HK Cap. 106AC — Telecommunications (Determining Spectrum Utilization Fees by Auction) Regulation

Telecommunications (Determining Spectrum Utilization Fees by Auction) Regulation ( Cap. 106, section 32I ) (Enacting provision omitted— E.R. 2 of 2012 ) [4 July 2008] (Format changes— E.R. 2 of 2012 ) 1. (Omitted as spent— E.R. 2 of 2012 ) 2. Interpretation In this Regulation, unless the context otherwise requires— base station ( 基地電台 ) means a transmitting and receiving station built on land for the provision of mobile telecommunications services; ( L.N. 62 of 2010 ) bid ( 出價 ) includes an intention to bid specified in a written application to the Authority; bidder ( 競投人 ) includes a person who has, by written application to the Authority, expressed an intention to bid; eligible bidder ( 合資格競投人 ), in relation to the use of spectrum, means a bidder that— (a) has been determined under section 11(b) to be qualified to participate in an auction to be held under section 5 ; and (b) has not been determined under section 11(b) to be disqualified from participating in the auction; relevant period ( 有關期間 ) means a period after which the Authority may not, according to the specified terms, accept written applications for the use of spectrum; specified terms ( 指明條款 ) means the terms and conditions specified under section 11(c) ; spectrum cap ( 頻譜上限 ) means the maximum amount of spectrum specified by the Authority in the specified terms that may be assigned to a person or a group of persons who are connected bidders within the meaning of the specified terms. 3. Method for determining spectrum utilization fee (1A) The fixed fee referred to in section 2(2)(a) of the Telecommunications (Level of Spectrum Utilization Fees) (Second Generation Mobile Services) Regulation ( Cap. 106 sub. leg. AA ) for the spectrum which falls within the frequency bands set out in Part 2A of the Schedule to the Telecommunications (Designation of Frequency Bands subject to Payment of Spectrum Utilization Fee) Order ( Cap. 106 sub. leg. Y ) shall be determined by an auction or a series of auctions to be held in accordance with this Regulation and the specified terms. ( L.N. 22 of 2009 ) (1) Subject to subsections (1AAG), (1AAH), (1AAI), (1AAK) and (1AAL), the spectrum utilization fee for the use of the spectrum which falls within the frequency bands set out in Part 4 , 4A or 5 of the Schedule to the Telecommunications (Designation of Frequency Bands subject to Payment of Spectrum Utilization Fee) Order ( Cap. 106 sub. leg. Y ) shall be determined by an auction or a series of auctions to be held in accordance with this Regulation and the specified terms. ( L.N. 22 of 2009 ; L.N. 161 of 2012 ; L.N. 59 of 2021 ; L.N. 52 of 2024 ; L.N. 67 of 2025 ) (1AA) Subject to subsection (1AAJ) and section 3A , the spectrum utilization fee for the use of the spectrum that falls within the frequency bands set out in Part 6 of the Schedule to the Telecommunications (Designation of Frequency Bands subject to Payment of Spectrum Utilization Fee) Order ( Cap. 106 sub. leg. Y ) must be determined by an auction or a series of auctions to be held in accordance with this Regulation and the specified terms. ( L.N. 62 of 2010 ; L.N. 59 of 2021 ; L.N. 52 of 2024 ) (1AAB) The spectrum utilization fee for the use of the spectrum that falls within the frequency bands set out in Schedule 1 for the period beginning on 22 October 2016 and ending on 21 October 2031 must be determined by an auction or a series of auctions to be held in accordance with this Regulation and the specified terms. ( L.N. 59 of 2014 ; L.N. 105 of 2018 ) (1AAC) The spectrum utilization fee for the use of the remaining spectrum for the period beginning on 22 October 2016 and ending on 21 October 2031 must be determined by an auction or a series of auctions to be held in accordance with this Regulation and the specified terms. ( L.N. 59 of 2014 ) (1AAD) Subject to section 3C , the spectrum utilization fee for the use of the spectrum that falls within the frequency bands set out in Schedule 2 for the period beginning on 12 January 2021 and ending on 11 January 2036 must be determined by an auction or a series of auctions to be held in accordance with this Regulation and the specified terms. ( L.N. 105 of 2018 ) (1AAE) Subject to sections 3B and 3C , the spectrum utilization fee for the use of the spectrum that falls within the frequency bands set out in Schedule 3 for the period beginning on 30 September 2021 and ending on 29 September 2036 must be determined by an auction or a series of auctions to be held in accordance with this Regulation and the specified terms. ( L.N. 105 of 2018 ) (1AAF) Subject to section 3C , the spectrum utilization fee for the use of the remaining spectrum for the period beginning on 30 September 2021 and ending on 29 September 2036 must be determined by an auction or a series of auctions to be held in accordance with this Regulation and the specified terms. ( L.N. 105 of 2018 ) (1AAG) If the spectrum falls within the frequency bands set out in Schedule 4 , subsection (1) only applies in relation to the use of the spectrum on or before 30 March 2024. ( L.N. 59 of 2021 ) (1AAH) If the spectrum falls within the frequency band 678–686 MHz, subsection (1) only applies in relation to the use of the spectrum on or before 2 July 2021. ( L.N. 59 of 2021 ) (1AAI) If the spectrum falls within the frequency band 2300–2390 MHz, subsection (1) only applies in relation to the use of the spectrum on or before 29 March 2027. ( L.N. 52 of 2024 ) (1AAJ) If the spectrum falls within— (a) the frequency bands 832.5–837.5 MHz and 877.5–882.5 MHz; or (b) the frequency bands 885–890 MHz and 930–935 MHz, subsection (1AA) only applies in relation to the use of the spectrum on or before 31 May 2026. ( L.N. 52 of 2024 ) (1AAK) If the spectrum falls within the frequency bands 2515–2535 MHz and 2635–2655 MHz, subsection (1) only applies in relation to the use of the spectrum on or before 31 May 2028. ( L.N. 67 of 2025 ) (1AAL) If the spectrum falls within the frequency bands 2535–2540 MHz and 2655–2660 MHz— (a) subsection (1) only applies in relation to the use of the spectrum on or before 20 May 2028; and (b) despite section 3 of the Telecommunications (Method for Determining Spectrum Utilization Fee) (Spectrum for Auction) Regulation ( Cap. 106 sub. leg. AG ), the spectrum utilization fee for the use of the spectrum during the period from 21 May 2028 to 31 May 2028 (both dates inclusive) is $622,376. ( L.N. 67 of 2025 ) (2) An auction or a series of auctions to determine the spectrum utilization fee for the use of spectrum may be held in relation to different frequency bands, and the provisions of this Regulation shall have effect accordingly. ( L.N. 62 of 2010 ) (3) In this section— remaining spectrum ( 剩餘頻譜 )— (a) for the purposes of subsection (1AAC), means any spectrum that— (i) falls within the frequency bands set out in the Schedule to the Telecommunications (Method for Determining Spectrum Utilization Fee) (Administratively Assigned Spectrum in the 1.9–2.2 GHz Band) Regulation ( Cap. 106 sub. leg. AD ); and (ii) is not assigned to any existing assignee as defined by section 2(3) of that Regulation because the Authority’s offer to assign the spectrum as described in section 2 of that Regulation has not been accepted; (b) for the purposes of subsection (1AAF), means any spectrum that— (i) falls within the frequency bands set out in the Schedule to the Telecommunications (Method for Determining Spectrum Utilization Fee) (Administratively Assigned Spectrum in the 1800 MHz Band) Regulation; and (ii) is not assigned to any existing assignee as defined by section 2 of that Regulation because the Authority’s offer to assign the spectrum as described in section 3(a) of that Regulation has not been accepted. ( L.N. 105 of 2018 ) ( E.R. 1 of 2015 ) 3A. When spectrum utilization fee referred to in section 3(1AA) is not payable (1A) This section only applies in relation to the use of spectrum on or before 31 May 2026. ( L.N. 52 of 2024 ) (1) No spectrum utilization fee is payable for the use of the spectrum that falls within the frequency bands 885–890 MHz and 930–935 MHz if the user of the spectrum is authorized by the Authority to use the spectrum through a base station located in a designated area for the sole purpose of providing mobile telecommunications services within a designated area. (2) No spectrum utilization fee is payable for the use of the spectrum that falls within the frequency bands 885–889 MHz and 930–934 MHz if the user of the spectrum is authorized by the Authority to use the spectrum for the sole purpose of communication and control in relation to the operation of cross-border railways between Hong Kong and any place outside Hong Kong. (3) The Authority may specify an area to be a designated area for the purposes of subsection (1). (4) The Authority must publish the details of the specification of the designated area in the Gazette. ( L.N. 62 of 2010 ) 3B. When spectrum utilization fee referred to in section 3(1AAE) is not payable (1) No spectrum utilization fee is payable for the use of the spectrum that falls within the frequency bands 1780.1–1784.9 MHz and 1875.1–1879.9 MHz if the user of the spectrum is authorized by the Authority to use the spectrum through a base station located in a designated area for the sole purpose of providing mobile telecommunications services within the designated area. (2) The Authority may specify an area to be a designated area for the purposes of subsection (1). (3) The Authority must publish the details of the specification of the designated area in the Gazette. ( L.N. 105 of 2018 ) 3C. Payment of spectrum utilization fee determined under section 3(1AAD) , (1AAE) or (1AAF) (1) The spectrum utilization fee determined under section 3(1AAD) , (1AAE) or (1AAF) must be paid— (a) in a lump sum; or (b) annually in 15 instalments in accordance with subsection (2). (2) For subsection (1)(b), the spectrum utilization fee for each instalment is as follows— (a) for the first instalment—an amount equal to the lump sum referred to in subsection (1)(a) divided by 15; (b) for each subsequent instalment—an amount equal to the spectrum utilization fee payable in the immediately preceding instalment increased by 2.5%. (3) The spectrum utilization fee is payable at the time and in the way required by the Authority. ( L.N. 105 of 2018 ) 4. Division of frequency bands (1) The Authority may further divide the frequency bands for the purpose of an auction held under this Regulation. ( L.N. 22 of 2009 ; L.N. 62 of 2010 ) (2) Any division of frequency bands under subsection (1) shall be specified in the specified terms. 5. Spectrum utilization fee payable if there is more than one eligible bidder (1) If, on the expiration of the relevant period, there is more than one eligible bidder for the use of spectrum, an auction is to be held to determine the spectrum utilization fee for the use of spectrum. (2) Only an eligible bidder for the use of spectrum may participate in an auction. (3) In an auction, the amount of a bid shall not be less than the minimum amount of the spectrum utilization fee specified under section 10 . (4) Subject to subsection (5), section 7 and section 9 , the bidder who makes the highest bid for a particular frequency band in an auction is the successful bidder for the use of that frequency band, and the amount of that highest bid is the amount of the spectrum utilization fee payable by the bidder for the use of that frequency band. (5) If, before a particular frequency band is assigned to the bidder with the highest bid for that frequency band in an auction, the Authority determines, under section 11(b) , that the bidder is disqualified from participating in the auction, the bidder shall cease to be the successful bidder for the use of that frequency band and that highest bid shall not be taken as the spectrum utilization fee payable for the use of that frequency band. 6. Spectrum utilization fee payable if there is only one eligible bidder (1) This section applies if there is only one eligible bidder— (a) on the expiration of the relevant period; or (b) immediately before the start of an auction to determine the spectrum utilization fee for the use of spectrum. (2) No auction is to be held to determine the spectrum utilization fee for the use of spectrum. (3) Subject to subsection (4), the only eligible bidder is the successful bidder for the use of the frequency band it selects, and the minimum amount of the spectrum utilization fee specified under section 10 is the amount of the spectrum utilization fee payable by the bidder for the use of that frequency band. (4) If, before that frequency band is assigned to the only eligible bidder, the Authority determines, under section 11(b) , that the bidder would be disqualified from participating in an auction to determine the spectrum utilization fee, subsection (3) is taken to have never operated in relation to that frequency band. 7. Power to remove connected bidders Where 2 or more successful bidders are connected bidders (as defined in the specified terms) and the total amount of spectrum for which such bidders are successful bidders exceeds the spectrum cap, the Authority may, in accordance with the specified terms— (a) require such bidders to make necessary arrangement so that such bidders cease to be connected within the meaning of the specified terms; (b) require such bidders to reach an agreement as to which of the bids of such bidders shall be withdrawn so that the total amount of spectrum assigned to the bidder or bidders who made the remaining bids, as may be appropriate, does not exceed the spectrum cap; (c) determine by drawing lot or by any other method of random selection as to which of such bidders shall be the remaining successful bidder or the remaining successful bidders, as may be appropriate, to the effect that the total amount of spectrum assigned to such remaining successful bidder or bidders does not exceed the spectrum cap; (d) conduct an auction for such bidders in which— (i) the amount of a bid shall not be less than the minimum amount of the spectrum utilization fee specified under section 10 ; (ii) subject to section 9 , the bidder whose bid produces the highest spectrum utilization fee by virtue of section 8 shall be the remaining successful bidder whilst the other bidder or bidders shall cease to be a successful bidder or successful bidders, as may be appropriate; or (e) determine, by means of any combination of 2 or more of any of the means specified in paragraph (a), (b), (c), or (d), whether in whole or in part, as to which of such bidders shall be the remaining successful bidder or the remaining successful bidders, as may be appropriate, so that the total amount of spectrum assigned to such remaining successful bidder or bidders does not exceed the spectrum cap. 8. Spectrum utilization fee includes bids in auction under section 7(d) The amount of a bid made by a bidder in an auction held under section 7(d) shall be added to, and form part of, the spectrum utilization fee payable by the bidder on the use of the frequency band concerned. 9. Resolution of tied bids When two or more bids offered in an auction held under section 5(4) or 7(d) are of the same amount, the Authority may determine, in accordance with the specified terms, which of the bids concerned shall prevail over other bid or bids, as may be appropriate. 10. Secretary may specify minimum amount of spectrum utilization fee The Secretary may specify the minimum amount of the spectrum utilization fee for the purposes of sections 5(3) , 6(3) and 7(d) — (a) by notice published in the Gazette or in any other manner; and (b) by means of— (i) a minimum fixed fee; (ii) a minimum fee determined by reference to a formula or percentage or the occurrence of an event or series of events; (iii) a series of 2 or more minimum fees in relation to the same spectrum utilization fee where the relevant minimum fee is determined by reference to the occurrence of an event or series of events; (iv) a minimum fee the determination of which varies upon the occurrence of an event or series of events; (v) a minimum fee determined by reference to another minimum fee, or by reference to the means of determining another minimum fee, whether or not the other minimum fee is or will become payable; (vi) a minimum fee the determination of which varies with, or is calculated by reference to, the period of validity of a licence or any part thereof; or ( E.R. 1 of 2019 ) (vii) any combination of 2 or more of any of the means specified in subparagraph (i), (ii), (iii), (iv), (v) or (vi), whether in whole or in part. 11. Authority may hold, etc. auction and specify terms and conditions of auction The Authority may— (a) promote, hold, conduct, suspend, cancel or conclude an auction or a series of auctions to determine the spectrum utilization fee for the use of spectrum; (b) without limiting the generality of paragraph (a), determine whether a bidder is qualified to participate, or is disqualified from participating, in an auction; and (c) by notice published in the Gazette, specify the terms and conditions of an auction (including the terms and conditions relating to the payment of the spectrum utilization fee). Schedule 1 [ s. 3 ] Frequency Bands MHz MHz 1920.3–1925.3 2110.3–2115.3 1925.3–1930.2 2115.3–2120.2 1930.2–1935.1 2120.2–2125.1 1960.0–1964.9 2150.0–2154.9 1964.9–1969.8 2154.9–2159.8 ( Schedule added L.N. 59 of 2014 . Amended L.N. 105 of 2018 ) Schedule 2 [ s. 3 ] Frequency Bands MHz MHz 890–895 935–940 895–900 940–945 900–905 945–950 905–910 950–955 910–915 955–960 ( Schedule 2 added L.N. 105 of 2018 ) Schedule 3 [ s. 3 ] Frequency Bands MHz MHz 1710–1720 1805–1815 1730–1740 1825–1835 1770–1780 1865–1875 1780–1785 1875–1880 ( Schedule 3 added L.N. 105 of 2018 ) Schedule 4 [ s. 3 ] Frequency Bands MHz 2500–2515 2540–2570 2620–2635 2660–2690 ( Schedule 4 added L.N. 59 of 2021 )