Key Benefits:
The Autorité de régulation des communications électronique et des postes,
Considering Directive No. 2002/21/EC of the European Parliament and the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services;
Considering Directive No. 2002/20/EC of the European Parliament and the Council of 7 March 2002 on the authorization of electronic communications networks and services;
Considering the general code of public ownership;
Considering the post and electronic communications code, including articles L. 36-5 and L. 41 to L. 42-3;
Having regard to Act No. 92-1476 of 31 December 1992, Corrigendum Financial Law for 1992, including its Article 83;
In view of the application by the Director General of Corporate Management, received on February 26, 2006;
After deliberating on 20 March 2007,
On the general framework:
Under Article 13 of Directive No. 2002/20/EC of 7 March 2002 on the authorization of electronic communications networks and services ("Authorization"), Member States may allow the competent authority to submit to a royalty the rights of use of radio frequencies, in order to take into account the need to ensure the optimal use of these resources. Member States ensure that these royalties are objectively justified, transparent, non-discriminatory and proportionate in view of the use to which they are intended.
Article L. 41-1 of the Post and Electronic Communications Code provides that the use of radio frequencies available in the territory of the Republic by licensees is a mode of private occupation of the public domain.
In this context, the State is able to collect royalties of two distinct natures:
- a management fee to cover costs incurred by the administration for the management of radio frequencies;
- a fee for the use of radio frequencies owed by licensees for the use of frequencies.
Thus, the draft decrees submitted for advice to the Authority are intended, on the one hand, to recover the costs incurred by the administration for the management of radio frequencies and, on the other hand, to establish an effective valuation of the spectrum, especially based on the benefits provided to the user.
On the draft decree in the Council of State establishing a management fee to cover the costs exposed by the administration for the management of radio frequencies:
Section 1 of this draft decree provides that operators and users who hold a frequency usage authorization are subject to an annual management fee to cover the costs incurred by the administration for the management of the spectrum and the granting of frequency usage permits.
The Authority wishes to recall that this management fee is analyzed as a paid service fee. However, when it comes to establishing a debit to cover the courses at the service rendered by the administration, the legal framework of public finances imposes the adoption of a decree in the Council of State.
In fact, Organic Law No. 2001-692 of 1 August 2001 on the Financial Laws states in Article 4 that "the remuneration of the services rendered by the State may be established and collected on the basis of decrees in the Council of State taken on the report of the Minister for Finance and the minister concerned. These decrees become null and void in the absence of ratification in the next year's finance law."
The Authority is concerned that Article 2 of this draft decree in the Council of State refers to a simple decree the determination of the methods of calculating the annual royalty of management and that the main provisions relating to this royalty - apart from the determination of the value of the coefficients of calculating the amount of it - are not explicitly repeated in this draft decree in the Council of State in order to comply with the provisions of the aforementioned organic law.
On the draft decree on royalties for the use of radio frequencies due by licensees for the use of frequencies issued by the Authority for the regulation of electronic communications and posts:
The Authority recalls that, pursuant to Article L. 41-1 of the Post and Electronic Communications Code, fees for the provision of frequencies due by licensees for the use of frequencies are royalties for the occupation of the public domain.
Section 13 of the above-mentioned Directive 2002/20/EC ("Authorization") provides that such a fee may be put in place "in order to take into account the need to ensure optimal use of the spectrum".
In addition, the law of public domaniality recognizes that the expensive nature of the private occupation can be justified in view of the need to value the domain and in view of the fact that private use deprives the access of other users to the public domain in proportion.
The pricing of the royalty is based on the principle of the valuation of the benefit withdrawn by the private occupant. For this purpose, section L. 2125-3 of the General Code of Public Ownership provides that "the royalty due to the occupation or use of the public domain shall take into account the benefits of any nature granted to the holder of the authorization". The procedure for calculating the amounts of royalties available to the public as set out in this draft decree shall take into account the benefits withdrawn by the operator or user who has a licence to use frequencies.
With regard to the provisions of the draft decree, the Authority questions, first of all, the title of the decree which includes the terms " royalties for the use of radio frequencies".
In light of the above observations on the need to refer the methods of calculating the management fee to a decree in the Council of State, the Authority considers it more appropriate than the terms: "the royalties for the use of radio frequencies" in the title of the draft decree are replaced by the words: "the royalties for the provision of radio frequencies".
On Article 5:
The AMF notes that Article 6 of the draft decree provides that, for an allotment of the fixed service of local radio loop, the annual amount of the royalty of making available is based on a coefficient c, equal to the relation between the surface covered by the allotment and the total surface of the metropolitan territory. For reasons of consistency, the Autorité suggests that this coefficient be also mentioned in the calculation of the annual amount of the royalty made available for an allotment of the fixed point-to-point service, defined in Article 5. The Authority suggests an amendment to Article 5 in this sense.
On Article 6:
In addition, the third paragraph of Article 6 of the draft decree provides that, for an allotment of the fixed local radio loop service out of metropolis, the annual amount of the royalty available is set at 23 euros per MHz. The AMF considers that in order to avoid distortions in spectrum pricing, a consistency should be made between the scale for a reduction of the fixed local radio loop service outside the metropolis and the scale for a reduction in fixed point-to-point service outside the metropolis as defined in Article 5.
On Article 9:
The Authority notes that Article 9 of the draft decree provides that the Authority shall determine the amount of the royalty of disposition for the authorizations of use of frequencies that would not fall within the provisions of draft articles 5 to 8 (fixed point-to-point service, fixed radio loop service, fixed and mobile satellite service, mobile network service). The Authority would like this amount to be specified, after consultation with the Ministry of Budget, in the authorization for the use of frequencies in accordance with the provisions of Article L. 42-1 of the Post and Electronic Communications Code and suggests an amendment to that effect in this draft article.
On Article 10:
The Autorité notes that section 10 of the draft decree provides that the amounts of the royalties of state-of-the-art fixed service provision, fixed and mobile satellite services, and the mobile service of independent networks are adjusted according to inflation and are therefore updated annually as of January 1 according to the annual variation of the consumer price index (including tobacco) calculated for the previous year.
The Autorité notes that the principle of indexing can be justified by the need to update the economic valuation of frequencies. However, the Autorité questions the legality of the index set out in article 10 of the draft decree. Indeed, under article L. 112-1 of the monetary and financial code, a general price index can never be used as an index to a monetary index, except for food pensions and life annuities.
On Article 11:
The Autorité notes that Article 11 of the draft decree provides for the exemption of the payment of the royalty of the provision for only three types of services:
- emergency medical services of public hospitals;
- fire and rescue services;
- the publishers of radio services referred to in the fourteenth paragraph of Article 29 of Act No. 86-1067 amended of 30 September 1986 on freedom of communication, i.e. the services published by an association and carrying out a social communication mission of proximity, understood as promoting exchanges between social and cultural groups, the expression of different sociocultural currents, support for local development, protection of the environment
The Autorité notes with satisfaction the limited character of this exemption in accordance with the objectives of fairness, effective management and spectrum enhancement.
On Article 14:
The first paragraph of section 14 of the draft Order provides that the annual royalties for the current year shall be payable before January 31 or on the date of availability of the frequency in respect of a new assignment.
This provision is the result of section L. 2125-4 of the general code of public property that expressly provides that the royalty due to the occupation or use of the public domain by the recipient of an authorization is payable in advance and annually.
The AMF wishes to emphasize that this mechanism, consisting of making the billing as soon as notification of the decision to allocate frequencies, may, on the one hand, pose significant difficulties of application and, on the other, result in a considerable increase in administrative and accounting constraints for the services of the AMF, but also for operators using a significant number of frequencies. In fact, the AMF conducted almost 12,000 new assignments for the fixed point-to-point service and fixed satellite service for the year 2006 and nearly 5,200 deletions of frequency assignments. Similarly, the AMF has made more than 200 decisions for mobile terrestrial networks, representing more than 1,800 networks created, almost 1,600 renewed and 600 modified.
As a result, the Authority draws the attention of the Government to the interest that would be attached to the consideration of legislative developments in order to maintain the principle of calculating the amounts due for the current year as at 31 December of each year.
The fourth paragraph of Article 14 of the draft Order provides that the period of due diligence shall begin at the date of notification to the holder of the decision to assign frequencies and shall end at the effective end of the provision made by the holder of the authorization.
The Authority notes that the effective end of the provision is not the subject of a finding by the licensee and the administration. Accordingly, it considers that it would be more appropriate to specify that the period of due diligence ends at the end of the decision to grant permission to use frequencies or, where appropriate, at the date on which the Authority notifies the decision to repeal the decision to grant permission to use frequencies.
The second paragraph of section 14 of the draft decree states that the amount of royalties for the use of radio frequencies is calculated pro rata temporis to the number of days.
The third paragraph of Article 14 of the draft decree states that the amount of the royalty of the disposition is due for a minimum of seven days and the amount of the management fee for a minimum of four months.
The Authority takes note that the amount of the royalty of disposition is due for a minimum of seven days, even if the licensee uses the frequencies for a period less than those seven days, and the amount of the management fee is due for a minimum of four months, even if the licensee uses the frequencies for a period less than four months.
On Article 15:
The AMF notes that this article gives the president of the AMF the quality of the recorder of all royalties, with the exception of those relating to the authorizations for the use of frequencies by assigning less than 470 MHz out of the open networks to the public, for which the Director General of the National Frequency Agency is ordering.
However, the Authority considers it necessary that, with respect to the IMT 2000 frequencies royalties due by third generation mobile network establishment and operation holders, the derogation that had been introduced by Decree No. 2001-882 of 26 September 2001 amending the decree of 3 February 1993 that expressly referred to the Minister of Economy, Finance and Industry as the "networker" of royalties »
On Article 16:
The Authority notes that this Decree comes into force on 1 January 2008, except for fees due to fixed service point-to-point other than those due by audio-visual communication service publishers within the meaning of Act No. 86-1067, amended on 30 September 1986, on freedom of communication.
On Article 17:
The Autorité takes note that the royalties calculated for 2007 and due for fixed point-to-point service other than those due by the publishers of audiovisual communication services within the meaning of Act No. 86-1067 amended of 30 September 1986 on freedom of communication are payable one month after the publication of this decree.
The Autorité notes that the fees due for 2008 are due as at 30 June 2008.
On the draft decree implementing the decree relating to the royalties of use of radio frequencies due by the licensees of the use of frequencies issued by the Autorité de régulation des communications électronique et des postes:
The Autorité takes note of this draft decree and has no observations to be made on the provisions of it.
The Authority wishes to draw the attention of the Government to the fact that section 8 of Act No. 2006-1771 of 30 December 2006 of Corrigendum Finance for 2006 provides a provision for royalties relating to the point-to-point connection establishment of the fixed service that is valid only for a transitional period from 25 March 2006 to 31 March 2007.
Accordingly, the Autorité considers it desirable that the three regulatory texts submitted for advice to the Autorité be published as soon as possible.
Subject to the comments set out above and the editorial amendments made in the annex (which have not taken into account the numbering changes induced by the transfer of the provisions relating to the management royalty in the draft decree in the Council of State), the Autorité issues a favourable opinion on the draft decrees and the draft decree.
This notice and attached editorial proposals will be forwarded to the Minister Delegate to the Industry and published in the Official Journal of the French Republic.
Done in Paris, 20 March 2007.
A N N E X E À L'AVIS N° 2007-0231
RELATING TO THE USE OF RADIO-ELECTRICAL FREQUENCES BY THE AUTHORIZATION OF FREQUENCES AGAINST THE AUTHORITY OF ELECTRONIC COMMUNICATIONS AND POSTS
You can see the table in the OJ
n° 250 of 27/10/2007 text number 91
The president,
P. Champsaur
