Decision No. 16/2012/QD-TTg dated March 08, 2012 of the Prime Minister stipulating the auction and transfer of the right to use radio frequency

DECISION

STIPULATING THE AUCTION AND TRANSFER OF THE RIGHT TO USE RADIO FREQUENCY

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

Pursuant to the November 23, 2009 Law on Radio Frequency;

Pursuant to the November 23, 2009 Law on Telecommunications;

Pursuant to Decree No. 17/2010/ND-CP of March 4, 2010, on property auction;

At the proposal of the Minister of Information and Communications;

The Prime Minister issues the Regulation on auction and transfer of the right to use radio frequency,

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decision provides the auction of the right to use radio frequency and the transfer of the right to use radio frequency acquired through auction.

Article 2. Interpretation of terms

In this Decision, the following terms and phrases are construed as follows:

1. Auction of the right to use radio frequency (below referred to as auction) means the identification of enterprises entitled to use bands and frequency channels through assessment based on minimum requirements and highest bids of enterprises. Enterprises meeting minimum requirements and offer the highest bids are auction winners.

2. Bidding dossier means a collection of documents serving an auction approved by the Minister of Information and Communications as the basis for enterprises to compile bid dossiers and participate in an auction.

3. Bid dossier means documents prepared by an enterprise participating in an auction and submitted to the auction council according to requirements stated in the bidding dossier.

4. Minimum requirements arc requirements stated in the bidding dossier for enterprises participating in an auction, including requirements on legal status, financial and investment capacity, technical and operational capacity and human resources of enterprises.

5. Commitment document means a document in the bid dossier signed and sealed by the at-law representative of an enterprise which states the enterprise s commitment to satisfying minimum requirements and complying with forms and levels of fine when failing to satisfying minimum requirements after being granted a telecommunications license or radio frequency use license.

6. Auction-winning amount is the sum of money payable by the auction winner for having the right to use a band block or frequency channel it wins at an auction.

7. Transfer of the right to use radio frequency means mat an enterprise transfers to another enterprise the whole of the right to use band or frequency channel according to the telecommunications license or radio frequency use license which it wins at an auction.

Article 3. Principles of auction, eligible bidders

1. Auction must be conducted on the principles of publicity, continuity, objectivity, honesty, fairness and protection of the rights and legitimate interests of involved parties.

2. Eligible bidders are enterprises providing telecommunications services with network infrastructure required by the law on telecommunications.

3. Each auction winner will be allocated a band block or one or some frequency channels according to the bidding dossier.

Article 4. Bands and frequency channels allowed for auction

In each period, the Minister of Information and Communications shall submit to the Prime Minister for decision the list of specific bands and frequency channels allowed for auction in accordance with the master plan on radio frequency.

Chapter II

AUCTION OF THE RIGHT TO USE RADIO FREQUENCY

Article 5. Auction council

1. The Minister of Information and-Communications shall decide to set up an auction council and issue its working regulations.

2. An auction council is composed of representatives of units with radio frequency, telecommunications and financial functions and other units of the Ministry of Information and Communications; and representatives of the Ministry of Finance, the Ministry of Justice and other related agencies and organizations.

3. An auction council is tasked to determine reserve prices, compile bidding dossiers and organize auctions.

Article 6. Reserve prices of band blocks and frequency channels put up for auction

Bands put up for auction are divided into band blocks according to regulations of the master plan on radio frequency. The Minister of Information and Communications shall decide on reserve prices of band blocks and frequency channels put up for auction before organizing auctions on the following principles:

1. Being based on the use value of band blocks and frequency channels at the time of auction and payable radio frequency use charges provided by the law on charges and fees.

2. Referring to actual selling prices of band blocks and frequency channels of the same or equivalent types already auctioned in Vietnam and countries with a developing economy similar to Vietnam s.

3. Referring to international experience in the determination of reserve prices of band blocks and frequency channels.

Article 7. Notification of invitation to auction

1. At least 30 days before issuing the bidding dossier, the auction council shall post a notice of auction invitation on the website of the Ministry of Information and Communications and send auction invitations to all enterprises stated in Clause 2, Article 3 of this Decision.

2. A notice of auction invitation contains the following major details:

a/ Bands and frequency channels put up for auction;

b/ Time and place of issuance of bidding dossiers;

c/ Time and place of submission of bid dossiers.

Article 8. Bidding dossier A bidding dossier comprises:

1. Documents introducing the bands and frequency channels put up for auction; duration and conditions on the use of bands and frequency channels; their reserve prices; and required deposit.

2. Minimum requirements.

3. Auction registration form.

4. Commitment document form.

5. Auction regulations.

6. Other documents necessary for the auction.

Article 9. Auction registration

1. A bidder shall submit a bid dossier, with one original and three copies, directly to the auction council.

2. A bid dossier comprises:

a/ Auction registration document;

b/ Documents proving satisfaction of minimum requirements;

c/ Commitment document:

d/ Other documents as required in the bidding dossier.

Article 10. Assessment of bid dossiers

1. The auction council shall publicly open bid dossiers at the time and place stated in the bidding dossier and assess these dossiers.

2. Enterprises with complete and valid bid dossiers and meeting minimum requirements and other requirements stated in the bidding dossier may offer bids.

3. No more than 45 working days after the auction council receives bid dossiers, a list of enterprises entitled to offer bids shall be posted on the website of the Ministry of Information and Communications.

The auction council shall notify the reason for ineligibility to offer bids to enterprises that fail to meet the conditions stated in Clause 2 of this Article.

4. In case there is only one enterprise entitled to offer bids, the auction council may not organize bid offer and shall re-organize an auction under Article 15 of this Decision.

Article 11. Organization of bid offer

1. Bid offer shall be organized in multiple rounds for all band blocks or frequency channels or single bids or other forms decided by the Minister of Information and Communications in the bidding dossier.

2. The Minister of Information and Communications shall specify the bid offer according to auction regulations.

Article 12. Withdrawal from auction

1. After paying a deposit, an enterprise entitled to offer bids that wants to withdraw from the auction shall send a notice of its withdrawal to the auction council.

2. An enterprise s notice is valid only when the auction council receives it at least 24 hours, excluding public holidays prescribed by the State, before the time of bid offer.

Article 13. Invalidation of auction results

Auction results are invalidated in the following cases:

1. Enterprises violate auction regulations.

2. There is collusion among involved parties or among bidders.

3. Auction winners fail to pay the auction-winning amount according to Clause 1, Article 17 of this Decision.

Article 14. Announcement of auction results

Within 15 working days after the end of an auction, the Ministry of Information and Communications shall publicly post the auction result on its website.

Article 15. Re-organization of auction

1. The Ministry of Information and Communications shall re-organize an auction for all bands and frequency channels in the following cases:

a/ At the first auction, no enterprise submits a bid dossier or there is no or only one enterprise entitled to offer bids;

b/ All auction winners have their auction results invalidated;

c/ All enterprises offer bids lower than the reserve price.

2. The Ministry of Information and Communications shall re-organize an auction for band blocks and frequency channels for which no auction winner can be determined at the previous auction.

3. The order and procedures for re-auctions are the same as those applicable to the first-time auction.

Article 16. Auction charges and expenses

1. Bidders shall pay an auction charge according to the law on charges and fees.

2. Auction expenses include:

a/ Expenses related to the compilation of the bidding dossier, including also those for hiring specialists and consultants (if any);

b/ Expenses for activities of the auction council, including expenses for specialists and consultants (if any).

3. Auction expenses are paid with auction charges collected from bidders. In case those charges are insufficient, these expenses may be paid according to current regulations with regular operation funds of the Radio Frequency Directorate according to estimates approved by the Ministry of Information and Communications.

Article 17. Deposit

1. Deposit is stated in the bidding dossier and must not be lower than 1 % and higher than 15% of the reserve price of band blocks and frequency channels.

If wishing to offer further bids, enterprises meeting the requirements slated in Clause 2, Article 10 of this Decision shall pay a deposit into the account designated by the Ministry of Information and Communications in the bidding dossier.

2. Auction winners will have their paid deposits deducted from their auctioning- winning amounts.

3. A deposit may be refunded in the following cases:

a/ An unsuccessful bidder will have its deposit refunded within 15 working days after the date of announcement of auction results;

b/ An enterprise that withdraws from an auction under Article 12 of this Decision may have its deposit refunded within 15 working days from the date the auction council receives its notice of withdrawal.

4. A deposit may not be refunded in the following cases:

a/ The winning bidder does not pay the auction-winning amount according to Clause 1, Article 18 of this Decision;

b/ An enterprise that withdraws from the auction fails to meet the requirements stated in Article 12 of this Decision;

c/ The enterprise offers the highest bid but then withdraws such bid before the end of the auction.

Article 18. Payment of the auction-winning amount

1. Within 90 days after the Ministry of Information and Communications announces the auction result, an auction winner shall pay 50% of the auction-winning amount into an account designated by the Ministry of Information and Communications.

An auction winner that fails to pay the auction-winning amount according to regulations will have its auction winning result revoked and will not have its deposit refunded.

2. The enterprise shall pay the remaining amount according to the following provisions:

a/ Within 18 months after the date of announcement of the auction result, paying 25% of the auction-winning amount into the account designated by the Ministry of Information and Communications;

b/ Within 19 and 36 months after the date of announcement of the auction result, paying 25% of the auction-winning amount into the account designated by the Ministry of Information and Communications.

3. An auction winner that violates Clause 2 of this Article will have its radio frequency use license revoked.

4. The auction-winning amount does not include the radio frequency use charge.

5. Amounts collected from auctions must be paid into the state budget. Priority will be given to the use of these amounts for developing telecommunications infrastructure and provide universal telecommunications and broadcasting services under Prime Minister-approved projects.

Article 19. Grant of radio frequency use licenses and telecommunications licenses

1. An auction winner shall comply with the laws on telecommunications and radio frequency and the requirements stated in the bidding in order to be granted a radio frequency use license or telecommunications license.

2. The validity duration of a telecommuni­cations license or radio frequency use license complies with the law on telecommunications or radio frequency.

Article 20. Revocation of licenses to use radio frequency

1. An auction winner that has its radio frequency use license revoked under Article 23 of the Law on Radio Frequency or, in the case specified in Clause 3, Article 18 of this Decree, will not have its paid auction-winning amount and radio frequency use charge refunded.

2. An auction winner that has its radio frequency use license revoked for the implementation of a master plan in the cases specified in Article 12 of the Law on Radio Frequency will be compensated under law.

Article 21. Responsibilities of auction winners

An auction winner has the following responsibilities:

1. To fully pay the auction-winning amount according to the method, time and place stated in the bidding dossier.

2. To observe its commitment document and pay a fine for breaching its commitment.

3. To comply with the law on radio frequency.

4. To pay a fee for radio frequency use licensing and a charge for radio frequency use under law.

5. To fulfill other obligations as provided by law.

Article 22. Handling of auction-related violations

1. An auction council that violates this Decision shall be administratively sanctioned; if causing any damage, it shall pay compensations therefor under law.

2. Auction council members and related persons who fail to discharge their assigned duties or abuse their positions and powers and deliberately act against auction regulations, causing damage to the State and related parties, shall, depending on the seriousness of their violations, be disciplined, administratively sanctioned or examined for penal liability.

3. A bidder that violates the provisions of this Decision shall, depending on the nature and seriousness of its violation, be administratively sanctioned or examined for penal liability; if causing any damage, it shall pay compensations therefor under law.

4. Acts of administrative violation, forms, competence and procedures for handling auction-related administrative violations comply with the law on handling of administrative violations in the judicial sector and other relevant laws on handling of administrative violations.

Chapter III

TRANSFER OF THE RIGHT TO USE RADIO FREQUENCY

Article 23. Transfer of the right to use radio frequency

1. An enterprise licensed for radio frequency use through auction may transfer the right to use bands or frequency channels to another enterprise defined in Clause 2 of this Article after having exploited and used such bands or frequency channels for at least three years after being licensed.

2. Eligible transferees of the right to use radio frequency are enterprises providing telecommunication services with infrastructure network and meeting the minimum requirements stated in the bidding dossier of the auction which the transferor participated in.

3. The Ministry of Finance shall assume the prime responsibility for, and coordinate with the Ministry of Information and Communications in, formulating and submitting to competent state agencies for promulgation regulations on a lax on the transfer of the right to use radio frequency.

Article 24. Procedures for transferring the right to use radio frequency

1. The transferor and transferee of the right to use radio frequency shall submit the transfer dossier directly or by post to the Ministry of Information and Communications.

2. A transfer dossier shall be made in one set, comprising the following documents:

a/ The written request for transfer, signed and stamped by the at-law representatives of the transferor and transferee;

b/ The written agreement between the transferor and transferee on assurance of the rights and legitimate interests of organizations and individuals affected by the transfer;

c/ Documents proving the transferee s satisfaction of the minimum requirements at the auction which the transferor participated in and the transferee s commitment document on the continued implementation of the transferor s commitments staled in the bid dossier.

3. Within 45 days after receiving a complete transfer dossier as required, the Ministry of Information and Communications shall check its completeness and accuracy and consider and decide to permit the transfer of the right to use radio frequency and notifies in writing its permission to the enterprises concerned.

In case of refusing to permit the transfer, the Ministry of Information and Communications shall notify in writing its refusal, clearly stating the reason, to the enterprises concerned.

4. The grant of telecommunications licenses and radio frequency use licenses to transferees complies with the laws on telecommunications and radio frequency.

The validity duration of telecommunications licenses and radio frequency use licenses is equal to the remaining validity duration of the licenses already granted to the transferring enterprises.

Article 25. Responsibilities of transferors of the right to use radio frequency

A transferor of the right to use radio frequency has the following responsibilities:

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

2. To fulfill all tax obligations related to the transfer as provided by law.

3. To fully pay a fee for the grant of a radio frequency use license and a radio frequency use charge.

Article 26. Responsibilities of transferees of the right to use radio frequency

A transferee of the right to use radio frequency have the following responsibilities:

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

2. To fulfill all tax obligations related to the transfer as provided by law.

3. To comply with the law on radio frequency.

4. To pay a fee for the grant of a use radio frequency license and a radio frequency use charge as provided by law.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 27. Implementation provisions

1. This Decision takes effect on May 1, 2012.

2. The Minister of Information and Communications shall guide the implementation of this Decision. In special cases related to national defense or security, the Minister of Information and Communications shall report them to the Prime Minister for consideration and decision.

3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and chairpersons of provincial-level People s Committees shall implement this Decision.-