TDLC hears arguments on spectrum holding limits

29 May 2019

Chilean mobile industry stakeholders clashed over proposed spectrum holding limits at an Antitrust Tribunal (Tribunal de Defensa de la Libre Competencia, TDLC) hearing this week, Diario Financiero reports. Sector regulator the Department of Telecommunications (Subsecretaria de Telecomunicaciones, Subtel) has submitted plans to set a limit of 32% of the available spectrum in each of the four ‘macro bands,’ previously established by the watchdog as: ‘Low’ – consisting of the sub-1GHz band; ‘Middle-low’ – comprising the 1GHz-3GHz ranges; ‘Middle-high’ – 3.4GHz-3.8GHz; and ‘High’ – 27.5GHz-28GHz. The regulator argued that a flexible limit reflected the growing need to have more spectrum per operator, while also allowing for allocations to be divided between more providers. The latter claim was challenged by representatives from MVNOs and consumer rights organisations, however, which stated that the 32% limit would in fact concentrate the spectrum in the hands of the market’s three dominant providers – Entel, Movistar and Claro – by creating a de facto cap on the number of spectrum licence holders at three, with those players holding 96% of the useable frequencies. For its part, challenger cellco WOM suggested that the limit should be lowered to 25%, allowing four operators to utilise the maximum amount of spectrum, whilst a spokesperson for the National Corporation for Consumers and Users (Corporacion Nacional de Consumidores y Usuarios, Conadecus) indicated that the limit should allow for around six players, if at least one of them is a wholesale provider.

Defending their position, the big three made the case that, in order to ensure acceptable levels of service quality, the network operators needed access to larger amounts of spectrum than the limits proposed by their would-be competitors. Further, Movistar’s representative argued that the entry of new players into the market should not be the only consideration for spectrum limits and that the efficient use of the frequencies should also be considered.

As noted by TeleGeography’s GlobalComms Database, the current fight over spectrum limits started back in 2014 when Conadecus and others challenged the allocation of 700MHz spectrum to the lead trio of mobile network operators. The case eventually made its way to the Supreme Court, which ruled in June 2018 that the cellcos had engaged in anti-competitive practices by bidding for spectrum that would lead them to exceed the spectrum cap at the time. Both regulators and operators had ignored the previous limit set by the court in 2009 as being insufficient for cellcos’ requirements in 2014, but the watchdog had not gone through the process of officially revising the cap. As such, the operators were instructed to return spectrum equal to the amount awarded at the 2014 tender – an order which they have since challenged – while Subtel set about revising the outdated spectrum limits.