3g-g
8th February 2006, 12:07 AM
We all know that the operators in the UK paid a whole wad of cash for those 3G licences, now it seems they want some of the money back.
I somehow can't see the government backing down on this one, however, it's not just in the UK that this issue has been brought up. It seems some other European governments may have been acting a bit shify with their sales of spectrum. I imagine that the people in charge of the sale of the licences knew fine well how much money they could get for these and that's why they were offered in an auction format, as one of the judges quite righty points out, "the government is selling a scarce resource [as the RF spectrum currently is] in a market that it has created". It's almost like it's been set up deliberately to create as much money as possible.
The original is here. (http://www.cellular-news.com/story/15993.php)
In Europe's top court, mobile telephone companies Tuesday accused European governments of acting like private companies, not regulators, and making too much profit from selling EUR109 billion of third-generation licenses.
Like any other company, the mobile operators now say they are owed billions in value-added tax rebates. A final ruling on the case, which is likely to have precedent-setting importance for operators across Europe, will come at the end of the year.
While judges at the European Court of Justice gave only a few hints of their leanings, one suggested that the operators may have a case. "Is it not legitimate to look at this step on its own and as an economic activity?" Judge Konrad Schiemann asked. "The government sells a scarce resource on a market it has created."
In response, lawyers representing the governments maintained that granting telecom licenses was no different from granting driver's licenses - they said they received fees, not a price, in return. Operators must "pay what they think it's really worth," the attorney representing the U.K. said.
The case started when the U.K. and Austrian governments rejected requests by a number of the operators for a VAT refund. The five U.K. operators, which include Hutchison Whampoa and Vodafone, have demanded a GBP3.3 billion tax rebate. The eight Austrian companies, which include Deutsche Telekom's T-Mobile and Mobilcom Austria, asked to be paid back EUR140 million.
Operators asked the court to view the sale as a regular business transaction - such transactions almost always include a VAT in the final bill, which is returned for business expenses. In addition, European Union VAT legislation lists telecoms as one area where governments can be treated like commercial companies.
Only EUR9.5 million of the EUR38 billion "raised in the U.K. were used to support telecommunications regulation," said Paul Lasok of Monckton Chambers law firm, who represents a group of U.K. mobile operators.
The outcome of the case is also important for countries that didn't use auctions to sell third-generation licenses. Spain, for example, used another method, and won much less income than than the U.K..
"If the court decides governments acted as commercial entities, that could go for those who didn't use auctions," said Imke Gerdes, a lawyer for Baker & McKenzie in Vienna, who represented a mobile phone operator that first raised the issue in an Austrian court.
I somehow can't see the government backing down on this one, however, it's not just in the UK that this issue has been brought up. It seems some other European governments may have been acting a bit shify with their sales of spectrum. I imagine that the people in charge of the sale of the licences knew fine well how much money they could get for these and that's why they were offered in an auction format, as one of the judges quite righty points out, "the government is selling a scarce resource [as the RF spectrum currently is] in a market that it has created". It's almost like it's been set up deliberately to create as much money as possible.
The original is here. (http://www.cellular-news.com/story/15993.php)
In Europe's top court, mobile telephone companies Tuesday accused European governments of acting like private companies, not regulators, and making too much profit from selling EUR109 billion of third-generation licenses.
Like any other company, the mobile operators now say they are owed billions in value-added tax rebates. A final ruling on the case, which is likely to have precedent-setting importance for operators across Europe, will come at the end of the year.
While judges at the European Court of Justice gave only a few hints of their leanings, one suggested that the operators may have a case. "Is it not legitimate to look at this step on its own and as an economic activity?" Judge Konrad Schiemann asked. "The government sells a scarce resource on a market it has created."
In response, lawyers representing the governments maintained that granting telecom licenses was no different from granting driver's licenses - they said they received fees, not a price, in return. Operators must "pay what they think it's really worth," the attorney representing the U.K. said.
The case started when the U.K. and Austrian governments rejected requests by a number of the operators for a VAT refund. The five U.K. operators, which include Hutchison Whampoa and Vodafone, have demanded a GBP3.3 billion tax rebate. The eight Austrian companies, which include Deutsche Telekom's T-Mobile and Mobilcom Austria, asked to be paid back EUR140 million.
Operators asked the court to view the sale as a regular business transaction - such transactions almost always include a VAT in the final bill, which is returned for business expenses. In addition, European Union VAT legislation lists telecoms as one area where governments can be treated like commercial companies.
Only EUR9.5 million of the EUR38 billion "raised in the U.K. were used to support telecommunications regulation," said Paul Lasok of Monckton Chambers law firm, who represents a group of U.K. mobile operators.
The outcome of the case is also important for countries that didn't use auctions to sell third-generation licenses. Spain, for example, used another method, and won much less income than than the U.K..
"If the court decides governments acted as commercial entities, that could go for those who didn't use auctions," said Imke Gerdes, a lawyer for Baker & McKenzie in Vienna, who represented a mobile phone operator that first raised the issue in an Austrian court.