3.6 GHz band auction: FAQs | ACMA

3.6 GHz band auction: FAQs

The ACMA welcomes questions from stakeholders about the 3.6 GHz band auction. All correspondence is subject to the strict probity arrangements we have in place for the auction, which are designed to ensure it is conducted in a fair and impartial manner.

Generally, responses to any auction-related questions will be available to all stakeholders by publishing them here without attribution.

Stakeholders who consider that the ACMA’s response should not be published (for confidentiality reasons) should notify the ACMA when submitting their query. Any such claims will be considered on a case-by-case basis.

The ACMA notes that it may modify the wording of questions slightly to assist with clarity.

This list of questions is updated from time to time. The last update was 7 November 2018.

Notification: Commencement date of the auction

The 3.6 GHz band spectrum auction will commence on 20 November 2018. The ACMA cannot predict how long the auction will last. The ACMA will publish the results of the auction after its conclusion.

Notification: Apparatus licences issued to NBN Co

On 31 October 2018, NBN Co were issued with further apparatus licences for PMTS Class B services in the 3.4 GHz band.

These licences impact the application of the Radiocommunications (Spectrum Licence Limits 3.6 GHz Band) Direction 2018 to the 3.6 GHz band auction.

The updated allocation limits for the 3.6 GHz band auction are as shown in the table below. Changed values are marked in bold, and coloured blue.

Bidders should note that this table replaces the table below on this FAQ page.

Region

Telstra

Optus

NBN Co

Adelaide

35 MHz

0 MHz

0 MHz

Brisbane

30 MHz

0 MHz

0 MHz

Canberra

30 MHz

0 MHz

0 MHz

Melbourne

60 MHz

0 MHz

0 MHz

Sydney

60 MHz

0 MHz

0 MHz

Perth

30 MHz

0 MHz

0 MHz

North Queensland

50 MHz

80 MHz

0 MHz

Central Queensland

50 MHz

80 MHz

0 MHz

Regional Northern NSW/Southern Qld

50 MHz

80 MHz

0 MHz

Regional Southern/Western NSW

80 MHz

80 MHz

0 MHz

Regional Victoria

50 MHz

80 MHz

0 MHz

Tasmania

50 MHz

80 MHz

0 MHz

Regional South Australia

80 MHz

80 MHz

0 MHz

Regional Western Australia

80 MHz

15 MHz

5 MHz

Notification: ACMA confirms application deadline remains unchanged

There has been speculation that the ACMA may extend the application deadline.

The ACMA confirms that the published timeline for the 3.6 GHz auction remains unchanged. The application deadline for the 3.6 GHz band auction is 5.00pm 31 August 2018. 

Notification: Trade of spectrum between Telstra and NBN Co

Telstra and NBN Co have undertaken trades of spectrum in the 3.4 GHz band in accordance with the Radiocommunications (Trading Rules for Spectrum Licences) Determination 2012.

These trades are shown in the tables below and took effect on Monday 27 August 2018.

Telstra spectrum traded to NBN Co

Licensee Licence number Area Assigned frequency range (MHz)

Telstra Corporation Limited
(ABN 33 051 775 556)

9867486

Perth (Area 1)

3490–3492.5

Cairns (Area 2)

3490–3492.5

Townsville (Area 3)

3490–3492.5

Albury (Area 4)

3490–3492.5

Ballarat, Bendigo (Area 5)

3490–3492.5

NBN Co spectrum traded to Telstra

Licensee Licence number Area Assigned frequency range (MHz)

NBN Co Spectrum Pty Ltd
(ABN 30 094 085 024)

9867483

Adelaide Outer 1 (Area 6)

3542.5–3547

Adelaide Outer 2 (Area 7)

3542.5–3547

Launceston (Area 8)

3542.5–3547

Hobart (Area 9)

3542.5–3547

These trades impact the application of the Radiocommunications (Spectrum Licence Limits 3.6 GHz Band) Direction 2018 to the 3.6 GHz band auction.
The updated allocation limits for the 3.6 GHz band auction are as shown in the table below. Changed values are marked in bold, and coloured blue.
Potential bidders should note that this table replaces Table 9, section 3.2.6 of the auction guide.

Allocation limits for existing relevant band licensees as at 28 August 2018—3.6 GHz band auction

Region Telstra Optus NBN Co

Adelaide

35 MHz

0 MHz

0 MHz

Brisbane

30 MHz

0 MHz

0 MHz

Canberra

30 MHz

0 MHz

0 MHz

Melbourne

60 MHz

0 MHz

0 MHz

Sydney

60 MHz

0 MHz

0 MHz

Perth

30 MHz

0 MHz

0 MHz

North Queensland

50 MHz

80 MHz

0 MHz

Central Queensland

50 MHz

80 MHz

0 MHz

Regional Northern NSW/Southern Qld

50 MHz

80 MHz

0 MHz

Regional Southern/Western NSW

80 MHz

80 MHz

0 MHz

Regional Victoria

50 MHz

80 MHz

0 MHz

Tasmania

50 MHz

80 MHz

0 MHz

Regional South Australia

80 MHz

80 MHz

0 MHz

Regional Western Australia

80 MHz

15 MHz

20 MHz

Will the ACMA will accept Form 2 – Deed of Acknowledgement and Form 3 – Deed of Confidentiality if executed in separate counterparts by the directors of the relevant entity?

Split execution of the Deed by both directors in counterparts will be accepted by the ACMA.

  • Each Director should print and sign a copy of the Deed.
  • Each Director should send a copy of signed Deed to the other director (by scanned copy by email or fax).
  • Each Director should print and sign the scanned or faxed copy of the Deed.
  • Each of these signed Deeds (each with one photocopied signature and one original) should be delivered to the ACMA in accordance with section 7 of the Radiocommunications (Spectrum Licence Allocation — 3.6 GHz Band) Determination 2018.
  • The ACMA will then treat the two Deeds as a single instrument executed by the corporation in accordance with s.127(1) of the Corporations Act 2001.

The auction was originally expected to commence in late October. Why is it necessary to delay it by one month to late November?

The ACMA has extended the period between opening applications and commencing the auction to assist potential bidders with their auction preparations and participation, including by extending the eligibility deadline and providing more opportunity for bidder training with the new auction system.

Why choose to delay the eligibility deadline by a period of four weeks, rather than a shorter period?

In submissions to the consultation on draft auction instruments, several parties sought delays to the auction process. These ranged from a matter of weeks to several months and cited a range of reasons, including finalising their likely demand, arranging eligibility payments, and gaining familiarity with the new auction system. The ACMA responded to the concerns raised in submissions by implementing a two-stage application process, with separate deadlines for the submission of initial applications (application deadline) and the nomination of lots (eligibility deadline). The ACMA decided that a delay of four weeks before the eligibility deadline represented a balance between the differing delay periods proposed in submissions.

When is the earliest that the ACMA thinks the auction could commence?

The ACMA expects that the auction will commence in late November 2018. This will ensure sufficient time is available for completion of training on the auction system.

The ACMA considers it is desirable to provide registered bidders with sufficient opportunity to become familiar with the Enhanced Simultaneous Multi-round Ascending (ESMRA) auction system before the auction commences. The ACMA will therefore offer training on the system to registered bidders, and the opportunity to participate in mock auctions.

Please advise how quickly applications for early access licences could be processed after the auction. Are there steps the ACMA could take beforehand to streamline the process for these applications? For example, would it be possible to make an advance declaration about the 'special circumstances' for issuing such licences?

Section 2.3.3 of the Auction guide for the 3.6 GHz band auction explains that, after the auction, winning bidders may apply to the ACMA to be issued an apparatus licence to access unencumbered spectrum for a period until the spectrum licence commences on 30 March 2020. The Auction guide further explains that such applications will be considered by the ACMA on a case-by-case basis.

There is a legislative requirement under paragraph 153P(2)(e) of the Radiocommunications Act 1992 that the ACMA be satisfied that ‘special circumstances’ of the case justify issuing an apparatus licence in spectrum that is the subject of a spectrum reallocation declaration.

The ACMA has indicated in the Auction guide that it expects to adopt a similar approach to early access after the 3.6 GHz band auction to that employed after the recent 700 MHz unsold lots auction. In that case, the ACMA found that an application to use vacant spectrum by the future owner of the relevant spectrum licence was generally recognised to satisfy special circumstances criteria.
However, it is not appropriate for the ACMA to fetter its future discretion by making an advance declaration that being the future owner of the relevant spectrum licence does definitively satisfy the special circumstances criteria.

The ACMA will however seek to consider any applications for early access licences by winning bidders as quickly as possible after those applications are received.

Are statutory declarations about affiliations under section 32 of the Allocation Determination required in respect of all apparatus licensees in 3.4–3.7 GHz band?

No, section 4 of the Allocation Determination defines an existing relevant band licensee as:

(a)    the licensee of a spectrum licence that authorises the operation of radiocommunications devices; or
(b)   the licensee of a PTS licence for a PMTS Class B service (within the meaning given to those expressions in the Radiocommunications (Interpretation) Determination 2015) that authorises the operation of radiocommunications devices.

Therefore, statutory declarations about affiliations are only required for apparatus licensees of a PTS licence for a PMTS Class B service.

Are Deeds of confidentiality under section 32 of the Allocation Determination required in respect of applicant’s banks, lawyers and professional advisers?

No, subsection 22(3) of the Allocation Determination specifies that Deeds of confidentiality are not required from contractors under a contract:

(a)    for the purpose of obtaining advice relating to the auction from a person in the person’s professional capacity; or
(b)    for the purpose of obtaining finance to make a payment in relation to spectrum licences in the auction.

Can you provide further examples of how the core constraint works in the nearest Vickrey core pricing rule used in the assignment stage?

While the ACMA is trying to be helpful and assist prospective bidders by providing examples, it must stress that the calculation of Vickrey prices is a quite complex matter for humans to do. Mistakes can easily occur when calculations are performed manually and not by bespoke software.
The ACMA recommends prospective bidders obtain independent advice from experts in this field. The rules for the assignment stage are outlined in Schedule 3 of the allocation determination and should not be “reverse engineered” from the examples provided. The rules in Schedule 3 of the allocation determination are authoritative and will prevail in the case of any discrepancies with the examples provided. 

Here are five further examples of how the pricing rule works, focusing on the core constraint.

The no. of lots won for examples 1 and 2:

A: 10, B: 9, C: 6

Example 1:

Bids

A

B

C

ABC

10

0

10

ACB

10

0

0

BAC

0

14

10

BCA

0

14

0

CAB

0

0

13

CBA

0

12

13

Example 2:

Bids

A

B

C

ABC

10

6

10

ACB

10

0

0

BAC

0

14

10

BCA

0

14

0

CAB

0

0

13

CBA

0

12

13

 

Example 1:

Winning bid: CBA: $25

Vickrey prices: A: $0, B: $7, C: $2

Core constraint: reduce each bid by the relevant incremental contribution (A: $0, B: $5, C: $11) to find out the second price.

The table now becomes:

A

B

C

Sum

ABC

10

0

0

10

ACB

10

0

0

10

BAC

0

9

0

9

BCA

0

9

0

9

CAB

0

0

2

2

CBA

0

7

2

9

ABC and ACB are the maximum scenarios with $10. It is greater than the sum of the Vickrey prices ($9), so the Vickrey prices are not in the core. The $1 difference must be shared by the winning bidders B and C in the ratio of their starting prices. Since there are generic lots, prices are the same for all lots, so we can use the ratio of their lots won.

Adjustment (B) = 1*(9/15) = 0.6

Adjustment (C) = 1*(6/15) = 0.4

Therefore, assignment prices are: A: $0, B: $7.6, C: $2.4

Example 2:

Winning bid: ABC: $26

Vickrey prices: A: $9, B: $0, C: $0

Core constraint: reduce each bid by the relevant incremental contribution (A: $1, B: $6,C: $10) to find out the second price.

A

B

C

Sum

ABC

9

0

0

9

ACB

9

0

0

9

BAC

0

8

0

8

BCA

0

8

0

8

CAB

0

0

3

3

CBA

0

6

3

9

ABC, ACB and CBA are the maximum scenarios with $9. This is not greater than sum of Vickrey prices so they are in the core and no adjustment is necessary.

The no. of lots won for examples 3, 4 and 5 are as follows:

A: 12, B: 8, C: 5

Example 3:

Bids

A

B

C

ABC

17

0

0

ACB

17

10

0

BAC

4

0

0

BCA

2

0

0

CAB

6

10

0

CBA

2

0

0


Example 4:

Bids

A

B

C

ABC

14

0

0

ACB

14

2

0

BAC

4

0

0

BCA

2

0

0

CAB

6

2

0

CBA

2

0

0

Example 5:

Bids

A

B

C

ABC

15

0

0

ACB

15

10

0

BAC

4

0

0

BCA

2

0

0

CAB

6

10

0

CBA

2

0

0


Example 3:

Winning bid: ACB: $27

Vickrey prices: A: $0, B: $0, C: $0

The prices are in the core and no adjustment is required.

Example 4:

Winning bid: ACB: $16

Vickrey prices: A: $0, B: $0, C: $0

The prices are in the core and no adjustment is required.

Example 5:

Winning bid: ACB: $25

Vickrey prices: A: $0, B: $0, C: $0

The prices are in the core and no adjustment is required.

Regarding a bidder’s start demand on their eligibility nomination forms,

  1. Is this loaded into the auction system and, if the bidder wishes to reduce this, will they need to place a decrease bid during the auction that may/or may not be fully processed?

  2. Depending on the level of demand, can a bidder potentially end up winning their start demand?

Start demands entered on the eligibility nomination form are binding on the bidder. Any changes to those start demands will need to be entered as decrease or increase bids in the first round, which can be applied in full, in part, or rejected, depending on the level of demand. Therefore, a bidder may end up winning its start demand entered on the eligibility nomination form for a particular product.

Section 3.1.2 of the auction guide (page 40) says that products in the assignment stage will be offered in descending order of the sum of the winning prices and that products with identical outcomes from previous stages may be combined. Is the ordering to be done on the sum of the multiple products, if combined, or simply by the highest of the multiple products?

It is the ACMA’s intention that the ordering of combined products be determined by the aggregate sum of the winning prices. However, as noted on the same page 40 in the auction guide, ‘The ACMA intends for the auction manager to consult with registered bidders on the principles to determine the order of products in the assignment stage before the commencement of the assignment round.’

Can the ACMA please either correct item 3 in Table 1 of Part 4 to confirm the requirement for entry of an ACN in each case, additional to the name of the related body corporate; or revert Part C of the template in Form 8 back to its previous requirement of only needing the name of the related body corporate to be entered, and not its ACN? 

Applicants who are body corporates are required to complete Form 8 as part of their application. Table 1 in Part 4 of Form 1 is a summary of the information that is required, but the actual information that needs to be supplied is outlined in Form 8. This form requires the provision of ACN/ARBN numbers. The ACMA acknowledges that completing Form 8 may require substantial effort and time. However, this information is necessary to ensure compliance with Division 2 of Part 2 of the Allocation Determination, and assists all applicants to accurately cross-check the information and identify if there are any affiliations between the applicants.

Page 64 of the AIP states that:

‘Assignment rounds will be scheduled at the auction manager’s discretion, subject to the following constraints. It is the ACMA’s intention to have a recess of between three to five working days before the assignment stage commences, to enable participating bidders to refine their strategies once they know the results of the primary and secondary stages.’

The Determination says there must be at least two days recess, but three to five days is not necessary and can potentially drag the auction to more than a month, which in turn will risk the auction continuing into the new year. What are your thoughts on this and will the industry will be consulted, along with other auction parameters, closer to the date? 

The auction guide states on page 64, ‘The auction manager intends to consult with registered bidders after the eligibility deadline on the scheduling of the rounds for each stage of the auction, including anticipated recess days, if relevant.’ This remains the ACMA’s intention.

The Radiocommunications (Transmitter Licence Tax) Determination 2015 sets the annual licence tax rate as $0.0039/MHz/pop, with population based on the relevant hierarchical cell identification scheme (HCIS) 2 block where the transmitter is located. Once we have a site registered in a given HCIS L2 block, and paid for the licence in that block, does that cover any number of sites being deployed in that same HCIS L2 block?  For example, do 10 sites in a given HCIS L2 block cost the same as 1 site in that block? 

Yes, the early access fees rules remain the same as in previous auctions—a licensee would pay a single amount for any number of sites in a particular HCIS L2 block.

 

 

 

Last updated: 07 November 2018