.4.2 Example of calculations
          4.7.5 Maritime mobile radio service
               4.7.5.1 Example of calculations
          4.7.6 Aeronautical mobile, radionavigation and radiolocation services
          4.7.7 Examples of calculations
               4.7.7.1 Aeronautical radio communications
               4.7.7.2 Primary radars
               4.7.7.3 Fixed radio services
               4.7.7.4 Example of calculations
          4.7.8 Earth stations of satellite communications
               4.7.8.1 Calculation procedures
               4.7.8.2 Examples of calculations
                    4.7.8.2.1 Transmitting earth station
                    4.7.8.2.2 Receiving earth station
     4.8 Opportunity cost and administrative incentive pricing : simple, functional and linear equations
          4.8.1 The pricing formula and parameters
          4.8.2 Higher RF – lower fees, for all services
          4.8.3 The values of F for all type of services
               4.8.3.1 Fees for all applications operating below 6 000 MHz
               4.8.3.2 Fees for all applications operating above 6000 MHz
          4.8.4 Examples to calculate fees per MHz
               4.8.4.1 Fees per MHz for Internet Service Providers operating at 2 600 MHz
               4.8.4.2 Calculating PtP fees operating nationwide
          4.8.5 The factors non-included in the formulae
     4.9 Guidelines on applying new fees system
CHAPTER 5
     5.1 Experience with auctions and transferable property rights
          5.1.1 Australia
               5.1.1.1 Making use of price as a tool in assigning licences
               5.1.1.2 Introducing a new form of licensing: the spectrum licence
          5.1.2 Canada
          5.1.3 The Russian Federation’s experience with auctions
          5.1.4 New Zealand
          5.1.5 United States of America
               5.1.5.1 Authority
               5.1.5.2 Personal communications services
               5.1.5.3 Interactive video data service
               5.1.5.4 Specialized mobile radio service
               5.1.5.5 Multichannel multipoint distribution system
               5.1.5.6 Direct broadcast satellite
               5.1.5.7 Satellite digital audio radio
               5.1.5.8 Wireless communications
          5.1.6 India
     5.2 Experience with fees
          5.2.1 Australia’s experience with licence fees
          5.2.2 Canada’s experience with licence fees
          5.2.3 China’s experience with licence fees
          5.2.4 Germany’s experience with spectrum usage fees
               5.2.4.1 Frequency assignment and frequency assignment fees
               5.2.4.2 Frequency usage contribution charges
               5.2.4.3 Current procedure for calculation of frequency assignment fees and frequency usage contribution charges
               5.2.4.4 Calculation of frequency assignment fees
               5.2.4.5 Calculation of frequency usage contribution charges
          5.2.5 Israel’s experience with licence fees
          5.2.6 Experience of the Kyrgyz Republic on application of licence fees
               5.2.6.1 Expenditures and income of the State on spectrum management
               5.2.6.2 Determination of the value of the radio spectrum
               5.2.6.3 Price for the unit of the frequency resource used
               5.2.6.4 Annual fees for a particular frequency assignment
               5.2.6.5 Application of the method
               5.2.6.6 Funding the monitoring system
          5.2.7 The Russian Federation’s experience with spectrum fees
               5.2.7.1 General provisions
               5.2.7.2 Calculation of one-time payment
               5.2.7.3 Calculation of annual fee
               5.7.2.4 Calculation of coefficient depending on the number of used radio frequencies (radio channels)
               5.7.2.5 Calculation of coefficient depending on the technology used in the radio spectrum
          5.2.8 The United Kingdom’s experience with licence fees
          5.2.9 United States of America’s experience with licence fees
               5.2.9.1 Policy and rulemaking
               5.2.9.2 Enforcement
               5.2.9.3 Public information services
          5.2.10 Brazil’s experience with spectrum fees
          5.2.11 Experience with spectrum usage fees – Republic of Korea
          5.2.12  Indonesia’s experience with spectrum fees
          5.2.13 Colombia’s procedure for determining the occupation level in a specific geographic area for point-to-point links
          5.2.14 India’s experience with Spectrum Auction Payments
     5.3 Experience using alternative resources
          5.3.1 Canada
               5.3.1.1 Consultation process
               5.3.1.2 Frequency coordination process
               5.3.1.3 Information dissemination
          5.3.2 Germany
          5.3.3 Israel
          5.3.4 Russian Federation
          5.3.5 United States of America
               5.3.5.1 Use of interested communications groups
               5.3.5.2 United States of America use of frequency coordinators
               5.3.5.3 United States of America use of spectrum management consultants
          5.3.6 China’s experience with alternative resources
     5.4 Other experiences
          5.4.1 Amateur services
          5.4.2 Area and high density systems
          5.4.3 Space services, orbital use and spectrum fees
Annex 1
     1 Spectrum fees regulations of the United Arab Emirates
     2 Fees policy of Cote D’Ivoire
     I. SPECIAL EQUIPMENTS.
     II. LICENCE FEES/CERTIFICATE
     III. EXAM FEES FOR THE ISSUE OF OPERATOR’S CERTIFICATE
     IV. FEES FOR THE ISSUANCE OF AUTHORIZATIONS
     V. TAX FOR INTERVENING IN THE NETWORKS
     VI. LABELLING