Types of Licences

There are currently two different types of licences utilised in the telecommunications market:

• Individual licences
• General authorisations (also known as Class licences)

General authorisations “permit network or service provision on the basis of a set of specific conditions (defined in advance in a general manner) without requiring an explicit decision by the regulatory authority” (Xavier,1998:4887). They are commonly provided to paging and data service providers, as well as  Internet Service Providers. General authorisations are associated with minimalist or light regulation. EU stipulates payment of fees to cover administration costs. In the UK reference is made to a class licence which does not require either a registration or licence fees.

Individual licences are limited to services dependent on using scarce resources and public voice telephony. It is commonly used for public network licences, cellular services and radio frequency usage. Conditions in individual licences are often elaborate, detailed and customised. The issuing of such a licence requires the decision of the regulatory authority, and in some countries, the minister. It has been argued that individual licences allow the regulator more discretion to formulate the operators’ conditions and to pursue or protect national interests in the face of relentless global pressures. The EU for instance has committed itself to WTO liberalization and simultaneously also permitted regulators to use the licence to uphold national interests (Xavier,1996:488).

Of the two types of licences, general authorisations are invariably cheaper to administer and conditions are easily amended, this is a critical requirement for the telecoms sector where technologies and related services change rapidly. Individual licences provide the regulator with more responsibility and contain more obligations for the prospective licensee, but enable the regulator, especially those living in developing countries, to meet pertinent national, social and economic obligations.

Variations of Use

Licences do not carry the same importance in all countries. In contrast to the United Kingdom, in Germany the licence is not used as the principal instrument of regulation; rights, restrictions and obligations are established for all applicants but formulations are less detailed and usually stated in general terms. The rest of the European Union is adopting the same pattern. In the UK and southern Africa, the license continues to bear legal status, such that the Telecommunications legislation makes it a criminal offence to operate a telecommunications system without a licence.  In Northern America, the licence is used mainly for the provision of the frequency spectrum.

(Note : The legal aspects of licensing are covered in TR509.)