Chapter 5 translations
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For any resource, including radio spectrum, the primary economic objective is to maximize the net benefits to society that can be generated from that resource such that there is an efficient distribution of resources resulting in maximum benefits to society. Prices are used as an important mechanism to ensure the spectrum resources are used efficiently by users.
The broad goals and objectives associated with spectrum pricing are:
- Covering the costs of spectrum management activity borne by the spectrum management authority or regulators;
- Ensuring the efficient use of the spectrum management resource by ensuring sufficient incentives are in place;
- Maximizing the economic benefits to the country obtained from use of the spectrum resource;
- Ensuring that users benefiting from the use of the spectrum resource pay for the cost of using spectrum;
- Providing revenue to the government or to the spectrum regulator.
Spectrum pricing refers to a range of spectrum management activities and tools including administrative fees, spectrum usage, and spectrum prices determined by way of market mechanisms. Developing spectrum pricing strategies invariably involves alignment with the government’s and regulator’s revenue goals and objectives, setting targets, and discussion with key stakeholders such as the Ministry of Finance and key sector groups – telecommunications service providers. Revenue targets and strategies relate directly back to the primary objectives; spectrum users pay for spectrum use, covering management costs, spectrum efficiency, and achieving economic and social development goals.