Supreme Court orders trio to return spectrum

27 Jun 2018

Chile’s Supreme Court has ruled in favour of consumer rights group the National Corporation of Consumers and Users (Corporacion Nacional de Consumidores y Usuarios, Conadecus), upholding its complaint that Movistar, Claro and Entel had engaged in anti-competitive practices in the process of bidding for 700MHz spectrum in 2014. The resolution found that the trio had not respected the 60MHz cap on spectrum holdings and requires them to return the amount of spectrum that they won via the tender (2×10MHz for Movistar and Claro, 2×15MHz for Entel), in any band of their choosing. The Department of Telecommunications (Subsecretaria de Telecomunicaciones, Subtel) was ordered to ensure ‘timely compliance’ with the ruling and adopt necessary measures to carry it out. Finally, if Subtel wishes to review the spectrum cap, it must do so through a consultation process with anti-monopoly watchdog the Antitrust Tribunal (Tribunal de Defensa de la Libre Competencia, TDLC).

The apex court overturned a previous ruling from the TDLC which had rejected Conadecus’ complaint in July 2015. Explaining its position, the Supreme Court highlighted that the all players concerned had ignored the 60MHz spectrum cap in bidding for airwaves and, as such, were violating the law by hoarding excess frequencies. If the sectoral authorities had deemed the 60MHz limit insufficient for the changing needs of the market, the court added, those agencies should have altered or removed the cap via the existing regulatory framework prior to the auction. Further, the defendants were fully aware of the limitation – having been part of the process that had established the cap – but chose not to comply with the rule, either via limiting their bidding or by returning spectrum in other bands.

Addressing the decisions made by the various authorities involved in the case, the Supreme Court rejected the opinion that the requirements of hoarding behaviour had not met because there is no one to exclude as ‘erroneous reasoning’, noting: ‘The circumstance that no other competitor submitted offers to the 700MHz contest is due, precisely, to the fact that operating a market without limits on radioelectric spectrum holdings makes it even more difficult for new participants to enter’.