OFTA: Statement on Spectrum Fees

Spectrum and licence fees are supposed to cover the administrative costs of the studies and monitoring required to plan and manage the relevant part of the spectrum, and the amount of frequency that is used, because the more frequency used the greater the problems of monitoring and managing interference. In addition a variable factor is built-in to encourage the use of higher frequencies in order to reduce the crowding at lower frequencies.

The issue of efficiency involves both technical efficiency, in using spectrum in a way that avoids mutual interference between users, and economic efficiency, in using spectrum as a scarce resource in a way that brings the greatest social gain. For reasons which are spelt later in the statement, market mechanisms may not ensure that some public goods, such as emergency services, are adequately provided with spectrum. On the other hand, charging for the use of spectrum makes it likely to be used in less wasteful ways.

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