different business.<sup>67</sup> This can limit the extent to which the spectrum rights may be reconfigured (e.g., divided on geographical basis) or given a different use (e.g., fixed wireless).

- Industrial policies to build up domestic manufacture of telecommunications equipment may require reserving parts of the spectrum for specific technologies or limiting what parts of the spectrum may be used to provide given services. The potential benefits of indigenous industrial development are traded off against possibly inefficient use of the spectrum in the longer run.

- Tradable spectrum rights may make it difficult to change the boundaries between administration, rights, and commons approaches to spectrum management. Such changes are likely to be necessary from time to time.<sup>68</sup> There is an inevitable tension between retaining authority to reclaim spectrum and creating uncertainty for users.

# **3.3 Scope of Application**

Whether a country is capable of addressing effectively the potential limitations of spectrum trade and liberalization discussed above is a matter to be assessed case by case. Table 3.1 summarizes these limitations and suggests which ones are in principle within the reach of country authorities or the industry to address. Pre-eminent in this class are the risks of anti-competitive behavior and increased interference. In principle these fall within the province of sectoral and general competition authorities. But the ability to mitigate these risks and deal with related problems when they materialize is likely to be the main regulatory concern when introducing the tradable spectrum rights approach. Also, conflicts with broader public policy can, in principle, be addressed with other government agencies or by escalating the issues to higher levels of government.

The powerful arguments in favor of spectrum trade and liberalization apply to all uses across the radio spectrum. But in practice the limitations discussed above mean that this approach is better suited to some spectrum uses than others. Decisions on which parts of the spectrum can be opened to trade or liberalized must be based on the analysis of the conditions prevailing in the particular country. Table 3.2 suggests a format for reviewing country conditions.<sup>69</sup> For illustration, the last column summarizes the conclusions reached by one major regional study comprising developed as well as middle-income developing economies. The broad finding in this case is that spectrum trade and liberalization are likely to be applicable mainly to broadcasting, fixed terrestrial links and access networks, mobile services, and satellite communication. In a more limited way, they may also provide incentives for more efficient use of spectrum reserved to special users groups, especially military and other government uses.

> 67For example, Telstra in Australia is closing its CDMA operations, and a mobile virtual network operator attached to it is debating what to do next. It is important to ensure that changes in spectrum holdings do not hurt customers, especially if the new spectrum owners do not provide the same services as the older spectrum owner. 68For example, in Guatemala the regulatory authority has had difficulty buying back spectrum rights bands now needed for unlicensed use in keeping with new international recommendations to enable development of wireless broadband service using WiFi and WiMax technologies.

> 69The blank columns on risks and limitations reflect the view that these can only be assessed meaningfully in individual country situations. There are few generic answers that can be applied across the board. The last column summarizes the result of the analysis done in Europe, including transition economies that recently joined the EU.

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