Spectrum licensing FAQs | ACMA

Spectrum licensing FAQs

Read on to learn more about spectrum licences, why they exist, how they are allocated and how they operate compared to other licence options.


Why is radiocommunications regulation included as part of the government's economic reform agenda?

The use of the spectrum is an essential part of the national infrastructure and it is vital to Australia's continued strong economic development that it is utilised fully and efficiently. The Australian Communications and Media Authority (the ACMA) is responsible for ensuring that the regulations it makes contribute to the realisation of the Government's social and economic policy objectives and do not impose unnecessary costs on industry or inhibit competition.

Why is it necessary for government to regulate radiocommunications in Australia?

The size, diversity and needs of the spectrum market make it impractical for coordinated private management of interference within and across all bands. Even if a fully functioning self-regulating market for spectrum existed there would still be a need for some administrative allocations of spectrum to meet Australia's obligations under international agreements, and to ensure spectrum is allocated for national defence, emergency services and other important public services.

What are the market-based reforms to spectrum management introduced in the Radiocommunications Act 1992?

The Government introduced:

  1. economically efficient pricing of radiofrequency spectrum

  2. price-based allocation of radiocommunications licences (through auction where there is excess demand)

  3. implementation of spectrum licensing – the world's first fully tradeable and technology neutral spectrum access right, available for a fixed term.

What is economically efficient pricing?

Economically efficient pricing is the pricing of spectrum access rights designed to maximise the benefit from the use of scarce spectrum and therefore the value of the total output of goods and services across the national economy.

According to the theory of market economics, the pricing of spectrum is a central determinant of its effective use. In a perfect market, price is based on opportunity cost – the value of the best alternative use of the spectrum forgone. If there is no scarcity, that is, demand can be met by available supply, then price should be limited to the recovery of the regulator's costs.

What is a price-based allocation of spectrum?

It is the allocation of a licence by auction, tender, pre-determined price or negotiated price. This contrasts with auctions by other means, such as a lottery, a queuing system (such as first come first served) or an administrative system like a 'beauty contest'. A beauty contest is where tenders are evaluated against policy criteria other than price alone, such as the social benefits of the service proposed, the commercial status and viability of the tenderer, and other criteria.

How was spectrum allocated before the reforms of 1992?

Spectrum use was determined according to spectrum plans for each band which were made by a central regulator – the then Spectrum Management Agency (SMA). Licences were issued over the counter on a first come first served basis with prices set on the basis of administrative cost recovery rather than market value. This made it difficult for spectrum to be allocated to its most valued uses and inhibited the adoption of new technologies.

What are the essential differences between an apparatus licence and a spectrum licence?

An apparatus licence authorises the operation of an individual device or type of device or devices at a particular location or locations and with specified output characteristics to deliver an approved service. Apparatus licences are generally purchased over the counter for a fixed fee for a maximum of 5 years and the licensee has no legal right to trade the licence. You may only transfer (sell) your licence to other operators with the prior approval of the ACMA. However, in practice, apparatus licensees trade their licences whenever they wish, as the ACMA encourages licence trading.

A spectrum licence authorises the operation of a device or devices within a defined spectrum space (geographic area and frequency band) provided the devices deployed in the spectrum space comply with their licence conditions and the technical framework established by the ACMA for the band. Spectrum licences expire after 15 years, but you have the right to trade your licence in whole or part at any time during your licence period. Even so, a trade only becomes effective from the date it is included in the radiocommunications licence register following notification of the trade to the ACMA by both the seller and the buyer.

Unlike some overseas administrations, the ACMA does not impose a rollout requirement on spectrum licensees. This means that you are under no obligation to actually deliver a service within the period of your licence (up to 15 years). It might be objected that the absence of a rollout requirement encourages spectrum hoarding and may thus inhibit introduction of new services. However, in practice there is little or no evidence of hoarding of spectrum licences issued through price-based allocations.

Where licenses have been under-utilised after allocation (e.g. 27 GHz band) this has been due to technology or commercial failure, rather than hoarding for speculative purposes. To impose an arbitrary rollout deadline reduces the flexibility afforded to licensees to bring their service to market when they assess the time is right commercially. The Trade Practices Act enables action against licensees where there is evidence that they are hoarding spectrum for anti-competitive reasons, such as to block a competitor from access to spectrum. Even where a rollout requirement is imposed, the definition of what constitutes a satisfactory rollout is often highly problematic and difficult to verify in practice.

What are the essential differences between a class licence and a spectrum licence?

Under a class licence, all users operate in the same spectrum segment on a shared basis and are subject to the same licence conditions. These conditions prescribe the frequencies that may be used, common equipment standards and any other relevant technical and operational parameters. As a class licence is not issued to individuals, class licences do not have to be applied for and no licence fees are payable. They automatically authorise anyone to use complying devices on a no interference/no protection basis within the band. They are typically used for remote locking devices (for vehicles and garage doors), wireless headsets for mobile phones, remote control for TV, CB radio operation, WiFi and much more.

Class licences are issued by the ACMA by a notice published in the Commonwealth of Australia Gazette. Class licences generally commence on the day after they are registered under the Legislative Instruments Act 2003.

What are the core conditions of a spectrum licence?

The core conditions define the essential spectrum licence asset or set of property rights represented by the spectrum licence. In technical terms they specify the geographic area and frequency range of the licence, as well as the maximum permitted emission levels at the frequency and geographic boundaries of the licence. See s.66 of the Radiocommunications Act 1992 (the Act).

Why do spectrum licensees have to register their devices with the ACMA?

Complying with the core conditions of a spectrum licence does not by itself guarantee unacceptable interference will not be caused by transmitter devices deployed in the band. Devices must also be issued with a certificate in accordance with the Radiocommunications (section 145(3) Certificates) Determination 2012 which ensures they operate within interference protection levels established by the ACMA for each band or that an agreement exists with all affected licensees when this is not the case. This must be performed for each device that is not exempt from registration.

By registering their devices on the ACMA's public register of licences, licensees are recording the fact that their devices are set up to operate within their licence conditions. It ensures that other licensees in the band can coordinate their devices to minimise interference potential, and it also allows the ACMA to undertake efficient interference investigation and resolution in response to interference complaints.

The effect of certified registration in a public data base (the Radiocommunications Licence Register) is to create an unambiguous chain of legal liability for management of interference to and from spectrum licences.

What is an interference impact certificate (IIC)?

Through common usage, the term IIC has come to mean the certification on the R070 form (Application for Device Registration Form) stating that the device complies with one of the certification options detailed in the Radiocommunications (section 145(3) Certificates) Determination 2012. This means that (assuming the device also complies with all other licence conditions) the device is deemed not to cause unacceptable interference. An IIC is submitted by an accredited person on behalf of a licensee with an application to register a device under a spectrum licence.

Devices can be issued with an IIC only if the accredited person warrants that:

  1. the device complies with the relevant s.145(4) determination made for the band

  2. sufficient internal guard space has been allocated to mitigate potential interference to neighbours

  3. all affected adjacent licensees provide written agreement to accept a higher level of interference (usually in return for payment of a commercial fee).

Guidance on the registrations of radiocommunications devices under the guard space and agreement certification options is provided in the information paper Registration of radiocommunications devices under spectrum licences (Word [.docx] or PDF formats).

What is the technical framework for a spectrum licensed band?

The technical framework for a spectrum licensed band is the set of technical rules made by the ACMA for operation within the band. It consists of three regulatory elements:

  1. licence core conditions made under s.66 of the Act

  2. a determination of unacceptable interference for the purpose of device registration, made under s.145(4)

  3. radiocommunications advisory guidelines made under s.262.

The theoretical ideal for spectrum licensing is technical neutrality since this will allow maximum flexibility of use. Technical neutrality simply means that the technical framework does not favour any particular technology or type of service. The object of technical neutrality is to give the market maximum flexibility to decide which technologies to adopt and what services to provide.

However, in practice no technical framework can ever achieve the theoretical ideal of technical neutrality, because of the limitations inherent in the laws of physics. Every technical framework has some inherent bias towards an expected or anticipated use of the band.

This unavoidable technical bias does not mean that licensees are prohibited from deploying other uses, services or technologies but it does mean that other services may not work as efficiently because the technical framework is set up to optimise a different type of service or technology. Technical frameworks are typically developed through a joint ACMA/industry working group in the period leading up to a spectrum licence allocation. Technical frameworks have been modified in a few bands after the allocation of licences where all licensees in the band agree on desirable changes. See s.72 and s.73 of the Act on licence conditions.

What is a spectrum sharing agreement?

A spectrum sharing agreement is between two adjacent spectrum licensees which allows one licensee to exceed the prescribed emission levels across their geographic border with an adjacent spectrum licensee (as calculated in terms of the device boundary criterion under the relevant s.145 (4) determination), usually in exchange for a payment or some other commercial consideration. However, a spectrum sharing agreement does not allow you to exceed the core conditions of your licence. More information on the registrations of radiocommunications devices via spectrum sharing agreements is in the information paper Registration of radiocommunications devices under spectrum licences (Word [.docx] or PDF formats).

What is a core conditions agreement?

A core conditions agreement is between spectrum licensees which the ACMA accepts in order to register devices whose emissions exceed their core licence conditions. A core conditions agreement cannot be used to authorise the operation of devices sited outside the geographic area of their licence or with a centre frequency outside the frequency range of their licence. A core conditions agreement template has been included in every spectrum licence issued since December 2000. More information on the registrations of radiocommunications devices via core condition agreements is provided in the information paper Registration of radiocommunications devices under spectrum licences (Word [.docx] or PDF formats).

What is a third party agreement?

It is a commercial agreement between a spectrum licensee and another person which authorises the other person to operate a device within the licensee's spectrum space. However, the spectrum licensee remains responsible for device registration by third parties and for ensuring that third parties comply with licence conditions.

Why does the ACMA allocate spectrum licences by auction?

Where demand outstrips supply, the auction mechanism ensures that the available spectrum is allocated to those bidders who value it the most. The assumption is that the willingness to pay for the spectrum is a measure of the value of the service for which the spectrum will be used if acquired (opportunity cost).

In policy terms, auctions are the simplest and most transparent method of allocating resources where there is competing demand.

What auction formats does the ACMA use?

The ACMA may use any of these auction types to conduct spectrum auctions:

  1. open ascending-bid, also known as English open-outcry

  2. simultaneous multi-round ascending

  3. combinatorial clock.

Further details about these auction formats are available from Types of auctions.

What is the difference between a re-allocation and a conversion of a spectrum licence?

These are both methods for allocating spectrum licences.

A re-allocation is where a band, which is currently populated with apparatus licensees, is first cleared of those licensees (after a suitable notice period) and then made available for allocation via spectrum licences, using a competitive price-based mechanism. See s.39A.and Part 3.6 of the Act.

A conversion is where existing apparatus licence incumbents in the band are offered a spectrum licence for a pre-determined price to replace their existing apparatus licences. See s.36, 38, ss.52-59.

Where unencumbered spectrum is designated for spectrum licensing (s.36) the allocation of the licences is then made in accordance with procedures set out in a marketing plan. See s.39.


Last updated: 05 December 2017