NEWS | Wednesday, 23 July 2008

BWA licences may be revoked, MCA warns

Charlot Zahra

The Malta Communications Authority (MCA) is not excluding suspending or revoking the licences of the broadband wireless access operators (BWA) for not having rolled out their services despite being given a licence to do so three years ago.
In 2007, Vodafone Malta Limited rolled out their broadband wireless access services according to their licence obligations. However, the other two BWA licence holders, Cellcom Limited and GO Mobile, have still not started the rollout of their respective services.
Asked by Business Today whether the MCA was contemplating the removal of the assignment of the frequency spectrum to the two companies and issue another call for applications for companies interested in offering the service, an MCA spokesperson said: “Both companies have now informed the MCA that they will endeavour to comply with their rollout obligations before their next rollout coverage date.
“If either of the said companies do not demonstrate that they are complying with their rollout obligations, the MCA may consider taking other measures in line with the licence conditions which may include the suspension or revocation of the licence on the basis of serious and repeated breaches,” the MCA spokesperson warned.
Asked what concrete action the MCA is taking to ensure that the two operators abided by the conditions of their respective licences, the MCA spokesperson said: “Following public consultation last year, a regulatory decision dated 18 October 2007 was taken to establish the mechanism and quantum of administrative fines to be imposed on licensees that failed to comply with their rollout-obligations. This decision was not contested.
“On the basis of this decision, daily fines are being imposed on Cellcom Limited and Mobisle Communications Limited,” the authority’s spokesperson told Business Today. “A daily administrative fine of €127.63c has been imposed, effective as from 1 August 2007, on both companies and fines are being paid. These fines are to run until such time as MCA is satisfied that the companies have complied with their respective obligations.”
Finally, the MCA did not mince its words on its stance on the occupation of finite public frequency

for the past four years, agreeing to the situation being neither beneficial to the interest of competition nor for public coffers.
“If either company continues to fail to abide with its rollout obligation, then the MCA will actively consider suspending or revoking the licence.
“The MCA will take such measures as required by the circumstances. It should be noted that the licence requires Cellcom to provide 99 per cent coverage by April 2009 whereas in the case of GO its 99 per cent coverage rollout is due in October 2009,” she said.

The BWA saga
In October 2005, following a comparative process, the MCA issued three licences of rights of use of radio frequencies to GO Mobile, Cellcom Limited and Vodafone.
Among other things, these rights of use stipulated the rollout and coverage obligations of the BWA network operators in line with their submissions.
In early 2006, the MCA received a request from one of the BWA licensees for an extension to the rollout and coverage obligations stipulated in the original license. This request was based on the fact that certification of certain BWA technology standards had been delayed.
In April 2006, the MCA published a Statement of Proposed Decision establishing the revised timelines for the BWA roll-out.
In particular, this document sought the views of interested parties regarding this proposed revision of the rollout obligations. The consultation period ran from 21 April 2006 to 5 May 2006.
On reviewing the responses received following the consultation process, it resulted that the three licensees had taken very similar positions. Research also indicated that the BWA standard indicated by the three licensees would indeed be agreed upon in the near future.
The MCA also carried out an impact assessment of the broadband market to assess the effect that would be rendered on the sector by granting or denying an extension.
On 25 May 2006, the MCA said that it was “justifiable” and “practicable” for the rollout periods that the three authorised BWA operators had to adhere to, to be modified by a six-month extension.
In October and November 2006, the MCA received requests from two of the licensees requesting a “further significant relaxation of the rollout and coverage obligations”.
Based on these requests, the MCA felt the need to follow the process already gone through earlier in the year, and consult publicly on these requests.
The consultation period ran from 26 January 2007 to the 9 February 2007.
In determining whether to grant or refuse these requests for extension, the MCA took utmost account of the main objectives underlying the assignment process, the reasons behind the extension granted in May 2006, the responses received, as well as the technical developments that had taken place in the intervening time and those which were likely to take place subsequently.
On 30 March 2007, the MCA directed that the requests for a further extension were deemed “unjustified”. However, to make up for the lapse of time from the date the initial request for a further extension was filed to the date of publication of the decision, a 3-month extension was granted.
The final rollout and coverage obligations were therefore amended to read as follows: (see chart).
On 4 July 2007, in line with the applicable licence conditions, the MCA consulted directly with the BWA licensees, with a view to determine the testing methodology and the sanctions applicable for non-compliance with the rollout and coverage obligations. The deadline for submissions was 21 July 2007.
On 18 October 2007, the MCA issued a decision that Cellcom and GO Mobile should start paying a daily fine which is calculated on the basis of the difference between the committed coverage and the actual coverage on that day.

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