Decision No. 16/2012/QD-TTg on auctioning and transferring the right to use radio frequency spectrum

Pursuant to …;

Provisions on Auctioning and Transfer of Radio Frequency Usage Rights

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Pursuant to the Law on Organization of the Government dated December 25, 2001;

WHEREAS, the Law on Radio Frequency Spectrum dated November 23, 2009;

Pursuant to the Law on Telecommunications dated November 23, 2009;

Based on Decree No. 17/2010/NĐ-CP dated March 4, 2010 on auctioning assets;

At the proposal of the Minister of Information and Communications;

The Prime Minister issues a Decision to stipulate provisions on auctioning and transfer of radio frequency usage rights,

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decision stipulates provisions on auctioning radio frequency usage rights and transferring radio frequency usage rights granted through auctions.

Article 2. Interpretation of Terms

In this Decision, the following terms shall be understood as follows:

1. Auctioning radio frequency usage rights (hereinafter referred to as "auction") is the process of determining enterprises eligible to use bandwidth and frequency channels through evaluating minimum requirements and the highest bid price of enterprises. An enterprise meeting the minimum requirements and offering the highest bid price is the winning bidder of the auction.

2. The auction invitation dossier is a collection of documents serving an auction approved by the Minister of Information and Communications for enterprises to prepare their bidding dossiers and participate in the auction.

3. The bidding dossier is a set of documents prepared and submitted by participating enterprises to the auction committee according to the requirements specified in the auction invitation dossier.

4. Minimum requirements are the conditions stipulated in the auction invitation dossier for enterprises when participating in the auction, including legal capacity, financial and investment capacity, technical and operational capacity, and human resources capacity of the enterprise.

5. The commitment letter is a document in the bidding dossier signed and stamped by the legal representative of the enterprise to commit to fulfilling the minimum requirements; committing to comply with the form and level of penalties if the minimum requirements are not fulfilled after obtaining telecommunications licenses and radio frequency usage licenses.

6. Winning bid money is the amount that the winning bidder must pay to obtain the right to use the allocated bandwidth and frequency channels won in the auction.

7. Transferring radio frequency usage rights is the act of an enterprise transferring all rights to use bandwidth and frequency channels under telecommunications licenses and radio frequency usage licenses obtained through winning the auction to another enterprise.

Article 3. Principles of Auctioning and Eligible Participants

1. Auctioning shall be conducted based on principles of transparency, continuity, objectivity, honesty, equality, and protection of the legitimate rights and interests of all parties involved.

2. Eligible participants in the auction are telecommunications service providers with network infrastructure as prescribed by telecommunications laws.

3. Each winning bidder shall be allocated a specific bandwidth and one or several frequency channels as specified in the auction invitation dossier.

Article 4. Bandwidth and Frequency Channels Subject to Auction

For each period, the Minister of Information and Communications shall submit to the Prime Minister for decision the specific list of bandwidths and frequency channels to be auctioned in accordance with the radio frequency planning.

Chapter II

AUCTIONING OF RADIO FREQUENCY USAGE RIGHTS

Article 5. Auction Committee

1. The Minister of Information and Communications decides to establish the Auction Committee and stipulates its operating regulations.

2. Members of the Auction Committee include representatives from units with functions related to radio frequencies, telecommunications, finance, and other units under the Ministry of Information and Communications; representatives from the Ministry of Finance, the Ministry of Justice, and other relevant agencies and organizations.

3. The Auction Committee is responsible for determining the starting price, preparing the auction invitation dossier, and organizing the auction.

Article 6. Starting price of the frequency band blocks and frequency channels to be auctioned

The frequency bands for auction shall be divided into frequency band blocks in accordance with the provisions of the radio frequency planning. The Minister of Information and Communications shall decide on the starting price of the frequency band blocks and frequency channels to be auctioned before organizing the auction based on the following principles:

1. Based on the value of use of the frequency band block and frequency channel at the time of auction, and the radio frequency usage fee payable in accordance with the laws on fees and charges.

2. Refer to the actual selling prices of similar or equivalent frequency band blocks and frequency channels that have been auctioned in Vietnam and in countries with comparable developed economies to Vietnam.

3. Refer to international experience in determining the starting price of frequency band blocks and frequency channels.

Article 7. Notice inviting participation in the auction

1. At least thirty days prior to the issuance of the Auction Invitation Documents, the Auction Committee shall announce the invitation to participate in the auction on the Ministry of Information and Communications' electronic information website and send the invitation letter to all enterprises specified in Clause 2, Article 3 of this Decision.

2. The notice inviting participation in the auction shall include the following main contents:

a) Frequency bands and frequency channels to be auctioned;

b) Time and place for issuing the auction invitation documents;

c) Time and location for submitting the auction bid documents.

Article 8. Auction Invitation Documents

The auction invitation documents shall include:

1. Documentation introducing the frequency bands and frequency channels to be auctioned; the term and conditions for using the frequency bands and frequency channels; the starting price of the frequency bands and frequency channels to be auctioned; and the bid deposit.

2. Minimum requirements.

3. Sample registration form for participating in the auction.

4. Sample commitment form.

5. Auction rules.

6. Other necessary documents to serve the auction.

Article 9. Registration for Participation in the Auction

1. Enterprises participating in the auction shall submit the Auction Bid Documents, consisting of one original and three copies, directly to the Auction Committee.

2. The auction documents shall include:

a) The registration document for participating in the auction;

b) Documentation proving compliance with minimum requirements;

c) Commitment letter;

d) Other documents as required by the auction invitation documents.

Article 10. Evaluation of Auction Bid Documents

1. The Auction Committee shall publicly open the auction documents at the time and place specified in the auction invitation documents and organize the evaluation of the auction documents.

2. Enterprises with complete and valid Auction Bid Documents that meet the minimum requirements and other requirements stipulated in the Auction Invitation Documents shall have the right to participate in bidding.

3. The list of enterprises having the right to participate in bidding shall be publicly announced on the Ministry of Information and Communications' electronic information website within a period not exceeding forty-five working days from the date the Auction Committee receives the Auction Bid Documents.

The Auction Committee shall notify the reasons for not being able to participate in bidding to enterprises that do not comply with the provisions of Clause 2 of this Article.

4. In case only one enterprise has the right to participate in bidding, the Auction Committee shall not organize the bidding process and shall reorganize the auction in accordance with Article 15 of this Decision.

Article 11. Organization of Bidding

1. The bidding process shall be conducted through multiple rounds of bidding simultaneously for all frequency band blocks and frequency channels, or in one round, or in another form prescribed by the Minister of Information and Communications in the Auction Invitation Documents.

2. The Minister of Information and Communications shall specify the organization of the bidding process in the auction regulations.

Article 12. Withdrawal from the Auction

1. An enterprise that has the right to participate in bidding after paying the bid deposit and wishes to withdraw from the auction must notify the Auction Committee of its decision not to continue participating in bidding.

2. The notification of the enterprise shall only be valid if the Auction Committee receives it at least twenty-four hours before the bidding starts, excluding national holidays and public holidays.

Article 13. Annulment of Auction Results

The auction results of enterprises shall be annulled in the following cases:

1. The business violates the auction regulations.

2. There is collusion among the participating parties or businesses in the auction.

3. The winning enterprise does not pay the auction-winning amount as stipulated in Clause 1, Article 17 of this Decision.

Article 14. Public Announcement of Auction Results

The Ministry of Information and Communications shall publicly announce the auction results on the Ministry's electronic information website within fifteen working days from the date of the auction's conclusion.

Article 15. Re-auction Organization

1. The Ministry of Information and Communications shall organize a re-auction for the entire bandwidth and frequency channel in the following cases:

a) At the first auction, no enterprise submits an auction application form or the number of enterprises eligible to participate in bidding is less than or equal to one;

b) All enterprises that won the auction have their results annulled;

c) All enterprises bid lower than the starting price.

2. The Ministry of Information and Communications shall organize a re-auction for blocks of bandwidth and frequency channels that were not determined to have winning enterprises in the previous auction.

3. The procedures and formalities for the re-auction shall be conducted as in the initial auction.

Article 16. Auction Fees and Auction Costs

1. Enterprises participating in the auction must pay auction fees in accordance with the laws on fees and charges.

2. Auction costs include:

a) Costs related to the preparation of the auction invitation document, including costs for hiring experts or consulting services (if any);

b) Costs for the activities of the Auction Committee, including costs for hiring experts or consulting services (if any).

3. Auction costs shall be taken from the auction fees collected from participating enterprises. In cases where the revenue is insufficient to cover the expenses, it may be taken from the regular operating budget of the Radio Frequency Management Department approved by the Ministry of Information and Communications and paid according to current regulations.

Article 17. Deposit Payment

1. The deposit is specified in the auction invitation document but is at least 1% and not more than 15% of the starting price of the block of bandwidth and frequency channel.

Enterprises meeting the requirements set out in Clause 2, Article 10 of this Decision wishing to continue participating in bidding must pay the deposit into the account designated by the Ministry of Information and Communications as stipulated in the auction invitation document.

2. The winning enterprise shall have the deposit deducted from the auction winning price.

3. The deposit shall be refunded in the following cases:

a) Enterprises that do not win the auction will be refunded the deposit within a period not exceeding fifteen working days from the date of announcement of the auction results;

b) Enterprises withdrawing from the auction in accordance with Article 12 of this Decision will be refunded the deposit within a period not exceeding fifteen working days from the date the Auction Committee receives the enterprise's withdrawal notice.

4. The deposit shall not be refunded in the following cases:

a) The winning enterprise does not pay the auction-winning amount as stipulated in Clause 1, Article 18 of this Decision;

b) Enterprises withdraw from the auction without complying with the provisions of Article 12 of this Decision;

c) The highest bidder withdraws their bid before the auction concludes.

Article 18. Payment of Auction-Winning Amount

1. The winning enterprise must deposit 50% of the auction-winning amount into the account designated by the Ministry of Information and Communications within ninety days from the date the Ministry of Information and Communications announces the auction results.

If the winning enterprise fails to pay the auction-winning amount as stipulated, its winning result will be annulled and the deposit will not be refunded.

2. The remaining amount must be paid according to the following schedule:

a) Deposit 25% of the auction-winning amount into the account designated by the Ministry of Information and Communications within eighteen months from the date of announcement of the auction results;

b) Deposit the remaining 25% of the auction-winning amount into the account designated by the Ministry of Information and Communications within the period from nineteen to thirty-six months from the date the Ministry of Information and Communications announces the auction results.

3. Enterprises violating the provisions of Clause 2 of this Article will have their radio frequency usage licenses revoked.

4. The auction-winning amount does not include the radio frequency usage fee.

5. Revenue from the auction is submitted to the state budget. Priority should be given to using this money to develop telecommunications infrastructure, promote telecommunications, broadcasting, and television services according to projects approved by the Prime Minister.

Article 19. Issuance of Radio Frequency Usage Licenses and Telecommunications Licenses

1. The successful bidder shall comply with the provisions of the laws on telecommunications and radio frequencies and the provisions set out in the Auction Invitation Document to obtain a telecommunications license and a radio frequency usage license.

2. The term of validity of the telecommunications license and the radio frequency usage license shall be implemented in accordance with the provisions of the laws on telecommunications and radio frequencies.

Article 20. Revocation of Radio Frequency Usage Licenses

1. The successful bidder shall have their radio frequency usage license revoked in cases stipulated in Article 23 of the Radio Frequency Law and in the case stipulated in Clause 3, Article 18 of this Decision, and shall not be refunded the auction winning bid amount and the radio frequency usage fee already paid.

2. If the successful bidder has their radio frequency usage license revoked for planning purposes as stipulated in Article 12 of the Radio Frequency Law, they shall be compensated according to the provisions of the law.

Article 21. Responsibilities of the Successful Bidder

The successful bidder shall bear the following responsibilities:

1. Paying the full auction winning bid amount according to the method, time limit, and location specified in the Auction Invitation Document.

2. To implement the contents of the Commitment Letter and pay fines for breach of commitment.

3. Complying with the provisions of the laws on radio frequencies.

4. Submitting the licensing fee for the radio frequency usage license and the radio frequency usage fee according to the provisions of the law.

5. Fulfilling other obligations as prescribed by law.

Article 22. Handling Violations in Auctions

1. The Auction Committee shall be subject to administrative penalties if it violates the provisions of this Decision; if damage is caused, it must compensate according to the provisions of the law.

2. Members of the Auction Committee and individuals involved who fail to fulfill their assigned responsibilities or abuse their positions and powers to intentionally violate the auction regulations causing damage to the State and related parties shall be disciplined, subject to administrative penalties, or criminally prosecuted depending on the severity of the violation.

3. Enterprises participating in auctions that violate the provisions of this Decision shall be subject to administrative penalties or criminal prosecution depending on the nature and severity of the violation; if damage is caused, they must compensate according to the provisions of the law.

4. Administrative violations, forms, authority, and procedures for handling administrative violations in auctions shall be carried out in accordance with the provisions of the laws on handling administrative violations in judicial matters and other relevant laws on handling administrative violations.

Chapter III

TRANSFER OF RIGHT TO USE RADIO FREQUENCIES

Article 23. Transfer of Rights to Use Radio Frequencies

1. An enterprise granted a radio frequency usage license through an auction may transfer the right to use the frequency band and radio frequency channel to an enterprise specified in Clause 2 of this Article after exploiting and using the frequency band and radio frequency channel for at least three years from the date of issuance of the radio frequency usage license.

2. The entity receiving the transfer of rights to use radio frequencies shall be telecommunications service providers with network infrastructure meeting the minimum requirements set out in the Auction Invitation Document in the auction in which the transferring enterprise participates.

3. The Ministry of Finance shall take the lead and coordinate with the Ministry of Information and Communications to develop and submit to the competent state agency for promulgation regulations on taxes for the transfer of rights to use radio frequencies.

Article 24. Procedures for Transferring the Right to Use Radio Frequency

1. The transferring enterprise and the receiving enterprise shall submit the transfer application directly or through postal service to the Ministry of Information and Communications.

2. The transfer documents shall be compiled into one set, including the following documents:

a) A request for transfer signed and stamped by the legal representative of the transferring enterprise and the receiving enterprise;

b) An agreement between the transferring enterprise and the receiving enterprise ensuring the legitimate rights and interests of organizations and individuals affected by the transfer;

c) Documentation from the receiving enterprise proving its compliance with the minimum requirements of the auction that the transferring enterprise participated in; a commitment letter from the receiving enterprise to continue implementing the commitments made by the transferring enterprise in the Auction Application.

3. The Ministry of Information and Communications shall examine the completeness and accuracy of the transfer application within forty-five days from the date of receipt of all required documents and notify the enterprises in writing regarding the approval of the transfer.

In case the transfer of the right to use radio frequency is not approved, the Ministry of Information and Communications shall notify the enterprise in writing and specify the reasons for rejection.

4. Issuance of telecommunications licenses and radio frequency usage licenses to the receiving enterprise shall be carried out in accordance with the laws on telecommunications and radio frequencies.

The validity period of the telecommunications license and the radio frequency usage license issued to the receiving enterprise shall be equivalent to the remaining validity period of the license issued to the transferring enterprise.

Article 25. Responsibilities of the Enterprise Transferring the Right to Use Radio Frequency

The enterprise transferring the right to use radio frequency shall have the following responsibilities:

1. Ensuring the legitimate rights and interests of organizations and individuals affected by the transfer.

2. Fulfill tax obligations related to the transfer of the right to use radio frequency in accordance with the law.

3. Complete the fees for issuing the radio frequency usage license and the radio frequency usage fee.

Article 26. Responsibilities of the Enterprise Receiving the Transfer of the Right to Use Radio Frequency

The enterprise receiving the transfer of the right to use radio frequency shall have the following responsibilities:

1. Ensuring the legitimate rights and interests of organizations and individuals affected by the transfer.

2. Fulfill tax obligations related to the transfer of the right to use radio frequency in accordance with the law.

3. Complying with the provisions of the laws on radio frequencies.

4. Submitting the licensing fee for the radio frequency usage license and the radio frequency usage fee according to the provisions of the law.

Chapter IV

IMPLEMENTING PROVISIONS

Article 27. Implementation Provisions

3. This Decision takes effect from May 1, 2012.

2. The Minister of Information and Communications shall be responsible for guiding the implementation of this Decision. In special cases involving national defense and security, the Ministry of Information and Communications shall report to the Prime Minister for consideration and decision.

3. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of provincial People's Committees directly under the Central Government are responsible for enforcing this Decision./.