ICRIER releases a report on the implications of Satellite Spectrum Assignments through auctions
New Delhi, 23 August 2023: The Indian Council for Research on International Economic Relations (ICRIER) launched a working paper, supported by the Broadband India Forum (BIF), aimed at charting a course for spectrum assignment in India’s satellite communication sector. The paper, authored by ICRIER and Prof Rekha Jain, scrutinizes the implications of Satellite Spectrum Assignments through auctions and underscores the failure of auctions in achieving vital spectrum management and regulatory objectives.
Importantly, the authors emphasize that satellite spectrum is a shared resource, and existing empirical and practical models of assignment through auctions are scant. Instead, the authors advocate for an administrative assignment of space-based communication spectrum on a shared basis, in line with international best practices.
Satellite communication is vital to achieve Digital India’s goals of extensive broadband penetration and improved satellite TV services. Unlike the exclusive allocation framework governing mobile and broadcast terrestrial services, satellite spectrum calls for a uniquely tailored spectrum assignment strategy that maximizes its utility as it is shared.
Speaking on this, Prof. Rekha Jain, Senior Visiting Professor, ICRIER, said, “While exclusive auctions have their merits, the interplay of flexibility, innovation, and equitable public access inherent to shared assignments can substantially contribute to a more inclusive and harmonious spectrum landscape. This report can serve as a guiding light for policymakers and stakeholders, offering insights that have the potential to recalibrate the trajectory of India’s space communication sector.”
Mr. TV Ramachandran, President, BIF, stated, “As highlighted by the experts, the auctioning of satellite spectrum could result in an overly challenging scenario for industry participants, making it exceedingly difficult to access the spectrum or manage the burden of high auction prices. Such an outcome would significantly compromise consumer interests and the overall well-being of the sector. Notably, it is imperative to recognize that the unanimous sentiment among our space startups, satellite/broadcast operators, and service providers stands firmly against the notion of satellite spectrum auctions.”
The paper suggests that exclusive assignments through auction, when applied to space-based communication, fall short in effectively achieving spectrum management objectives. It advocates for a departure from these conventional methods and suggests the adoption of prioritization and coordination mechanisms for spectrum sharing within the framework of ITU Radio Regulations, but adapted to the domestic context. This would not only offer regulatory certainty but also be instrumental in achieving universal coverage, facilitating satellite sector growth, enhancing the global competitiveness of Indian telecom companies, and preserving and enhancing content diversity and plurality, vital for a robust democracy.
Some key criteria presented for the evaluation of assignment of satellite spectrum with respect to policy objectives include:
- Effective Utilization by Service Providers: Exclusive assignment through auctions lead to fragmented spectrum, with each service provider being assigned a part of the entire available bandwidth, resulting in lower data rates and inefficient use.
- Facilitating Competition: Allowing limited players through auction to limits access to a few players, creates artificial scarcity, and creates barriers to entry for smaller players.
- Fair and Transparent Assignment Process: As long as assignments are done in an open manner through a prior announced mechanism, a transparent and fair mechanism can be implemented.
- Harmonization with Best International Practices: Harmonization of space-based spectrum has international dimensions and therefore, any adoption instrument must be in line with other countries. If satellite service providers do not have the same spectrum bands or bandwidth they have in other countries, then it would be difficult for them to provide services.
- Maximal Productive Use of Spectrum: Fragmentation harms spectrum management efficiency, leaving underutilized portions, conflicting with DoT/TRAI’s goal of efficient public resource management.
- Helping the Satellite Sector to Take Off: Satellite services are useful for a variety of economic activities. Inconsistent spectrum assignment mechanisms will deter global satellite providers from entering Indian markets. Companies seek regulatory certainty, which exclusive assignments and auction mechanism is unlikely to provide.
- Enabling Indian Telecom Companies to be Globally Competitive: The New Spacecom Policy, Digital India, and NDCP 2018 foresee a vibrant, competitive telecom sector and a growing satellite segment. However, auctioning spectrum for space-based communication is likely to see dampening in the fledgling satellite sector in India as the policy and regulatory framework would likely see a delay and poor private sector participation.