Government mulls spectrum access overhaul

Convergence Review recommendations considered.

The Department of Broadband has begun consulting with telcos and broadcasters on a major overhaul to spectrum licensing policy in a bid to create a consistent method of allocating radio licenses.

In the first indication of a move to accept some of the Convergence Review's recommendations since the release of the final report in April, department secretary Peter Harris said the Government had come to realise a need to change controls on spectrum licensing and management.

The department has opened a new web portal and introduced three introductory papers calling for comment on overhauls to spectrum license management and the priority on which spectrum bands to consider.

In what Harris called "Government 2.0 in potential operation", the portal would become home to additional discussion papers over the coming year as the Government formulates new policy on spectrum management.

Harris told attendees of the Australian Communications and Media Authority's annual radiocommunications conference this week that spectrum reform was necessary to "support one of the fastest growing areas in the economy" and to avoid further scrutiny on those deemed to be using spectrum inefficiently.

Harris said the previous spectrum policy of getting the best bang for buck out of license allocations had to change to ensure it did not "impede a move toward more efficient delivery" of broadcast and entertainment services.

The department is considering recommendations outlined in the Convergence Review, and which the Government is yet to formally respond to.

The review, which focused on a new regulation scheme for content makers and broadcasters, also recommended:

• A unified approach to allocating and licensing spectrum for all uses
• A single piece of legislation for broadcasting and communications
• Allowing spectrum holders to sell or lease unused portions of their spectrum at their own will

"The general conclusion of the [Convergence] Review is inarguable; we will have to revise our approach to allocation and will increasingly apply market-based concepts to spectrum that was previously treated as in some way special," Harris said.

But he said the Convergence Review "stopped short of solving the problem".

"The time is probably upon us for a new target; a regulatory structure better able to choose between competing users, each with probably a good case for special treatment," he said.

"We will have to make a choice."

License renewal

Harris slammed the negotiation process undertaken by the department earlier this year to renew 15-year spectrum licenses for Telstra, Optus, Vodafone and vividwireless, calling it "not ... very elegant".

He called for an easier and more predictable method of renewing licenses, as recommended in the review.

One method of determining efficient use of spectrum, he suggested, was to judge a license holder's stocks against its profitability immediately before spectrum renewal.

However, he also argued that public interest cases would require further examination, as they would be less able to prove efficient or profitable uses of that spectrum; again a core recommendation of the review.

Those seeking access to spectrum on a public interest basis in recent years – such as a $500 million railway safety system and a unified emergency services communication network – have complained over being sidelined for lucrative spectrum stocks which would otherwise garner more money for Government at auction.

"The model of regulation therefore likely to be used will not necessarily be loved by lawyers; it is likely to involve more discretion, more judgment, as well as more market orientation," Harris said.

"We will need greater flexibility to allow for the unseen."

Welcome news

ACMA chairman Chris Chapman welcomed the news, despite it potentially involving the transition of spectrum duties to a new regulatory body also outlined in the Convergence Review's final report.

"The status quo is not going to get us through," he told iTnews.

"In the next few years we need to stick to the current paradigms, but we need to transition to new paradigms.

"We're going to have a much more enlightened, flexible radiocommunications network that facilitates, effectively, a great deal more sharing than currently exists; I don't think there's any escaping that reality."

He said "everything is on the table" in consideration of new methods of allocating and renewing spectrum licenses but that the regulator would remain "obsessive" about delivering its current mandate.

2G contradiction?

The moves come as part of an attempt to find an additional 300 MHz of spectrum by 2020 for mobile broadband use, approximately half of which will be distributed as part of the digital dividend auction at the end of the year.

But Chapman told iTnews that mobile telcos had to avoid a potential contradiction of calling for more spectrum – including the early release of digital dividend spectrum – while continuing to run legacy 2G networks in spectrum that could otherwise be repurposed for 4G use.

"I think, as a gross generalisation, the telcos have been historically slower to respond, but I detect a complete mindset change," he said.

"I think all three major telcos realise the dimension of the challenges."

Telstra has since begun exploring the use of a portion of its 900 MHz spectrum licenses – used to serve 15 percent of its customer base with 2G – for future LTE use.