THE GIBRALTAR REGULATORY AUTHORITY 6 LIBERALISATION 7

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2 CONTENTS Page CEO s STATEMENT 3 - Organisation and Staffing 3 - The Telecommunications Ordinance Requirement for an Independent Regulatory Authority 4 CONTENTS THE GIBRALTAR REGULATORY AUTHORITY 6 LIBERALISATION 7 REPORT ON ACTIVITIES 9 - Regulation of Telecommunications Services and Equipment 9 - Spectrum Management 9 - Advisory and Planning Services 9 REGULATING THE INDUSTRY 10 - Universal Service Obligations 10 - Competitive Safeguards 10 - Public Policy issues 11 - Interconnection 11 - Calling Line Identification 12 - Payphones 12 - Additional Regulatory Safeguards on Dominant Operators 12 - Enforcement of Fair Competition Conditions 13 - Fixed Services 13 - Mobile Services 16 - Paging 16 - Internet 17 - Tariff Rebalancing 17 - Accounting Separation 18 - Numbering Plan 18 SPECTRUM MANAGEMENT 19 - International Framework 19 - The Global Level 19 - The European Level 19 - Gibraltar Spectrum Management 20 - Licensing of the Electromagnetic Spectrum 20 - Maritime 21 - Ship Station Licences 21 - Radio Amateurs and CB Radio 21 - Dealers 22 - Private Mobile Radio (PMR) 22 - Port Operations 22 - VSAT 22 - SRD (LAN) 22 - Accounting Authorities 22 - Interference and Inspection 23 - Enforcement 23 - UK Administration 23 - Training and Development 23 WORK PROGRAMME FOR

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4 CEO s STATEMENT This is the first Annual Report prepared by the Gibraltar Regulatory Authority since its establishment under the Gibraltar Regulatory Authority Ordinance, which came into effect on 12 th October Pursuant to Section 3(3) of the Ordinance, I was appointed Chief Executive Officer of the Authority for a period of three years with effect from 13 th November This report is prepared in accordance with Section 12. (1) of The Gibraltar Regulatory Authority Ordinance. The first few months were devoted to the recruitment of staff, the process of establishing the office and preparing for the commencement of the legislation which would liberalise the telecommunications industry in Gibraltar. Organisation & Staffing CEO s STATEMENT The Authority has a total staff of six, five based in Gibraltar and one in the United Kingdom as set out below. CHIEF EXECUTIVE OFFICER TECHNICAL MANAGER INTERNATIONAL FREQUENCY CO-ORDINATOR REGULATORY OFFICER OFFICE ADMINISTRATOR PERSONAL SECRETARY/ASSISTANT The International Frequency Co-ordinator is based in the United Kingdom and his main responsibility is the technical co-ordination of frequencies planned for use by satellite companies established in Gibraltar. The Telecommunications Ordinance 2000 The Telecommunications Ordinance 2000, which was commenced on 19 th of July 2001, represented the arrival of full liberalisation of the telecommunications industry in Gibraltar. The effects of liberalisation will be felt over the coming months as new players come in to the market, quality improves and the prices of many services fall in real terms. On-line services, notably via the Internet, will see continued growth, as companies compete with each other to offer new service packages and new pricing formulae. These developments will be crucial if Gibraltar is to be able to participate fully in the Information Society. Telecoms liberalisation is the cornerstone of Europe s transition, lowering the price of communicating, and encouraging innovation and investment in new services and networks. But the transition in Europe from a monopoly world to a fully competitive one has not been easy. In Gibraltar, liberalisation gives rise to two specific concerns. 3

5 CEO s STATEMENT First and foremost, the continued refusal by Spain to recognise Gibraltar s IDD code (350) coupled with the European Commission s continued failure to address this problem as requested by the two complaints filed with it by Gibtel and GNC in 1996, means that the availability of numbers, the essential raw material, remains seriously circumscribed in Gibraltar. It is difficult to see how effective competition will be achieved when numbers are not available for new entrants to the market. Secondly, a great effort has been made to implement the EC liberalisation measures in Gibraltar. It now remains to be seen the extent to which a market the size of Gibraltar s can bear full competition without undermining the provision of essential facilities and services. This is a matter to which the GRA intends to pay close attention in the forthcoming years. Requirement for an Independent Regulatory Authority The Services Directive (Directive 90/388/EEC) required Member States to establish Regulatory Authorities and ensure that they were independent of the telecommunications organisations. To reinforce this independence, the Competitive Environment Directive (Directive 97/51/EC) introduced two new provisions, one requiring Regulatory Authorities to be legally distinct from, and functionally independent of, all organisations providing telecommunications networks, equipment or services; and a second, ensuring the effective separation of regulatory activities from activities related to ownership or control of a telecommunications organisation where these functions are retained by the Member State. The Commission clarified the meaning of 'effective structural separation of the regulatory function from activities associated with ownership or control' along the following lines: "The aim of effective structural separation can be achieved in a number of ways depending on the legal and administrative traditions in a Member State. Possible mechanisms could include placing the regulatory and operational activities in separate ministries, or placing the regulatory activities with an independent regulatory agency, or having both activities in one ministry, with appropriate safeguards which guarantee the effectiveness of the separation. That means the emphasis is on the effectiveness of the separation, not its form. In order to ensure effective separation, Member States must, in particular, ensure that: regulatory decisions are not influenced by ownership considerations, commercially sensitive information gained by the regulatory body in the course of its supervision of the market is not passed over to the body which acts as shareholder or owner of the operator, where it could be used to gain competitive advantage for a State-owned or State-controlled operator, specia l safeguards are enforced for any transfer of staff from the regulatory body to the body which acts as shareholder or owner of the operator, and from the latter to the regulatory body, the two activities of regulation and supervision/ownership have separate financial accounting, personnel management and reporting structures, no members of staff in either body face a conflict of interest between meeting government objectives as shareholder/owner, and government objectives or obligations as regulator. 4

6 The above safeguards must be reflected in the constitution and the actual behaviour of the regulatory body". These requirements are met in Gibraltar through the provisions of the Gibraltar Regulatory Authority Ordinance and the Telecommunications Ordinance and Regulations. There is a specific provision in the Gibraltar Regulatory Authority Ordinance which requires the Authority, when the application of European Community obligations or the provisions of an Ordinance, or both, require that a function be exercised with complete or a degree of independence, then the Authority may only take into account the policy of the Government to the extent that it is lawful to do so. Member States are required to assign regulatory functions to an independent body (or bodies). These functions include: assign radio frequencies, CEO s STATEMENT intervene to resolve disputes between operators and/or service providers, regulate interconnection, ensure that unlawful restrictions are not placed on the use of any access to the public telecommunications network, duties in relation to licensing, control type approval and other mandatory specifications, and be responsible for the national numbering plan. Member States are free to choose the funding arrangements for the regulatory authority; it can, for instance, be funded through a levy on the operators, though this should not give them influence, e.g. a seat on the management board. A system of levies on operators is the one chosen by the Government in Gibraltar. Paul J Canessa Chief Executive Officer 5

7 GIBRALTAR REGULATORY AUTHORITY Liberalisation of Telecommunications in Europe has led to the imposition of new rules, transposed from EU Directives, Regulations and Recommendations into Gibraltar law in line with other European Member States. As a result of this The Gibraltar Regulatory Authority ( GRA ) was set-up in October 2000 as the National Regulatory Authority for Telecommunications in Gibraltar. The Telecommunications Ordinance and accompanying Regulations came into effect on the 19 th July GIBRALTAR REGULATORY AUTHORITY The Telecommunications Ordinance provides for the assignment or conferring of functions to the Minister for Telecommunications and the Gibraltar Regulatory Authority. Their role is to make new provision of telecommunications services and the establishment or operation or both of telecommunications networks. The Ordinance substituted Part II of the Public Utility Undertakings Ordinance and the Wireless Telegraphy Ordinance. The new Telecommunications Ordinance transposed into Gibraltar law Council Directive 90/387/EEC (Open Network Provision framework ) as amended by 97/51/EC (Open Network Provision in a competitive environment) of the European Parliament and the Council, together with Commission Directive 90/388/EEC (Competition in Services) as amended by Directive 94/46/EC (relating to liberalisation of satellite communications and equipment), Directive 95/51/EC (abolition of restrictions on the use of cable television networks for the provision of telecommunications services) and Directive 96/19/EC (implementation of full competition in telecommunications markets) and Directive 92/44/EC (Open Network Provision Leased Lines Directive ) as amended by Directive 97/51/EC (Open Network Provision in a competitive environment), Decision 98/80/EC (amending Annex II of Directive 92/44/EC), Directive 97/13/EC (framework for General Authorisations and Individual licences), Directive 97/33/EC as amended by Directive 98/61/EC ( Universal Service obligations on Interconnection in Open Network Provision), Directive 98/10/EC ( Voice Telephony Directive ) and Decision No. 128/1999/EC of the European Parliament and of the Council of 14 December 1998 on the coordinated introduction of a third-generation mobile and wireless communications system (UMTS) in the Community. Since the Telecommunications Ordinance came into force, the Gibraltar Regulatory Authority has been very involved in the opening up of the telecommunications market to competition in accordance with the law. Gibraltar has a good telecommunications infrastructure utilising fibre optic cable to transmit calls and data. This is vital for Gibraltar since its success as a leading business and financial centre is based on its ability to communicate effectively with the rest of the world. The demands made on the GRA change as the market and technologies develop, altering the regulatory process. The human and financial resources of the GRA, and its structure, require periodic adjustment to respond to these changes. The final role of the GRA is likely to be as a specialist competition authority, possibly with a wider remit of functions relating to the communications sector. 6

8 Licensing is one of the major roles of the GRA, it provides access to scarce resources, imposes rights and obligations on operators and protects as well as promotes consumer interests. Licensing of operators must be non-discriminatory unless justified, transparent and objective, based on impartial, objective criteria. The extent of obligations should reflect the need and no more, to impose such obligation. The GRA operates in an open manner and decisions are subject to appeal processes. The present telecommunication industry comprises the following as at 31 March 2002 one fixed-line operator one mobile service operator two value added service providers, offering data communication and Internet access etc. GIBRALTAR REGULATORY AUTHORITY 7

9 LIBERALISATION The GRA s policy on liberalisation of the telecommunications sector is to encourage the competitive provision of telecommunications services. Competition is viewed as a mechanism which fosters economic and efficient supply of services and which disciplines suppliers behaviour such that prices to consumers are fair and reasonable. Key features of the current policy framework are as follows Commercial control of the telecommunications industry the GRA s role is to create and maintain a fair operating environment conducive to investment in the telecommunications infrastructure and services for Gibraltar. Regulatory approach the GRA allows market forces to work as far as possible and the GRA as the regulator of the industry intervenes only when necessary to protect public interest and to ensure that competition is achieved by regulating the incumbent. LIBERALISATION Pro-competition the GRA aims to encourage an environment which creates opportunity for entry by new suppliers so that the telecommunications services can be provided in the most economically efficient manner possible and procuring investment for Gibraltar. Pro-consumer the GRA believes that the widest possible range of services should be available to the community at reasonable cost. The stage of liberalisation that we find ourselves in today means that the GRA has much work to do. It is striving to achieve the many objectives that the EU has set whilst striking a balance that will work well for Gibraltar both locally and internationally. The GRA endeavours to ensure compliance with the legislation and its interpretation thereof. 8

10 REPORT ON ACTIVITIES REPORT ON ACTIVITES The GRA, established under the Gibraltar Regulatory Authority Ordinance 2000, is the statutory body responsible for overseeing the regulation of the telecommunications sector in Gibraltar under the Telecommunications Ordinance 2000 and accompanying Regulations. The Gibraltar Regulatory Authority is responsible for the following: Regulation of Telecommunications Services and Equipment Promotion of the development of a fair and competitive operating environment for the telecommunications industry in Gibraltar; Advising the Minister for Telecommunications, who is the licensing authority, on licence applications for public telecommunications services; Ensuring compliance with licence conditions; Administration of the telecommunications numbering plan; Resolution of interconnection disputes between operators of competing networks and services; Approval and co-ordination of radiocommunication equipment; Setting of standards for telecommunications services and equipment; Regulation and co-ordination of satellite activities; Ensuring compliance with EU Law. Spectrum Management Management and assignment of radio frequencies; Issue and administration of telecommunications (radio) licences; Investigation of interference complaints; Monitoring of radiation levels of telecommunications equipment. Advisory and Planning Services Provision of advisory and planning services on telecommunications matters; Regulation of telecommunications equipment suppliers; Co-ordination of telecommunications infrastructures. REPORT ON ACTIVITIES 9

11 REGULATING THE INDUSTRY Universal Service Obligations GNC as the incumbent, dominant operator in Gibraltar has been determined as the Universal Service provider for Gibraltar. This means that GNC has an obligation under the Telecommunications Ordinance to provide services which at present other operators would not have a duty to provide, these obligations include serving uneconomic customers who would otherwise not be served on commercial grounds, special services for disabled persons, access to emergency services, provision of operator assistance and directory services. Universal Service is defined in the Voice Telephony Directive as: a defined minimum set of services of specified quality which is available to all users independent of their geographical location and, in the light of specific national conditions, at an affordable price. In the future, other operators may be designated as having Universal Service obligations. Article 4 of the Voice Telephony Directive states that Member States may set up universal service funding schemes for shared financing of services. However, the GRA has determined that the benefits to the incumbent of providing Universal Service at present outweigh the cost and shall be issuing a Notice to the incumbent later on in the year. The major benefits include, brand enhancement and commercial reputation, payphones, marketing and branding, customer information and benefits of ubiquity. Competitive Safeguards REGULATING THE INDUSTRY Competitive safeguards have been incorporated into Gibraltar legislation to ensure that new market entrants wishing to provide telecommunication services do so on a level competitive playing field. A competitive market cannot be created without regulatory intervention, since limited resources need to be allocated independently in a competitive market. The GRA is under a duty to ensure that the dominant operator behaves so that they do not abuse their market power. Incumbency carries advantages such as established customer base, numbers, critical mass, and information about the market. Competition Law prohibits anti-competitive agreements between businesses such as cartels and abuse of dominance, such as predatory pricing and undue discrimination between own downstream business and competitors. New competitors need to be given the chance to compete with the incumbent. The benefits of competition are improved efficiency, reduction of prices to services, rapid innovation, and customer choice as operators respond to consumer needs and strong market growth. Operators will be forced to become more efficient and provide better services. Major safeguards include; - interconnection, - reducing barriers to entry, - restrictions on dominant operator, - pricing and price controls, - ensuring no unfair cross subsidy of services, - preventing unfair use of information, - pre-emptive announcements, - and fair competitive provisions. 10

12 Public Policy Issues Government has responsibility for deciding policy whereas the GRA s role is to implement policy and apply established regulatory and competition principles, and has autonomy from Government. The credibility of the regulatory framework depends on the stability and consistency of the relationship between policy implementation and on the consistency of regulatory decisions. Public policy issues in telecoms include; - Gibraltar s economic objectives (inward investment, local entrepreneurship, and domestic supplier interests) - Universal access/service - Efficient use of natural and scare resources (e.g. electromagnetic spectrum, numbers and rights of way) - Defence and security - Government s Policy - The extent to which a market the size of Gibraltar s can bear full competition without undermining the provision of essential facilities and services Interconnection A pre-requisite for new operators wishing to provide services whilst rolling out their own networks is to interconnect with the existing network of the incumbent operator, GNC. The conventional form of interconnection is that between two network gateways. Operators that do not wish to roll out networks but only provide services may access the GNC network by agreement reached in commercial negotiations or prices set by the Authority in the Reference Interconnect Offer. GNC has officially published its Reference Interconnect Offer (RIO), which states that an operator wishing to interconnect with the GNC network will pay GNC a fixed price of 2.3 pence per minute. Operators providing services can access the GNC network and pay 2.7 pence per minute. These figures were agreed following a cost accounting exercise undertaken by GNC and examined by the GRA together with independent consultants contracted from the U.K. The GRA is empowered under the Ordinance to intervene by determining the terms and conditions of the interconnection agreement, if the negotiations run into difficulties or public interest otherwise dictates. Although the GRA encourages operators to conclude interconnection agreements on a commercial basis, intervention by the GRA may be necessary from time to time when commercial negotiations run into dispute or dead-lock. Such intervention is made by way of dispute resolution, a procedure for which has been set up by the GRA in order to handle the majority of complaints, such as interconnection disputes or other complaints of a more general nature. The procedure is available on the GRA website at (The Interconnection Dispute procedure has not been posted on the website but will be included in the next couple of months). REGULATING THE INDUSTRY The GRA has been involved in a dispute on access this year between GNC and Call Direct an unlicensed operator who was providing services before the Telecommunications Ordinance came into force. Call Direct has applied for a licence, which is being considered by the Minister. 11

13 The information requested from applicants is designed to establish the applicants managerial, financial and technical expertise, coupled with compliance of regulatory measures. Calling Line Identification (CLI) In May 2002 the GRA approved the Calling Line Identification procedures which must be adhered to by all operators. This Notice was posted on the GRA website. The CLI document complies with EU requirements and means that identification of CLI will be provided to all customers irrelevant of their chosen operator, which in turn fosters a fair competitive environment. Payphones The incumbent operator GNC has an obligation to provide sufficient payphones in Gibraltar, a number of which must be accessible to disabled customers, especially near the city centre. The GRA is satisfied that the number of payphones currently provided by GNC meets these requirements. REGULATING THE INDUSTRY Additional Regulatory Safeguards on Dominant Operators In order to ensure that the consumers interests are not stifled by the market power of the dominant operator, additional safeguards are incorporated in the Telecommunications Ordinance and licence conditions of operators. For example, restrictions are placed on price reductions on the incumbent, which have to be approved by the Minister and/or the GRA before they can be effected to prevent the incumbent from abusing its market power to price competitors out of the market. On the 24 th September 2001 the Minister made a determination on the period of notice for changes to tariffs. 12

14 Enforcement of Fair Competition Conditions To ensure that competition in the market can develop healthily, telecommunications licences have incorporated conditions designed to promote fair and effective competition, in particular, the conditions prohibiting anti-competitive practices. The most restrictive provisions lie with the incumbent operator, GNC. The legislation enables the GRA to control the power the incumbent holds so that it does not effectively abuse its dominant position to oust other newcomers out of the market and in fact recreate a monopoly situation. Complaints received of abusive practices or unfairness will be examined by the GRA on a case-by-case basis. The GRA has in place a formal Dispute Resolution Procedure, which is fully transparent and accessible for those wishing to formulate a complaint. The GRA will ensure that it is transparent, reasonable, objective and nondiscriminatory when dealing with competition issues as well as when conducting its ordinary business, as required under the Telecommunications (Competition) Regulations 2001 and in observance of EU competition law. Fixed Services The Telephone Service is operated by Gibraltar Nynex Communications Limited, a joint venture company between the Government of Gibraltar and Verizon Communications Inc. an American company. GNC was initially formed on the 8 th May During 2001 there were two pertinent issues that dominated the year. On the 19 th July 2001, the Government of Gibraltar implemented several European Union Directives with the commencement of the Telecommunications Ordinance 2000, introducing liberalisation of telecommunications and opening up the industry to competition. Then, on the 26 th September 2001, Gibraltar Nynex Communications Limited and Gibraltar Telecommunications International Limited, the international carrier, came under the common ownership of the Government of Gibraltar and Verizon Communications Inc. REGULATING THE INDUSTRY 13

15 Fixed Services Statistics for 2001 During 2001 there was a net increase of 971 in the number of exchange lines connected. The total number of exchange lines at the end of 2001 stood at 24,512. There were 40 applicants on the waiting list National Traffic Calls 37.8 million 36.6 million International Calls 6.65 million 7.25 million Operator Assisted Calls 20,923 27, REGULATING THE INDUSTRY National Traffic Calls International Calls Operator Assisted Calls Chart showing international, national traffic and Operator assisted calls for

16 For the period January 2002 to the end of March 2002 the number of originated effective calls was as follows: 2002 approximate figures National Traffic Calls 12.5 million International Calls 2 million Operator Assisted Calls 5,000 Originated Effective Calls 1% 14% 85% Operator Assisted Calls International Calls National Traffic Calls The total number of exchange lines connected fell by 239. The total number of exchange lines connected as at end of March this year stood at 24,273. The total number of applicants on the waiting list increased and stood at 83. REGULATING THE INDUSTRY The fall in the total number of exchange lines was due to the departure of a large call centre from Gibraltar as a result of the changes to tax laws in the United Kingdom. 15

17 Mobile Services Mobile phone services are operated in the 900 MHz bands and 1800 MHz bands. At present there is only one licensed mobile phone service operator namely, Gibtel who operate a GSM mobile network. Gibtel has not been designated as having Significant Market Power in providing mobile telecommunications since many people in Gibraltar use Spanish mobile phone operators, which are considered by the GRA to provide unfair competition to the Gibraltar operator. Many customers in Gibraltar subscribe to the Spanish mobile networks in order to overcome the refusal by Spanish operators to enter into Roaming Agreements with the Gibraltar operator. This represents a barrier to trade in the mobile services market. At 31 st March 2002, there were 10,580 subscribers to the Gibtel mobile service, 6,653 of these being pre-paid and 3,927 post-paid. There has been no change to mobile prices other than international call rates, which have been reduced in line with reductions in international direct dialled calls. REGULATING THE INDUSTRY 33% 67% Post-paid Pre-paid Paging There is no great demand for the provision of paging services in Gibraltar at present, and the sole operator, Gibtel, provides a public paging service. No new applications to provide public paging services have been received. 16

18 Internet At the end of March this year, there were two licensed Internet Service Providers in Gibraltar, GibNet and GNC Networks. Gibraltar has its own top level domain.gi Internet services as a whole saw an increase of approximately 21% in subscriber dial-up accounts indicating that more and more people are using the Internet; an increase of 16% in home users and 5% in business users. Internet Subscribers Business Residential In February 2002, the Gibraltar Regulatory Authority issued a Direction and an Information Notice to Internet Service Providers on Internet security. Both documents are available on the GRA website. Tariff Rebalancing The rebalancing of tariffs is essential when a market has opened up to competition. In an exclusive market the incumbent is able to subsidise the cost of local calls with revenue from international calls. Following liberalisation cross-subsidisation of services is not permitted. REGULATING THE INDUSTRY GNC commenced its tariff rebalancing in July 2001, in consultation with the GRA. This resulted in an increase in local call charges and rental charges. Tariff re-balancing is a lengthy process and the GRA is expecting GNC to complete rebalancing tariffs within the next 18 months. 17

19 Accounting Separation Transparency and cost orientation of interconnection tariffs is a cornerstone of the EU telecommunications liberalisation process. The provision of separate accounts through reasonable cost allocation methods is a EU requirement. The EU detailed its recommendations for accounting separation and cost accounting in document 98/322/EC on interconnection in a liberalised telecommunications market. Early in July last year, the GRA employed consultants from the U.K. to examine the Accounting Separation Report produced by PriceWaterhouseCoopers for GNC. The Interconnection Directive states that operators with Significant Market Power (SMP), such as GNC, have obligations to provide interconnection tariffs that are cost orientated and calculated in a transparent way. The purpose of accounting separation is to analyse information from accounting records in order to reflect as closely as possible the performance of parts of the business as if they operated as separate businesses. This produces transparency and enables competitors to assure themselves that incumbent operators with SMP charge for the services provided to their own retail business in the same way as those supplied to their competitors. It ensures that there is no cross subsidy between their dominant core network and their retail services. REGULATING THE INDUSTRY Numbering Plan The ownership of the Gibraltar numbering plan is vested in the Government and the GRA has the duty to administer it effectively to enable competition in the market. Numbering continues to be a major problem in Gibraltar and an offer by Spain purporting to provide Gibraltar with 70,000 extra numbers was rejected by the Authority on regulatory grounds. The Government and the Gibraltar telephone companies also carried out their separate examinations and assessments of the offer and each, separately, concluded that the Spanish offer was unacceptable, on political, and commercial grounds respectively. 18

20 SPECTRUM MANAGEMENT INTERNATIONAL FRAMEWORK The Global Level The need for international planning of frequency allocations and protection of use of radio spectrum has long been recognised. Globally, the task falls to a United Nations organisation, the International Telecommunication Union (ITU). The ITU is tasked with regulating the use of radio spectrum and ITU member nations decide what procedures to adopt. The ITU Radio Regulations regulate the use of radio spectrum internationally and contain the international frequency allocation table. This forms the global framework for regional and national planning. ITU member nations each establish an Administrative Authority. For the UK and Gibraltar, this is the Radiocommunications Agency (RA). The GRA has drawn up in conjunction with the RA local frequency plans for the use of radio spectrum. These plans reflect the global plan set out in the ITU Radio Regulations, but are much more detailed. The plans state the type of radio services that will be permitted to operate in each frequency band. These plans are termed frequency allocations in which spectrum is allocated to internationally defined radio services, such as mobile, broadcasting etc. The European Level More detailed planning of the spectrum is conducted at the European level through CEPT (European Conference of Postal and Telecommunications Administrations currently 43 countries), and in particular its European Radiocommunications Committee (ERC) and its subordinate committee the Frequency Management Working Group. A very limited number of allocations are also prescribed through EU Directives. The ERC produces Recommendations and Decisions on spectrum usage. The Decisions, when implemented by member countries, form the basis for pan-european (not just EU) harmonisation of spectrum usage at the level of specific applications such as cellular, digital audio broadcasting, radio local area networks etc. In Gibraltar, tables showing the frequency allocations are published in a separate document. The ERC co-ordinates long-term spectrum planning in Europe and has produced the European Common Allocation (ECA) table. This is a harmonised frequency table for Europe for the future, covering most of the usable spectrum. The ERC also provides the forum for co-ordinating European preparations for WRCs. Gibraltar does not form part of CEPT and is not required to comply with ERC Decisions. However, in the interests of harmonisation with Europe, Gibraltar has implemented many ERC Decisions. SPECTRUM MANAGEMENT 19

21 Gibraltar Spectrum Management The Gibraltar Radio Spectrum Management Panel (GRSMP), which was constituted early in 1996, is chaired by the Chief Executive of the GRA and includes representatives from the GRA, the RA, the Ministry of Defence, and the Emergency Services. The role of the GRSMP is to provide strategic advice on spectrum management policy issues, to the Minister for Telecommunications. Policy decisions are crucial for the protection of the various services in Gibraltar and to ensure they may continue to operate without suffering harmful interference. Licensing of the Electromagnetic Spectrum The Wireless Telegraphy Ordinance was repealed on commencement of the Telecommunications Ordinance 2000 on 19 th July 2001 and its provisions incorporated as Part IV of the new Ordinance. The GRA is responsible for issuing Part IV licences on behalf of the Minister for Telecommunications. A breakdown of the type of Part IV licences issued in 2001/2002 is shown in the table below. Type of licence New Licences Total No. of Issued Licences Ship Station Licences CB Radio 0 39 Radio Amateur 0 45 Dealers 1 98 Private Mobile Radio (PMR) 0 40 Port Operations 0 31 VSAT 1 3 SRD (LAN) 0 6 Accounting Authorities 1 19 Total Revenue SPECTRUM MANAGEMENT 17% 2% 9% 7% 4% 27% 32% 1% 1% Ship Station Licences CB Radio Radio Amateur Dealers Port Operations VSAT Private Mobile Radio SRD (LAN) Accounting Authorities 20

22 Maritime The maritime industry continues to grow and as a result it accounts for 58% of the licensing activities and 49% of the revenue collected in respect of the Part IV licences. As a greater number of vessels are registered under the Gibraltar Flag every year, the maritime licensing requirements increases. 129 new vessels have been issued Ship Station Licences and an additional Accounting Authority has been licensed to provide billing facilities to Gibraltar registered vessels. Overall there are 345 active Ship Station licences, 70% of which are for pleasure vessels, 29% for merchant vessels and the remaining 1% accounts for the official vessels run by the Port Authority, Royal Gibraltar Police and Customs. Ship Station Licences 29% 1% Official vessels Pleasure Vessels Merchant Vessels 70% The GRA is not only responsible for the issuing of Ship Station Licences; it also maintains an Emergency Positioning Identification Radiolocation Beacon (EPIRB) database with crucial information which is available to Port Authorities and to Coast Guards worldwide in case of an emergency. The GRA also sends this and additional information periodically to the ITU to update the Maritime mobile Access & Retrieval System (MARS). This system allows the Maritime Community to consult the current contents of the master ITU Ship station database on Radio Amateurs & CB Radio Radio Amateurs & Citizen s Band (CB) users together only account for 2% of the Part IV licences processed. With the advent of GSM phones and the Internet the number of users has been declining and over the past year no new licences have been issued. Nevertheless, the GRA works very closely with the Gibraltar Amateur Radio Society and is jointly developing a Foundation Licence to attract more amateur radio enthusiasts. SPECTRUM MANAGEMENT 21

23 Dealers Under the law, any person who sells or deals in telecommunications equipment requires a Dealers Licence to operate. The majority of these licences expire on the 30 th September and constitute the second largest licence category. Private Mobile Radio (PMR) Demand for PMR licences has also decreased over the past five years due to the proliferation of GSM phones. Furthermore, last year short-range radios operating on 446 MHz were exempt from licensing in Gibraltar in line with the rest of Europe. No new PMR licences were issued this year. Port Operations Ship agents, ship chandlers and other maritime businesses require Port Operations Licences to communicate on the busy maritime channels. Calling channel 71 and working channels 61,62,63,68 and 69 have been set-aside for Port Operators to use. VSAT Very Small Aperture Terminals (VSATs) are small Earth Stations that operate within GHz at low power levels. Three licences have been issued over the past two years. SRD (LAN) SPECTRUM MANAGEMENT Short Radio Devices may be used in Gibraltar without a requirement for licensing as they are covered under the Exemption Regulations of the Telecommunications Ordinance, e.g. PMR 446, Car Locking Systems, Wireless Local Area Networks (WLAN). However, WLANs do not require licensing whilst a network is operated within a building, if a link between two or more buildings is required then that wireless LAN link would require licensing under Part IV of the Telecommunications Ordinance. Six licences have been granted, and an increase in demand for these systems has been noted. This relatively low power equipment is licensed on a non-protected, non-interference basis. Accounting Authorities A maximum of 25 Accounting Authorities are allowed in each country, currently Gibraltar has licensed 19 authorities and expects this to increase as the maritime industry continues to grow and more vessels register in Gibraltar. 22

24 Interference and Inspection The GRA is responsible for protecting and monitoring the electromagnetic spectrum in Gibraltar. However, due to the proximity of Spain it is impossible to guarantee a licensee, interference free operations. The GRA has developed different software programs to aid its management of the Radio spectrum. An ongoing monitoring programme to identify available frequencies and bands complements this. When an operator reports interference, the GRA attempts to identify the source before taking any action. If the interfering signal originates in Gibraltar that operator is contacted and as part of its licensing conditions could be required to reduce transmitter power or co-ordinate with the other operator. If the interfering transmitter is operated without the appropriate licence the equipment will be disconnected until the system can be inspected and a licence is issued. If the interference is identified as emanating from Spain or Morocco then a formal report is sent to the RA who in turn contact the other country s administration to request their cooperation. There is a procedure set by the ITU for handling interference, which involves bilateral meetings and co-ordination of systems. This procedure does not provide a quick solution and therefore certain services and systems are sometimes altered or migrated to another frequency in order to avoid interference. The GRA is currently surveying all of the main transmitter sites in Gibraltar, and most systems will undergo an inspection before a licence can be granted. Enforcement The GRA is currently working with the Community Constables of the RGP in identifying illegal radio use. As a result, 2 CB radio transceivers were confiscated by the RGP this year. UK Administration The GRA is responsible for the protection of radio systems in Gibraltar and some services are registered internationally to avoid interference. The GRA informs the UK administration of the frequencies to be registered and they in turn notify the ITU for insertion in the International Frequency List. Updates to this list are circulated on a regular basis and if an administration identifies the potential of interference to one of their systems then they can request that the notifying administration co-ordinate that service with them and possibly reduce power levels or even change frequency. The GRA works very closely with the RA and this has attracted several satellite operators to consider Gibraltar for their satellite control centres. They befit from the expertise of the RA and the support and strategic location of Gibraltar. Currently SES is building their first satellite earth station at Windmill Hill to control a Geo-stationary broadcasting satellite. Training and Development The telecommunications industry is rapidly changing and the GRA is committed to training its staff to keep abreast with the advancements in technology. A formal training programme has been set up directed towards maximising staff knowledge and their ability to fulfil their diverse responsibilities and obligations. SPECTRUM MANAGEMENT 23

25 WORK PROGRAMME The work programme for includes the following: Reporting requirements The GRA has a duty under the Telecommunications Ordinance and Regulations to inform the Commission of the European Union on the designation of the operator in Gibraltar having Significant Market Power in relation to leased lines and universal service obligations; these Notices will be produced shortly. The GRA also has a duty to report to the Chief Minister on developments and work undergone by the GRA during the course of its financial year. GRA website The GRA website was established last year in order to facilitate communications and information to both consumers and operators alike. It enables new entrants to retrieve information on application procedures as well as providing guidance. In the interests of transparency the GRA will publish information relating to the industry on a regular basis and the website will be continuously updated and improved as liberalisation progresses. Internet services The GRA s monitoring agenda in this area consists of regulation of Domain names, [e-signatures], privacy and cyber-crime. Data protection legislation will be in force in Gibraltar in the future. Processing of data may be carried out for legitimate purposes only, and consumer protection is also vital. This will also ensure that consumers have faith in the services provided. New Telecommunications Directives Package WORK PROGRAMME The European Union has issued a new package of liberalising Directives to be implemented by July The GRA is advising on amendments to current legislation to transpose the new Directives. Notices The GRA is regularly producing notices relevant to the industry and in line with the Telecommunications Ordinance and Regulations. 24

26 Reference Interconnect Offer - GNC The Reference Interconnect Offer produced by the incumbent operator GNC has to be reviewed periodically to accommodate changes in the competitive climate. The next review is scheduled for January Dispute Resolution Procedures Dispute resolution procedures have already been put into place in line with the Telecommunications Ordinance, Regulations and EU Directives. Dispute resolution procedures are available on the GRA website. Further dispute resolution procedures shall be set up during the course of the year on more specific areas of telecommunications where agreement is necessary. The GRA will be responsible for resolving disputes between operators during the course of the next financial year. Currently, there is an ongoing dispute between two operators where the dispute relates to the access charge one operator must pay the other for the use of their network. Caller Line Identification The Caller Line Identification (CLI) document will soon be published on the GRA website. Advertising Code of Practice for Telecommunications Providers. Following the transposition into Gibraltar law of Directive 97/55/EC and 84/450/ EEC relating to misleading and comparative advertising, the Misleading and Comparative Advertising Ordinance 2001 was enacted in January and includes provisions on comparative advertising. The GRA issued a Notice to all telecommunications operators in April giving advice on advertising practices. The advice is also available on the website. Processing of New Licence Applications The GRA has been busy with requests for information from persons wishing to provide telecommunications services in Gibraltar. This year two operators have been licensed under General Authorisations, namely, GibNet Limited and Equant Gibraltar Limited. Two further applications were received during the year, one by Datatronix Limited trading as Call Direct and another from Broadband Gibraltar Limited for Individual Licences. These are currently being reviewed by the Minster for Telecommunications who is the licensing authority. Enquiries from persons wishing to provide services are dealt with regularly and the GRA gives advice and information to all applicants. WORK PROGRAMME

27 Investment in Monitoring Equipment Radio spectrum monitoring equipment is to be purchased by the GRA to aid the spectrum management process and to conduct site inspections and identify sources of interference. In light of the Stewart Group Report in the UK and recent local concern with mobile base stations, the monitoring equipment will be used to measure emissions from base stations and an audit programme has been devised to periodically check all the main transmitter sites in Gibraltar. Quality of Service Targets The GRA is constantly reviewing its procedures in order to improve the service provided to its customers. For further information, visit our website WORK PROGRAMME