South Korea moves to set clear standards for spectrum reassignment fees

The government has launched a formal effort to establish clear pricing criteria for spectrum reassignment fees charged to carriers when previously allocated frequencies expire.

The move comes after years of persistent criticism that fees have been set arbitrarily and without transparency, ultimately pushing the government to act.

Attention is now focused on whether clear standards can be put in place in time for the reassignment of 5G spectrum, which expires in two years.

The Ministry of Science and ICT said Thursday it is launching a research panel and holding a kickoff meeting to overhaul the spectrum reassignment fee calculation system.

The ministry has previously pursued reassignment when spectrum licenses expire, taking into account factors such as consumer protection and service continuity.

The new panel will be composed of experts in law, economics, business and technology. Through the panel, the government plans to comprehensively examine the economic value of spectrum, changes in market and policy conditions, and international trends, with the aim of developing reform measures.

"In the AI era, spectrum has established itself as the neural network through which data flows — a core piece of national competitive infrastructure," the ministry said, explaining the rationale for the reform. "The importance of a reassignment fee calculation framework that rationally reflects economic value has grown."

The core of the reform effort is establishing clear criteria for how spectrum fees are calculated — an issue that has fueled controversy since 2011.

Under the current Radio Waves Act, fees are based in principle on carrier revenue, but specific calculation criteria are not spelled out in law. The government's wide discretion has drawn repeated criticism of arbitrary pricing across all four rounds of spectrum reassignment conducted since 2011.

The most prominent clash came during the 2020 reassignment, when the government and the three major carriers sharply disagreed over the price for reassigning 310 megahertz of 2G-to-4G spectrum. The carriers said the fee should be 1.6 trillion won ($1.13 billion), while the government demanded 4.4 trillion won.

The carriers pushed back so forcefully that they filed an information disclosure request against the government over its pricing methodology — the first time such a request had ever been made in the sector. The dispute was eventually settled at 3.17 trillion won, but calls for a predictable and transparent pricing framework never subsided. Six years on, no such standards have been established.

With the government now belatedly committing to reform, the question is whether clear criteria can be in place before the 5G spectrum reassignment — the first of its kind — comes due in two years.

All three carriers are approaching the first reassignment of their 5G frequencies. The 3.5 GHz band, covering 300 megahertz of bandwidth currently in use, is set to expire in November 2028.

At the time of the original allocation, SK Telecom paid 1.22 trillion won for 100 megahertz and KT Corp paid 968 billion won for 100 megahertz. LG Uplus received 80 megahertz for 809.5 billion won and later acquired an additional 20 megahertz for 152.1 billion won. Whether the reform will produce detailed criteria — such as the weighting given to original auction prices — remains the key issue to watch.