Post Grant Licensing Issues

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Post Grant Licensing Issues

• Presenter Mr. David A. Cox
• General Counsel - ECTEL

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Purpose of the Presentation

• To discuss
• (1) Assignments/transfers
• (2) Modifications,
• (3) Terminations,
• (4) Renewals,
• (5) Revocations,
• (6) Surrenders,
• (7) Suspensions,
• of Licences and Frequency Authorizations

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(1) Assignment What it means

• An assignment is simply the transfer of the legal
  rights held by one party (the assignor) to
  another party (the assignee.)
• Usually applies to private contracts.
• In regulated industries, can only be achieved
  with permission of, or be facilitated by, the
  Regulator.

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(1) Assignment Why Regulate?

• Public policy reasons
• Recall licensing process permits someone to do
  something legally which is unlawful. Transfers
  ensure services are provided according to law
• If unregulated, licensees can escape lawful
  regulation by giving licence away

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(1) Assignment Why Regulate. Cont.

• Market Reasons
• Mergers and acquisitions are common in telecoms
  industry. Controlling transfers gives Regulator
  control over who develops undue market power.
• Pragmatic Reasons
• Transfers promote continuity. Co.s go out of
  business but consumers need to be served,
  employment generated, networks taken over, etc.

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(1) Assignment Cont.

• Harmonized Telecom Acts are silent on assignment
  or transfers of licences.
• All licences contain conditions restricting
  assignment or transfer makes it subject to
  Ministers permission.
• Licensing and Authorization Regulations provide
  for a procedure (See Part VIII LA Regs, s.
  15-16, SVG.)

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(1) Assignment Process

• Licensee should apply 90 days prior to the
  proposed date of transfer (per sec. 15(1) of LA
  Regs)
• Transferee should submit simultaneously,
  application for licence
• ECTEL conducts evaluation
• Standard of review is the same for new applicant

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(1) Assignment Process. Cont.

• ECTEL makes recommendation to Minister
• Within 21 days of recommendation from ECTEL,
  Minister grants or refuses transfer
• Must give reasons for rejection
• Whole process should take no more than 3 months!

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Assignment Process in Action
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What if only name changes?

• Changes in name do not require assignments
• Should be no change in beneficial ownership of
  company
• Mere internal reorganizations do not count
• Must notify Minister within 30 days (per sec. 16
  of LA Regs. SVG).

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(1) Assignment Procedures.

• What fees?
• Fees should be the same as a fresh applicant.
• What terms?
• Should be the same as granted to original
  licensee.
• What Duration?
• Should be the same as granted to original
  licensee.

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(2) Modification What it means.

• A modification is an alteration, adjustment, or
  change to a licence or frequency authorization.
• Governed by sec. 40 of the SLU TA.
• May be required for a range of circumstances/reaso
  ns
• frequently necessary for frequency
  authorizations,
• sometimes the result of marketplace changes,
• could be a result of changes to a business plan.

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(2) Modification Processes

• Can only be made on ECTELs recommendation.
• Can only be effected by a Minister!
• Four grounds in the Act, and two types of
  modification.
• Modification by consent
• Licensee and Minister agree, in writing.
• After consultation with a class of licensees.

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(2) Modification - Processes

• Modification without consent
• Where it is necessary in the public interest, or
• Where it is required for reasons of national
  security.
• Application to modify must be made in the same
  manner as initial application.
• Fees should be same as initial application fees,
  unless specified otherwise.

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(3) Termination - Definition

• Refers to the coming to an end or expiration of
  the legal instrument, i.e. the licence or
  frequency authorization.
• Does not require either Regulator or Licensee to
  do anything.
• Is not a sanction of any kind, but a natural
  process where the time limit on a given legal
  instrument is reached.

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(3) Termination Cont.

• A licence which is not renewed will terminate
  naturally.
• Should be returned to the Minister.
• Providing services under a licence or frequency
  authorization which has terminated (expired) is
  illegal.

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(4) Renewals - Definition

• A renewal is the process of arranging for the
  extension of a licence or frequency
  authorization, as if the instrument was freshly
  granted.
• Should normally be on the same terms and
  conditions as previous grant.
• Entitle the licensee to continue providing
  services uninterrupted.

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(4) Renewals Cont.

• Process should be exactly the same for initial
  application.
• Fees should be those prescribed by Regulations.
• Minister can refuse to renew on several grounds,
  but would have to provide reasons.
• Provided circumstances of licensee unchanged,
  licensee would have a legitimate expectation for
  renewal (refusal should not be arbitrary).

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(5) Revocation What it means.

• A revocation is an annulment, voiding,
  withdrawal, cancellation, taking back, or
  reversing of the legal instrument.
• Very serious regulatory sanction Nuclear Weapon
  of sanctions!
• Governed by sec. 41 of the SLU TA.
• Can only be effected by a Minister.
• Possible on 7 grounds.

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(5) Revocation Cont.

• Revocation may occur where a Licensee
• Operations give rise to interference,
• Breaches the Act,
• Breaches a term of the licence of frequency
  authorization,
• Doesnt pay its fees,
• ECTEL recommends it, Or
• Its in the public interest,
• Required for reasons of national security.

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(5) Revocation Processes

• Prior to revocation, Minister should give 30 days
  notice in writing.
• Minister must specify the grounds for the
  revocation.
• Licensee must be given an opportunity to make
  representations.
• Can chose to fix the problem during the 30 days.
• May object to the revocation.
• Minister must consider before proceeding.

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(5) Revocation Processes Cont.

• Sec. 25 of the LA Regs. SVG
• Minister shall suspend the licence for 3 months
  after expiration of 30 day notice period during
  which licensee ceases operations and remedies the
  breach.
• Revokes where licensee fails to remedy the breach
  within the suspension period (90 days).

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(5) Revocation Processes Cont.

• If revoked, licensee must surrender (return) the
  licence, per sec. 42 of the SLU TA.
• Licensee can pursue judicial review of Ministers
  decision.
• Licensee not entitled to any fees back
  revocation has the effect of making any fees
  paid, forfeit.
• Provision of service once licence or frequency
  authorization has been revoked is illegal!!

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(6) Surrenders (Voluntary) - Definition

• A voluntary surrender of a licence or frequency
  authorization simply refers to relinquishing,
  giving back, abandonment, or returning of the
  rights and privileges granted under the legal
  instrument by the licensees own choice.
• Can happen for a range of reasons.
• Is not a sanction.
• Remember a voluntary surrender is legally a
  request to be released from legal obligations!!!
  Requests must be approved!

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(6) Surrenders (Voluntary) What it means Cont.

• Surrender of frequencies granted as part of a
  batch under a frequency authorization is a
  modification!
• Surrender refers to process of giving up all
  legal rights granted under the instrument.
• Traditionally, Courts regulated surrenders on
  public policy grounds to prevent licensees from
  avoiding necessary regulation by relinquishing
  their licences.

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(6) Surrenders (Voluntary) - Processes

• Once a licence or frequency authorization is
  granted, licensee is liable for all fees, and is
  bound or obligated by all terms and conditions
  until the instrument has terminated, or been
  revoked.
• Voluntary surrender does not take effect on mere
  say so of licensee Surrender is not
  automatic!!!!

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(6) Surrenders (Voluntary) Processes. Cont.

• Licensee must APPLY to surrender, in the same
  manner as they applied for instrument.
• NTRC should forward request to ECTEL for review,
  if Individual Licence.
• ECTEL will review and make a recommendation to
  the Minister.
• Minister will give permission may be granted on
  conditions.
• Licensee remains liable for all fees until
  surrender has been accepted by the Minister!

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(7) Suspension What it means

• A suspension of a licence or frequency
  authorization is a temporary stoppage, cessation,
  or restriction of the privileges and rights
  granted under a licence or frequency
  authorization.
• Is a sanction under the Act.
• Governed by sec. 41 of the SLU TA same
  procedure as for revocation.
• Can only be effected by a Minister
• Same grounds as revocation.

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(7) Suspension Processes Cont.

• Suspension is usually a precursor to revocation
  generally, before you revoke, you suspend.
• Usually relied on to give licensees an
  opportunity to fix a major problem.
• Minister must give licensee an opportunity to
  make representations.
• Licensee can object.

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The End

• Questions and Comments?