Feedback sought on proposed lot configuration—700 MHz and 2.5 GHz bands | ACMA

Feedback sought on proposed lot configuration—700 MHz and 2.5 GHz bands

This preliminary consultation has ended. A summary of the stakeholder feedback received by the ACMA on its proposed lot configurations in the 700 and 2.5 GHz bands is available here.

The ACMA has formed a proposed approach to lot configuration in the 700 MHz and 2.5 GHz bands for the digital dividend auction. This approach has been informed by responses to informal consultation on this issue in November 2011.

We are now seeking further feedback on the details of this approach, including the location of proposed market areas for the 2.5 GHz band.

Background

In November 2011, we sought feedback and views from external stakeholders on the most appropriate lot configuration for the digital dividend auction.

We received three submissions in response to the consultation, which highlighted stakeholders' preferred lot configuration for 700 MHz and 2.5 GHz spectrum. This feedback has helped us form a preliminary proposed approach on this issue, which may be refined before it is incorporated into our draft marketing plan for the auction. A summary of the submissions and the proposed approach is described below.

700 MHz band lot configuration

All submitters preferred a national lot structure for spectrum in the 700 MHz band, comprising 5 MHz paired frequency lots and a national market area covering all of Australia. Submitters favoured this approach for the following reasons:

Frequency lots

  • Frequency lots of 5 MHz paired are considered to be an optimal size, as larger lot sizes of 10 MHz paired would not fit into the band plan.
  • Frequency lot sizes of less than 5 MHz paired are inappropriate for either 3G or 4G technologies.
  • Frequency lot sizes of more than 10 MHz paired would dictate certain market outcomes and limit the flexibility of auction participants to bid on the most suitable quantity of spectrum for their business needs.

Geographic market area

  • National geographic market areas are highly suited to the 700 MHz band's propagation characteristics, including the ability to provide service coverage over large areas.
  • National geographic market areas do not create the risk of gaps in roaming coverage for customers on national networks.
  • National geographic market areas are preferred in the 700 MHz band as this would provide the best foundation for a national mobile network, and the economic value of this band may be lost through fragmented geographic lots.

The ACMA proposes to incorporate this approach of a national lot configuration with 5 MHz paired frequency lots into the draft allocation instruments, scheduled for release in March 2012.

Figure 1: Proposed 700 MHz national market area

 

2.5 GHz band lot configuration

For the 2.5 GHz band, the three submitters preferred different lot configuration scenarios.

One submitter preferred a national lot structure because it believes that:

  • the Australian market is not conducive to the deployment of regional mobile networks
  • a disaggregated lot structure would complicate the auction without achieving any useful long-term outcome.

The remaining two submitters favoured a disaggregated lot structure on the basis that:

  • the 2.5 GHz band is more likely to be used to provide support/capacity for the delivery of LTE services, rather than to provide the foundation of a national LTE network
  • requirements for the 2.5 GHz band are unlikely to be uniform across Australia; higher value may be placed on 2.5 GHz spectrum in regional and remote areas, and in select capital cities.

One submitter expressed a preference for eight metropolitan areas, two regional areas and one remote market area with 10 MHz-paired frequency lots in each market area.

The other submitters wanted a structure comprising individual metropolitan areas, and an aggregated regional/remote market area, with 5 MHz paired frequency lots in each market area.

After considering these views, the ACMA's preliminary proposed approach in the 2.5 GHz band is a disaggregated lot structure with 5 MHz paired frequency lots in each market area. The disaggregated market areas would include:

  • eight (8) metropolitan areas-ACT, Adelaide, Brisbane, Darwin, Hobart, Melbourne, Perth, Sydney
  • two (2) regional areas-regional eastern Australia, regional western Australia
  • one (1) remote area.

Figure 2: Proposed 2.5 GHz disaggregated market areas

 

One of the key benefits of the Combinatorial clock auction (CCA) methodology, which is being used to allocate 2.5 GHz and 700 MHz band spectrum, is that it allows bidders to bid on packages of lots, in order to acquire the specific combinations that will best meet their business needs. A disaggregated lot structure will enable prospective auction participants to package together metro, regional and remote lots to acquire a 'national lot' in the 2.5 GHz band, while also allowing other bidders the flexibility to acquire lots in disaggregated market areas if that best accommodates their preferred business model.

Similarly, taking into account one submitter's preference for 5 MHz frequency lots in the 2.5 GHz band, the ACMA considers that this will give prospective auction participants greater flexibility to obtain their desired amount of spectrum.

In summary, we propose to proceed with the smallest unit favoured by submitters for both frequency and geographic market area. This means that each submitter will be able to bid in a way that meets their business needs, and those who wish to purchase larger units can simply package multiple lots together.

We will take into consideration the views expressed by stakeholders in response to further consultation before forming a final view on the placement of geographic boundaries in the 2.5 GHz band.

Further consultation on the 2.5 GHz lot configuration

The ACMA is seeking feedback on the most suitable geographic boundaries of the market areas in the 2.5 GHz lot configuration. We specifically invite comment on stakeholders' preferred location of market area boundaries.

To help stakeholders comment on this issue, we have prepared:

  • detailed maps of the disaggregated market areas proposed for the 2.5 GHz band (see below)
  • market area maps for viewing in Google Earth software. To view these, stakeholders will need to download the free Google Earth application and open the following KMZ file.

Stakeholders should be aware that the market area maps shown in Google Earth provide an indicative representation of the location of the market areas and are used for consultation purposes only. Stakeholders should not use Google Earth or the maps shown in this application for any technical planning purposes.

How to submit comments to the ACMA

To submit a response to the ACMA on this matter, email majorspectrumallocations@acma.gov.au. For further information, contact Anna Cheung on (03) 9963 6837 or email majorspectrumallocations@acma.gov.au.

This consultation process will run from 9 February to 20 February 2012.

There will be another opportunity to provide feedback through the draft allocation instruments, which we will release for formal consultation in March 2012. Subscribe to our e-bulletin for notification about the formal consultation process.

Detailed maps of the disaggregated market areas proposed for the 2.5 GHz band

ACT

Adelaide

Brisbane

Darwin

Hobart

Melbourne

Perth

Sydney

Regional eastern Australia

Regional western Australia

Remote Australia

Last updated: 02 May 2017