3.2.1 Sample Contents of a Detailed PSTN Licence

Sample Contents of a Detailed PSTN Licence

Notes

Part 1 – Background and Identification of Parties

• Provides background, governing law, authorization circumstances, etc.
• Important for posterity, and for courts and governments interpreting the authorization
• Ensure authorized entity has legal and financial substance
• Key to clarity of authorization conditions
• May repeat relevant definitions from laws, regulations, etc., and deal with what happens if these definitions change

Part 2 – Grant of Authorization

• Approaches may differ (e.g. authorization of services common today; however, some authorizations authorize operation of facilities)
• Radio Spectrum usually authorized separately – refer to separate authorization – ensure that there are not excessive ‘double authorization’ delays or charges.
• For precision, it is sometimes useful to define exceptions – i.e. list what licensee is not entitled to do, and/or list specify services licensee is not authorized to provide (e.g. to implement competition policy)
• It is a good practice to issue separate authorizations for each major type of services provided, e.g. an incumbent operator may obtain a PSTN authorization and separate mobile cellular and ISP authorizations. This assists in ensuring that existing and future authorizations for the same services (e.g. mobile cellular) contain similar conditions.
• The general presumption today should be against granting any monopoly or exclusivity rights. Where such rights are granted, they should be strictly limited.
• Define scope (i.e. services covered) and timing of any exclusivity rights precisely, including time limits, possible extensions and any pre-conditions for extensions
• Establish effective date of authorization. Note that an authorization may be issued several months (or even years) before the service provider is entitled to commence services. This approach may be useful when an authorization is granted in advance of the expiry of exclusive rights granted to a previous licensee.
• Specify duration of authorization term, and conditions and duration of any renewal terms

Part 3 – Authorization Fees

• Usually based on competitive bid process (auction) or fixed in advance
• Any one-time fee should be clearly differentiated from other fees (e.g. royalties, taxes, annual authorization fees, etc.)
• May be payable in installments, with revocation penalty
• Annual fee (may be paid quarterly or on another periodic basis)
• Best practice is to recover administrative costs of regulation only (see Module 1 of the Telecommunications Regulation Handbook and the section of this module on authorization fees for a calculation of authorization fees). Administrative costs should be based on a transparent and duly approved regulatory budget process
• Should be a competitively-neutral assessment of fees across the industry
• Usually provided for separately in spectrum authorization
• Best practice: Limit fees to cost recovery for spectrum management
• Higher fees may be warranted to auction scarce spectrum and generate government revenues (should not duplicate authorization acquisition fees)

Part 4 – General Conditions of Authorization

• Cite requirements to retain eligibility to hold authorization (if any)
• Cite any restrictions on ownership and control of licensee (e.g. cross-ownership with major competitors, foreign ownership restrictions, etc.)
• Rules on equipment that may be used (e.g. type approval rules, or compliance with mutual recognition agreements ‘MRAs’)
• Any applicable rules (e.g. to verify price cap regulation regime or service quality rules)
• Specify reporting requirements and rules on provision of information to the regulator
• Specific obligations to provide access by regulator to information or premises, and to co-operate with regulator for specific regulatory purposes
• Specify obligations to co-operate with other authorities (e.g. police and national security forces regarding interception of communications, environmental protection, health and safety rules if not covered by law of general application)
• Rights of service provider to access streets, sidewalks, road allowances and other public property and rights of way for the purpose of constructing, operating and maintaining facilities
• Cite legal authority for any such rights
• Include rules for access, if not stated elsewhere (e.g. payment, if any, public safety and convenience, aesthetics, compliance with applicable law)
• Any rights of service provider to access private property (e.g. rights of way for cable or microwave routes) including expropriation rights, if applicable
• Cite legal authority for any such rights

Part 5 – Specific Conditions of Authorization

• Normally dealt with in separate spectrum authorization – may be referenced in spectrum authorization
• Should be subject to national and ITU spectrum management rules, including rules for efficient spectrum use
• Assignment of numbers, if applicable
• Refer to national numbering plan, if applicable
• Rights and obligations regarding implementation of number portability arrangements
• Obligations to provide such services, and co-operate with other service providers in providing them jointly
• See Module 6 of the Telecommunications Regulation Handbook
• Specific obligations (usually set out in Appendix, including maps, number of access lines, etc.)
• See Module 6 of the Telecommunications Regulation Handbook
• Specific obligations (usually set out in Appendix, including specific indicators, standards to be met by specified dates, reporting procedures, etc.)
• May be covered or supplemented in other regulatory documents
• Reference details of performance bond or other method used to secure performance of authorization obligations
• Bond or security document(s) may be annexed to authorization

Part 6 – Relations with Customers

• Terms and conditions usually set out in other regulatory documents, but may initially be included in authorization
• May include mandatory contents of customer contracts
• May include consumer “code of rights”
• Rules on handling and recording complaints
• Usually set out in other regulatory documents
• Provisions may be set out in regulatory documents or approved customer contracts (to provide notice to customers)
• Include protection of privacy
• Rules often published in telephone directories
• Price regulation (tariff) regime usually specified (e.g. price caps)
• Specify services to which price regulation regime applies
• Review period and rules for review often specified
• Key to financial viability of authorization
• Details in appendices or referenced regulatory documents
• See Module 4 of the Telecommunications Regulation Handbook
• Method to resolve disputes over application of authorization conditions

Part 7 – Relations with Other Service providers

• See Module 3 of the Telecommunications Regulation Handbook
• May include rights and obligations to interconnect, if these are not yet set out in the general regulatory framework. May include collocation obligations.
• See Module 5 of the Telecommunications Regulation Handbook
• Include remedies and sanctions, if not specified elsewhere
• Rights and obligations regarding collocation and access to poles, towers, conduit, etc.
• See Module 3 of the Telecommunications Regulation Handbook
• Rights and obligations regarding resale by licensee and by other service providers (e.g. for payphones, Internet services, value added and simple resale)
• Method to resolve disputes with other service providers and network operators, e.g. regarding interconnection
• See Module 3 of the Telecommunications Regulation Handbook

Part 8 – Amendment, Renewal and Termination

• Unilateral modifications should only apply to certain regulatory matters, not key commercial terms of authorization
• Procedural safeguards
• Competitive neutrality should be maintained
• Provides certainty, where needed
• To provide investor certainty, key commercial terms may only be subject to amendment by agreement between licensee and regulator
• Competitive neutrality should be maintained
• Specify sanctions and penalties for failure to comply with various terms of authorization (e.g. fines, forfeiture of performance bonds, revocation)
• Include renewal rights (e.g. if certain performance targets met)
• Termination, revocation and/or suspension may be included
• Grounds (usually certain major, unresolved breaches only)
• Procedure (include due process)
• Include lesser penalties (e.g. fines) which will not disrupt service
• Clarify surviving rights of licensee, property rights, treatment of as¬sets, and other effects of non-renewal

Part 9 – General

• Excuses performance in case of specified events beyond control of licensee
• Assignment may require consent of regulator, particularly in early days of PSTN authorization. Later, restrictions on assignment are generally removed or made subject to general regulatory framework.
• Cite any rules and restrictions on assignment of authorization
• Rules and timetable for coming into full compliance with authorization (important in authorization of PTT or other incumbent service provider)