The ACMA would like to thank the stakeholders who have responded to the first two issues papers in the ACMA’s 1800 MHz—A shared strategy consultation. The purpose of this extensive consultation process is to ensure the 1800 MHz band is allocated efficiently in regional and remote areas of Australia, both now and in the future.
The first issues paper Regional and remote apparatus licences in the 1800 MHz band, considered the proposed the release of the 1800 MHz band for PTS apparatus licensing to facilitate the deployment of mobile services throughout regional and remote Australia. The ACMA considered this release to be a short term objective for the band. However, based on regulatory issues raised by respondents to Issues Paper 1, the ACMA intended to hold off the release of this band until the stakeholder views regarding Issues Paper 2 could be determined.
The second issues paper Spectrum licences in the 1800 MHz band considered whether the existing apparatus licensing arrangements would continue to be an efficient arrangement in the band into the future, or whether spectrum licensing arrangements should be considered in regional areas in particular. The ACMA considered that remote areas of Australia would continue to be allocated via the issue of apparatus licences, and that the possible change to licensing arrangements would occur in regional areas.
The ACMA received 14 responses to Issues Paper 1 and eight responses to Issues Paper 2. These responses were from a wide range of stakeholders including the mobile telecommunications industry, the mining sector, government and radiocommunications specialists. The submissions are available on the ACMA's website.
The ACMA has reviewed the information provided in submissions to both Issues Papers and considers that there are technical and regulatory complexities in the 1800 MHz band that may not be easily resolved. The ACMA is of the view that these issues will require further analysis and consultation with affected stakeholders before a decision can be made on the short and longer term planning arrangements for the 1800 MHz band.
Submissions highlighted that current fixed linked services in the band are a key consideration for designing access arrangements for both the short and long term. The impact upon incumbent and potential licensees would vary depending on the status given to fixed links. Some of the issues and concerns associated with a possible change to the status of fixed links were considered when looking at releasing the band for PTS apparatus licensing. However, the majority of submissions for Issues Paper 2 which sought comment on possible different licensing arrangements in the band considered the status of fixed links to remain unchanged (co-primary). This assumption somewhat counters the narrative from Issues Paper 1 which proposed that the status of fixed links change from primary to secondary or that the service be cleared from the band altogether.
Issues Paper 2 produced very different responses from the mobile telecommunication companies who hold different amounts of spectrum in metropolitan and some regional areas of the band already. The three carriers sought different outcomes for the band. Telstra were looking to maintain apparatus licensing in the band for regional and remotes areas. VHA wanted to delay spectrum licensing to coincide with the future expiry of spectrum licences in 2028. Optus, on the other hand, wanted to progress preparations for spectrum licensing in these areas as soon as practicable.
It is important to note that the status of fixed links is yet to be decided by the ACMA. The ACMA is undertaking additional analysis of the use and location of current fixed links in regional and remote areas of the band. The ACMA’s analysis will be used to inform assessments of the impact of the existing services on the proposed licensing arrangements for PTS apparatus licences in the short term, or spectrum licensing in the longer term. This would help to enable and encourage spectrum to move to its highest value use or uses.
Given the responses from Issues Papers 2 the ACMA also intends engaging the mobile carriers in roundtable discussions to decide what would be the best solution for mobile telecommunications access to regional areas. These discussions will be around possible options how best to apportion some of the spectrum in regional areas between the three carriers. The proposed priority assignment arrangements for remote areas were less contentious.
The ACMA expect to release a response paper that will present further information on a possible way forward, especially for regional areas of the 1800 MHz band in Q3 2013.
Summary of key points raised in submissions
Issues paper 1
Demand for 1800 MHz spectrum in regional and remote Australia
- Respondents generally agreed with the ACMA’s assessment of demand.
- Some respondents noted that the current use of the band for backhaul services using fixed links was not sufficiently recognised.
- Oil and gas companies may also have a future interest in this band.
Short-term licensing arrangements
- The proposed PTS apparatus licensing arrangements were generally considered to be the most appropriate means to facilitate access to the band in the short term.
- The PTS apparatus licensing option may be the preferred option for the longer term.
- Several respondents noted the importance of certainty around licensing arrangements into the future to support industry investment in this band.
Status of fixed links
- Existing fixed link licensees consider fixed services should retain co-primary status. This is because these services used to provide essential communications and safety services in regional and remote areas.
- Most respondents supported changing the status of fixed services to secondary, which would require fixed services to make adjustments to coordinate with incoming PTS services. Respondents argued this was the best way to facilitate the deployment of new LTE services without unnecessarily affecting existing fixed links.
- Those fixed services that would not limit the deployment of new services could remain indefinitely.
- Most respondents considered that clearing fixed links from the band creates operating costs for current licensees.
- Many supported the long-term relocation of fixed services to other bands via a staged geographically-differentiated transitional approach.
- This could be achieved by replacing fixed links with alternative technologies.
- All respondents supported the introduction of assignment priorities to promote an orderly release of spectrum to the market.
- Several respondents observed that investment in the band would be hampered if there was uncertainty around access to spectrum in the longer term after the initial release of spectrum.
- Several respondents suggested that prospective licensees should be able to access spectrum that has been prioritised for another user if it remains unused for a period of time. Respondents considered that one to five years would be a reasonable period of time.
- Respondents requested clarification of what was meant by ‘infrastructure’, ‘rail’ and ‘other’ in the ACMA’s priority assignment models.
- Mobile carriers argued for the models that assigned more spectrum to the three mobile carriers. All other respondents argued for models that provided more spectrum for other users.
- Telstra objected to models that factored its existing spectrum licence holdings into the assignments.
- Several respondents argued that demand from the different sectors will be different in regional as opposed to remote Australia—demand for mobile broadband will be higher in regional than remote areas and demand from mining and support industries will be higher in remote than regional areas. Respondents argued this should be reflected in the assignment models.
- There was broad support for the ‘tilted annuity’ approach to the annualisation of the spectrum access charge set in the minister’s spectrum access charge direction as a basis for establishing an apparatus licence tax; although a number of respondents argued that only a pre-tax basis was correct.
- Some respondents argued that the apparatus licence tax should be based only on what they referred to as the opportunity cost component of the minister’s spectrum access charge.
- Some respondents argued that certain components of the minister’s spectrum access charge need to be removed before annualisation as they were considered not to be relevant for apparatus licences.
- A number of respondents argued that the minister’s spectrum access charge reflects a valuation appropriate for metropolitan spectrum licences only and the value and opportunity cost of regional and remote spectrum is lower.
- There was a range of views about the appropriateness of an LGA-based population estimates in calculating apparatus licence taxes for PTS licences. There was some support for continuing to apply LGA-based population estimates in apparatus licence taxes.
- The rail and infrastructure respondents argued against applying LGA’s on the basis that it did not reflect their business models or valuations but those of mobile network operators.
- Telstra, Optus and AMTA argued that moving to the ASMG/HCIS was the preferred option.
Issues paper 2
Preferred licence type for prospective operators
- There was general support for apparatus licensing as the preferred and most appropriate license type for services in regional and remote areas. Most respondents were of the view that spectrum use is most likely to be limited to distinct geographic locations rather than across the full regional and remote area. Apparatus licensing would be able to meet these requirements.
- Some stakeholders would like to see further developments in shared spectrum access arrangements to meet demand rather than a single licensing arrangement.
Extension of spectrum licensing
- There was limited support for an extension of spectrum licensing into either regional or remote areas.
- Mobile telecommunications companies had different views on the possibility of extending spectrum licensing as different companies hold different amounts of spectrum in the band already. These were:
- Telstra would prefer for the band to remain apparatus licensed;
- VHA suggested that any move on spectrum licensing be performed after the 15 year re-issued spectrum licences in the band had expired. This would be in 2028; and
- Optus wanted spectrum licensing to be commenced as soon as possible.
Options for future licensing arrangements
- There was some consensus that flexible licensing arrangements should be considered for regional and remote areas. This would allow for different geographic locations to have different licensing arrangements.
- Respondents differed on the level of demand for spectrum licensing outside of particular regional locations with larger populations.
Method of transition to spectrum licensing
- Those submissions that provided a response on this matter considered designation the preferred method if spectrum licensing had to be undertaken.