Spectrum allocations should move away from auctions in separate bands to a more holistic holdings approach if the most value is to be given to consumers, Australian Competition and Consumer Commission (ACCC) chair Rod Sims has argued.
During his keynote at the Australian Communications and Media Authority (ACMA) RadComms 2017 conference in Sydney on Wednesday evening, Sims said the regulator has rethought its stance on spectrum in light of the 3.6GHz 5G spectrum allocation process.
“Our past approach to competition limits has been quite simple; we sought to prevent dominance of spectrum by any one licensee in particular bands. We are rethinking this approach,” Sims said.
“The upcoming 3.6GHz allocation is a fascinating case study of why this approach is becoming increasingly fraught. Instead, and this is a key point, we want to consider spectrum holdings holistically rather than in particular bands.”
Communications Minister Mitch Fifield had last month announced the government’s 5G strategy, which stated that a new spectrum management framework will be in place by 2019 and that the ACMA will bring the 3.6GHz spectrum band — which it has been investigating for 5G use — to auction in 2018.
According to Sims, Optus and the National Broadband Network (NBN) company already have “significant holdings” in the 3.6GHz band, with Optus holding all 100MHz in Sydney and Melbourne’s metro areas and NBN holding 100MHz in outer Sydney and Melbourne, while Telstra has smaller holdings across capital cities and regional areas.
While Sims said he doesn’t want to preclude new entrants such as TPG from competing in downstream markets by opening the process to a bidding war, he also said he would not want to “lock out” telcos that already own spectrum from taking part in a 3.6GHz auction — therefore leading to questions on the current process.
“The value of spectrum lies in the economic and social benefits it can provide to citizens and consumers, not in financial returns to the Budget,” Sims argued.
“When governments downplay competition to sell monopoly assets for the highest price, the economy loses out.”
The ACCC is therefore urging the federal government to “think more deeply” about competition impacts of traditional spectrum allocations, “particularly where spectrum is critical for new entrants and to building next-generation networks”.
“We will be strong advocates on this. We will closely monitor whether our regulatory settings promote interconnection between networks, particularly between smaller fixed networks and larger mobile networks,” Sims concluded.
“We want to see incentives for investing in regional mobile coverage and network quality maintained, and we want greater transparency.”
Sims’ comments follow the ACMA last week announcing its 5G spectrum plan in its Five-Year Spectrum Outlook [PDF] (FYSO) and its Draft spectrum reallocation recommendation for the 3.6GHz bandpaper, which discussed the allocation across several spectrum bands in future.
The paper suggested parallel but staggered, separate auctions across the 3.6GHz, millimetre-wave (mmWave), 900MHz, 850MHz, and 1.5GHz spectrum bands over the next three years, as well as the auction announced last month for residual lots in the 1800MHz, 2GHz, 2.3GHz, and 3.4GHz bands.
Communications Minister Mitch Fifield, however, argued on Wednesday that given how Australia’s mobile networks have developed organically to cover 99 percent of the population, “there is no need for the government to take an interventionist role in 5G”.
Fifield said the incoming Radiocommunications Bill — which he also revealed he is aiming to introduce to Parliament next year — will equip the ACMA with being able to deal with 5G spectrum allocation while the government works through the items in its 5G strategy.
“The new RadComms framework will enable the regulator to readily respond to technological developments like 5G, and make necessary planning decisions without overly prescriptive controls,” Fifield said at RadComms 2017.
“The shift to 5G will be dramatic, and we recognise the importance of ensuring that Australia is well positioned to harness those opportunities.”
Fifield last month unveiled the 5G: Enabling the future economy paper [PDF], which lists immediate actions as making spectrum available in a timely manner; actively taking part in the international standardisation process; “streamlining arrangements” to enable telcos to deploy infrastructure in a more time- and cost-efficient manner; and reviewing telco regulations to ensure they are fit for purpose for 5G.
Also speaking during the RadComms Conference on Wednesday, Australian Mobile Telecommunications Association (AMTA) CEO Chris Althaus said government involvement and input will play an important role in Australia’s 5G agenda.
Pointing to similar government involvement in the European Union, United Kingdom, and United States, Althaus — who was responsible for setting up Australia’s industry 5G Group — said the formation of a working group under the government’s 5G strategy is welcome, “because government not surprisingly is a key part of this 5G agenda”.
“You need only look at what the Europeans are doing — a 3 billion [euro] public-private partnership; the UK is similarly throwing an enormous amount of money at this; and we’ve recently looked at the ministerial direction in the EU, and resolution  in the House of Reps Congress in the United States specifically looking at the requirements of 5G deployment,” Althaus said.
“So this start from our administration is welcome, and we look forward to working on the specifics in the near future.”
Shadow Communications Minister Michelle Rowland has similarly previously pointed towards the British government’s funding for and formulation of a 5G strategy, saying this would likely ensure the UK is a world leader in the digital economy.
Althaus also used his RadComms speech to reiterate that there is urgency around setting aside 5G spectrum, with new ACMA chair Nerida O’Loughlin stressing the importance of the 3.6GHz, mmWave, and existing mobile broadband spectrum bands for 5G.
“The 3.6GHz band is being looked at internationally as a pioneer band for 5G mobile broadband, and we want to make sure that Australia is well placed to take an early role in 5G deployment,” O’Loughlin said during RadComms 2017.
“We’re aware that 5G and millimetre-wave bands present a great opportunity for Australians to benefit from early uptake of new technologies. Of course, in future we’re likely to see existing mobile broadband spectrum progressively migrate to 5G use, and that’s why the ACMA’s mobile broadband strategy is not designed around a particular generation of technical standards.
“As far as practical, we aim to give technological flexibility to spectrum purchasers themselves, who should be able to refarm their holdings for more advanced deployment if and as they are required. So besides the early availability of these 5G bands, we continue to support the availability of new spectrum.”
Previous ACMA 5G Coverage
After releasing its partial draft Radiocommunications Bill in May following a consultation paper in March last year, Fifield has said the government is aiming to introduce its updated Bill to Parliament next year.
The ACMA has revealed its suggested plans for 5G spectrum allocation, with the 3.6GHz band to likely go up for auction in Q2 2018 and the mmWave band in Q1 2019.
Immediate actions under the Australian government’s 5G directions paper include actively contributing to international standardisation efforts, making spectrum available, and modernising telco regulations.