Spectrum licensing offers a more flexible approach to spectrum allocation and enables licensees to change their service over time as market conditions change, and respond more quickly to technological innovation without having to seek government approval.
Spectrum licences are tradeable in part or whole to third parties by geographic area, bandwidth or both and can be amalgamated or divided, subject to ongoing compliance with the interference management framework established by the ACMA. A licensee can extend the geographic coverage or bandwidth of their licence by acquiring an adjacent spectrum licence from another licensee and combining two licences into one.
To enable the efficient trading and allocation of spectrum licences the ACMA permits spectrum space to be bought and sold in terms of standard trading units (STUs).
Standard trading units
Licensees who wish to trade part of a licence can divide the licence into its component STUs and offer them for sale individually or in multiples. A single STU is the smallest unit of spectrum space for which the ACMA will register a trade and issue or vary a licence - provided that the resulting new or varied licence meets the minimum contiguous bandwidth (MCB).
STUs may be visualised as cubes of spectrum space that cover a geographic area horizontally and bandwidth vertically. The geographic area is equal to a cell of the spectrum map grid published by the ACMA. Cells of the spectrum map grid vary in size according to the population density area in which they are located, as shown below:
| Population density area | Map grid | Approximate area |
|---|---|---|
| outback | 3 degrees of arc | 330 x 330 km |
| rural | 1 degree of arc | 110 x 110 km |
| metro and regional | 5 minutes of arc | 9 x 9 km |
The frequency bandwidths of STUs vary in size according to the band in which licences are issued. A key objective in choosing the STU bandwidth is to provide licensees flexibility in channelling, guard band arrangements and secondary trading. In general, greater flexibility is provided by the choice of a narrower STU bandwidth. However, this leads to the need for a technical framework with tighter controls to manage interference between adjacent licensees, and to assist in maximising spectrum reuse.
The disadvantages of a narrow STU bandwidth can be offset by specifying a minimum contiguous bandwidth. Typically the minimum contiguous bandwidth under a spectrum licence is chosen to meet both technical requirements and marketing goals. From a technical perspective, the minimum contiguous bandwidth should be sufficient to support a viable service.
Of itself, an STU may be too small to have much utility, but because of its regular shape, it can be stacked with neighbouring STUs vertically to provide increased bandwidth or horizontally to cover a larger area.
This can then form bodies of spectrum space that allow spectrum licences to be combined and subdivided according to market needs. The more STUs are stacked, the greater the utility of the spectrum space that is thereby licensed.
Minimum contiguous bandwidth
An STU is the minimum bandwidth segment and geographic area of the spectrum that can be traded, but trading may be further restricted by the need to comply with minimum contiguous bandwidth (MCB) for a licence.
The concept of an MCB1 was introduced to avoid situations where trading in spectrum leads to the issue of licences too small to be practical. This would result in inefficient use of spectrum and unnecessary administrative costs. The choice of the MCB for a band sets the maximum number of frequency boundaries that are permitted within the spectrum. Small MCBs require more complex technical frameworks to manage interference across the larger number of possible frequency boundaries. On the other hand, the MCB chosen must be compatible with the necessary bandwidths of likely applications of the band to allow all of the licensed bandwidth to be used.
As defined in the Radiocommunications (Trading Rules for Spectrum Licences) Determination 1998 (the trading rules) the imposition of an MCB allows spectrum to be traded down to the STU, but only if it can be aggregated to a licence bandwidth not less than that set out in the trading rules.
STUs and MCBs for spectrum licensed bands are:
| Band | STU | MCB |
|---|---|---|
| 500 MHz | 12.5 kHz | not set - therefore same as STU |
| 800 MHz | 0.25 MHz | 1 MHz |
| 1800 MHz | 2.5 MHz | not set - therefore same as STU |
| 2 GHz | 0.25 MHz | 5 MHz |
| 2.3 GHz | 3.5 MHz | 3.5 MHz |
| 3.4 GHz | 0.25 MHz | 2.5 MHz |
1 See ACA Discussion Paper No. 1, Technical Liaison Group (3.4 GHz), Design Options for the Technical Framework for 3.4 GHz Spectrum Licences, 1 October 1998 for further discussion.
| Band | STU | MCB |
|---|---|---|
| 27 GHz | 50 MHz | not set - therefore same as STU |
| 28/31 MHz | 50 MHz | not set - therefore same as STU |
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