PARIS (WiMAX Day). Following the auction of 3.5 GHz spectrum in France last year, the Ministry of Economics, Finance and Industry announced in August 2006 that it would permit the transfer and re-sale of licensed WiMAX spectrum on “secondary markets.” As was reported previously, this is in line with European Commission directives concerning the transfer of utilisation rights of radio frequencies.

On Monday this week, French telecommunications regulator Arcep announced that it approved the first two transfers of WiMAX spectrum. The transfers in question were from one local authority to another, and from France Telecom to its subsidiary SPM Telecom in Pierre Saint and Miquelon (a French territory in the North Atlantic between Newfoundland and Nova Scotia).

These first, albeit minor, transfers are significant in France as they both point to the successful functionality of the “secondary market” for spectrum in France.

Many in France questioned the legality of such transfers, and Arcep appointed Christine Maugüe, Conseiller of State, to supply a legal opinion on these transfers, and she noted:

“The transfer and the provision of authorisations of use of frequencies are not subject to rules of publicity and competition that govern the deliberations and actions of local authorities…. For the same authorisation of use of frequencies, a local authority can invoke the mechanisms of transfer and provision, for the benefit of public, other communities or private operators…. A local authority that resorts to a public market, or a delegation of public utility of WiMAX services, does not necessarily have to be the titular license holder for an authorization of use of frequencies which permits their exploitation.”

An active secondary market
With the necessary legal provisions and precedents now in place for the development of the secondary market for WiMAX spectrum in France, observers believe that several license holders are keen to trade their rights to larger network operators.

In its announcement, Arcep emphasised that “the introduction of the secondary market for the frequencies will allow a better use of the spectrum. It underlines the will of the authorities to reinforce the role of the market in the distribution of the authorisations of frequencies.”

It is also believed that several companies have already begun negotiations for the sale or transfer of significant portions of their spectrum, and the announcement this week was merely a formality by Arcep to set the stage for the announcement of much larger spectrum transfers in the near future.

Some observers believe that by the end of 2007, less than half of the companies and local authorities that were originally awarded licenses in France for 3.5 GHz spectrum will actually retain their rights, or at least will transfer partial rights.