Radiocommunications (Spectrum Licence Allocation 2010-2025 MHz Band) Determination 2006 (Cth)
Radiocommunications (Spectrum Licence Allocation — 2010-2025 MHz Band) Determination 2006
Radiocommunications Act 1992
The AUSTRALIAN COMMUNICATIONS AND MEDIA AUTHORITY, under sections 60 and 294 of the Radiocommunications Act 1992, determines the following procedures to be applied in allocating spectrum licences by auction and, in certain circumstances, for a pre-determined price.
Dated 17th August 2006
CHRIS CHAPMAN
Chairman
LYN MADDOCK
Deputy Chair
Australian Communications and Media Authority
Contents
Summary of Allocation System 5
Part 1Introduction
1.1Name of Determination 6
1.2Commencement 6
1.3Purpose of Determination 6
1.4Interpretation 6
1.5Approval of forms 9
1.6Auction manager 9
1.7Ways in which ACMA gives information 9
1.8Communicating with ACMA 10
1.9Method of paying monies to ACMA 10
Part 2Preparing for the auction
Division 1A Definitions for Part 2
2.1ADefinitions 12
Division 1Application and registration
2.1Entry fee and eligibility payment 12
2.2Publication of notice by ACMA 12
2.3Applicant Information Package 13
2.4Applications 13
2.5Lodging of application documents 14
2.6Initial eligibility 14
2.7Initial eligibility payment 15
2.8Calculating the eligibility payment 15
2.9Deed of Financial Security or performance payment 15
2.10Lodging of power of attorney 16
2.11Failure to comply with requirements concerning Original Documents and Deed of Financial Security 16
2.12Performance payment 17
2.13Forfeiture and refund of secured monies 17
2.14Withdrawal of applicant 17
2.15Register of applicants 18
2.16Registration of applicants 18
2.17Publication of BINs 19
2.18Preparation for bidding 19
Division 2Things ACMA and the auction manager must do before the auction
2.19Starting bids and increments 20
2.20Stages of auction, eligibility percentage, waivers and first round 20
Part 3Allocation for a pre-determined price or a negotiated price
3.1Allocation for a pre-determined price without an auction 21
3.2ACMA must have regard to applicants’ requirements 21
3.3The pre-determined price 21
3.4Offer of licence 21
3.5Payment of balance of pre-determined price 22
3.6Allocation if some offers refused 22
3.7Refunds if allocation process terminated 23
3.8Default 23
Part 4The auction
Division 1A Definitions for Part 4
4.1ADefinitions 24
Division 1Auction arrangements
4.1Auction procedure 24
4.2Rounds of an auction 24
4.3Schedule for a round 25
4.4Rounds on a day 25
4.5Recess days 25
4.6Auction manager may vary the length of the bidding period or results period 26
4.7Movement to next stage of auction 26
Division 2Bidding and taking part in the auction
4.8Ways of taking part in the auction 26
4.9Electronic bidding procedure 27
4.10Emergency telephone bidding procedure 28
4.11Identification of registered applicants 28
4.12Starting and minimum bids 28
4.13Changing starting bids 29
4.14Changing minimum bids 29
4.15Automatic re-bidding 30
4.16All lots on offer simultaneously 31
4.17General rules about bidding 31
4.18Eligibility bidding cap 32
4.19Bidding activity targets 32
4.20Loss of eligibility 32
4.21Waiver 33
4.22Withdrawal of bids 34
4.23Loss of eligibility on withdrawal 34
4.24Withdrawal penalty 34
4.25Suspension of an applicant 35
4.26Further Deed of Financial Security or additional performance payment 36
4.27Consequences of exclusion 37
Division 3Bringing the auction to an end
4.28Suspension or cancellation of auction 38
4.29Closing of auction 39
Part 5After the auction
5.1Allocation of licence to highest bidder 40
5.2Calculation of balance of bid price 40
5.3Payment of balance of bid price 40
5.4Default by successful applicant 41
5.5Allocation of defaulted lots 42
5.6Refunds to unsuccessful applicants 42
Part 6Miscellaneous
6.1Unallocated lots 43
6.2Liability of ACMA 43
6.3Recovery of damages by ACMA 43
6.4ACMA may obtain information from applicants 43
6.5Giving of information by ACMA 43
6.6Information provided by applicant 44
6.7Refunds of payments under Deed of Financial Security 44
Schedule 1Procedures for bid transmission (including automatic re-bids and withdrawal of bids) and authentication 45
Summary of Allocation System
Note This summary is intended to give an overview of the allocation system. Readers who want to fully understand how the system works should study the entire Determination in detail.
This Determination makes provision for the allocation of parts of the spectrum that have been identified as being available for re-allocation under section 153B of the Radiocommunications Act 1992 (the Act). ACMA proposes to allocate spectrum licences by a simultaneous ascending bid multiple round auction of spectrum allocation lots that then become the subject of spectrum licences. If applicants’ needs in all areas can be met without going to auction, the licences will be offered for a pre-determined price. Details of the overall scheme for allocation and issue of spectrum licences are set out in the Radiocommunications Spectrum Marketing Plan (2010–2025 MHz Band) 2006 prepared by ACMA under section 39A of the Act.
Each lot covers an area and a frequency band — for details, see the Marketing Plan. Each lot has a lot rating reflecting its relative value, determined by ACMA. People wishing to bid are asked to nominate an aggregate amount of lot ratings for the lots they wish to acquire, and this will be regarded as their ‘eligibility’ in the auction. People wishing to obtain a licence by this process must register, pay an entry fee and make a refundable proportional eligibility payment based on the eligibility they nominate. The eligibility payment is held against payment of bid withdrawal penalties as a means of discouraging applicants from abusing the auction process. A further Deed of Financial Security or an additional performance payment may also be required during the course of the auction if the amount secured under the Deed, or paid as a performance payment, falls below 10% of the total of high bids of an applicant.
The auction will be conducted electronically. Registered applicants may bid on any number of lots, in any combination, provided that their bidding activity does not exceed their eligibility. Applicants may nominate to be eligible for all lots, but they must make the necessary eligibility payment. Applicants interested in specific areas, or particular bands, need only make a sufficient eligibility payment to cover these.
Bidding will take place over several rounds with the results of each round being notified to registered applicants by ACMA. Registered applicants may withdraw bids during the round, but will incur a withdrawal penalty if the lot ultimately sells for less than the bid that was withdrawn or if the lot is not sold.
Registered applicants will be subject to activity requirements that require them to be active on a percentage of their eligibility. This percentage increases in stages during the auction. Registered applicants not meeting the activity requirements will have their eligibility proportionally reduced.
At the end of the allocation process, if all necessary pre-conditions are fulfilled, ACMA will aggregate the lots into licences to be issued to the successful applicants.
Part 1 Introduction
1.1 Name of Determination
This Determination is the Radiocommunications (Spectrum Licence Allocation — 2010-2025 MHz Band) Determination 2006.
1.2 Commencement
This Determination commences on the day after it is registered.
1.3 Purpose of Determination
This Determination sets out the procedures for allocating spectrum licences:
(a) by a simultaneous ascending bid multiple round auction of spectrum allocation lots that then become the subject of spectrum licences; and
(b) for a pre-determined price.
Note For paragraph 1.3 (b), see Part 3.
1.4 Interpretation
(1) In this Determination, unless the contrary intention appears:
ABN-DSC means an Australian Business Number Digital Signature Certificate allocated by an Accredited ABN-DSC Provider.
Accredited ABN-DSC Provider means an accredited certification authority within the meaning of the Commonwealth’s Gatekeeper strategy managed by the Australian Government Information Management Office.
ACN or ARBN means the relevant registration numbers for a company or body under the Corporations Act 2001.
Act means the Radiocommunications Act 1992.
additional performance payment, in relation to an applicant, means a performance payment worked out and paid to ACMA on behalf of the Commonwealth by that applicant under section 4.26.
Applicant Information Package means a package containing the information and documents set out in section 2.3.
application means a completed application form.
application closing date and time has the meaning given by paragraph 2.2 (1) (d).
application documents means an application and a Deed of Acknowledgment.
application form means the document approved by ACMA under paragraph 1.5 (1) (a).
area means the geographic area under the Marketing Plan.
auction means an auction held by ACMA in accordance with this Determination to allocate spectrum lots.
auction centre means the auction centre located at the Canberra office of ACMA.
auction computer system means the computer system operated by ACMA for the purpose of an auction.
auction manager means the person appointed under section 1.6.
balance of the bid price means the amount worked out in accordance with section 5.2.
balance of the pre-determined price means the amount worked out in accordance with section 3.3.
bank transfer, for a payment, means making the payment by electronic transfer.
bidding instruction means any of the following:
(a) a bid on a lot;
(b) an automatic re-bid on a lot;
(c) a bid withdrawal on a lot;
(d) the exercise of a waiver;
(e) an instruction to the auction manager not to apply the automatic waiver.
BIN means the number assigned to an applicant by ACMA under paragraph 2.16 (2) (a).
Chair means the Chair of ACMA.
Deed of Acknowledgment means a completed Deed of Acknowledgment form.
Deed of Acknowledgment form means the document approved by ACMA under paragraph 1.5 (1) (c).
Deed of Financial Security means a completed Deed of Financial Security form.
Deed of Financial Security form means the document approved by ACMA under paragraph 1.5 (1) (b).
eligibility payment means the payment worked out under section 2.8.
eligibility payment date and time has the meaning given by paragraph 2.2 (1) (e).
eligibility percentage has the meaning given by paragraph 2.20 (b).
entry fee means the entry fee payable under subsection 2.4 (1) by an applicant.
high bid, for a round, means the highest bid made on the lot in the bidding round or the bid taken to be the high bid under subsection 4.15 (4).
initial eligibility, for an applicant, means:
(a) an applicant’s initial eligibility nominated under subsection 2.6 (1); or
(b) if the applicant has given ACMA a notice under subsection 2.6 (4) — the applicant’s new initial eligibility as notified to ACMA in that notice.
lot means a part of the spectrum identified as a lot by ACMA in the Marketing Plan.
lot rating has the meaning given by the Marketing Plan.
Marketing Plan, for the auction of part of the spectrum, means the Marketing Plan prepared by ACMA for issuing spectrum licences for that part of the spectrum.
Note Copies of the Marketing Plan are available from ACMA.
online bidding instruction means an electronic communication capable of being sent electronically to the auction computer system containing a registered applicant’s bidding instruction for a round of an auction.
performance payment, in relation to an applicant, means monies paid to ACMA on behalf of the Commonwealth by that applicant under section 2.12.
pre-determined price, for a licence for a lot, means the price, determined under subsection 3.3 (1), of the licence for the lot.
refundable performance payment, in relation to an applicant, means any monies paid to ACMA on behalf of the Commonwealth by the applicant as a performance payment or an additional performance payment, and any monies unconditionally paid to ACMA on behalf of the Commonwealth at the discretion of the Promisor under a Deed of Financial Security that is given to ACMA by the applicant under section 2.9.
registered applicant means an applicant registered under section 2.16.
stage means a group of successive rounds of an auction to which the same eligibility percentage applies.
starting bid, for a lot, means the amount set by ACMA under paragraph 2.19 (a).
successful applicant has the meaning given by subsection 5.1 (1).
working day means a day that is not a Saturday, a Sunday or a public holiday in the Australian Capital Territory.
Note The following terms, used in this Determination, are defined in section 5 of the Act:
· ACMA
· frequency band
· marketing plan
· spectrum
· spectrum licence.
(2) In this Determination:
(a) a reference to time is a reference to that time in the Australian Capital Territory; and
(b) a reference to an amount of money is a reference to that amount in Australian currency; and
(c) the range of numbers that identifies a frequency band includes the higher, but not the lower, number.
(3) If a number worked out in accordance with this Determination is not a whole number:
(a) the number is to be rounded to the nearest whole number; and
(b) a number with 5 in the first decimal place is to be rounded up to the nearest whole number.
(4) A registered applicant is active on a lot in a round if:
(a) for a round to which the starting bid applies — the applicant makes a bid that equals or exceeds the starting bid; and
(b) for any other round:
(i) the applicant makes a bid that equals or exceeds the minimum bid on the lot worked out in accordance with section 4.12; or
(ii) the applicant holds the high bid on the lot from the previous round and does not withdraw that high bid in the current round.
1.5 Approval of forms
(1) ACMA must, in writing, approve the following documents:
(a) an application form;
(b) a Deed of Financial Security form;
(c) a Deed of Acknowledgment form, that includes a statement to the effect that the applicant agrees, if successful in respect of a lot, to pay to ACMA on behalf of the Commonwealth the balance of the bid price for the lot as required by section 5.3.
(2) ACMA may approve more than 1 form of a document.
1.6 Auction manager
ACMA must, in writing, appoint a person (the auction manager) to manage an auction.
1.7 Ways in which ACMA gives information
(1) ACMA may give information or documents to a person under this Determination in the following ways:
(a) by letter;
(b) by telephone;
(c) by fax;
(d) by email.
(2) ACMA may also make information available to a person:
(a) if the person is using the auction computer system — by making the information available on the system; or
(b) by publishing the information on the internet.
1.8 Communicating with ACMA
Once an auction has started, a form or notice required to be given to ACMA in relation to the auction must be given by fax to a number shown in the Applicant Information Package as the number for giving notices by fax.
Note Bidding must, except in emergencies, be done electronically — see section 4.8.
1.9 Method of paying monies to ACMA
(1) All monies paid to ACMA on behalf of the Commonwealth must be paid in Australian currency.
(2) Monies due to be paid to ACMA on behalf of the Commonwealth for any of the following payments must be paid by the date specified in the relevant provision of this Determination and in accordance with this Determination:
(a) entry fee;
(b) eligibility payment;
(c) performance payment;
(d) additional performance payment;
(e) 10% of the balance of the bid price;
(f) the remainder of the balance of the bid price;
(g) the balance of the pre-determined price.
(3) Monies due to be paid to ACMA on behalf of the Commonwealth for any of the payments set out in subsection (2) must be paid:
(a) by bank cheque; or
(b) by bank transfer.
(4) If an amount of money is required to be paid to ACMA on behalf of the Commonwealth by a specific date, it is sufficient if, by that date, either:
(a) a bank cheque is paid to and received by ACMA on behalf of the Commonwealth for the amount of the payment; or
(b) if paying the money by bank transfer, the applicant:
(i) does everything necessary to make the transfer; and
(ii) complies with subsection (5); and
(iii) gives ACMA evidence that the transfer has been made.
(5) A bank transfer must be made into the following bank account:
(a) Bank — Reserve Bank of Australia;
(b) Branch — Canberra City;
(c) BSB number — 092-009;
(d) Account number — 922765;
(e) Account name — ACMA Official Administered Receipts Account.
(6) A bank transfer must be received in the bank account specified in subsection (5) within 5 working days after the required date.
(7) If a bank transfer:
(a) relates to:
(i) a payment mentioned in paragraph (2) (a) or (b); or
(ii) a payment mentioned in paragraph (2) (c) that is payable under section 2.9; and
(b) is not received in the bank account specified in subsection (5) within 5 working days after the required date;
the person’s application ceases to have effect, and the person is not entitled to take part in the auction or in any allocation under Part 3 or to be allocated a licence as a consequence of the auction or allocation.
(8) If a bank transfer:
(a) relates to:
(i) a payment mentioned in paragraph (2) (c) that is payable under section 4.26; or
(ii) a payment mentioned in paragraph (2) (d); and
(b) is not received in the bank account specified in subsection (5) within 5 working days after the required date;
the person is not entitled to take any further part in the auction or to be allocated a licence as a consequence of the auction.
(9) If a bank transfer:
(a) relates to a payment mentioned in paragraph (2) (e), (f) or (g); and
(b) is not received in the bank account specified in subsection (5) within 5 working days after the required date;
the person is not entitled to be allocated a licence as a consequence of the auction or allocation (as applicable).
(10) The applicant must pay all bank charges and Government duties imposed on an amount paid to ACMA on behalf of the Commonwealth, and any amount will not be regarded as having been so paid unless the full amount net of those charges is paid to ACMA on behalf of the Commonwealth.
Part 2 Preparing for the auction
Division 1A Definitions for Part 2
2.1A Definitions
In this Part:
activity target, for a registered applicant during a round in a stage, means the figure obtained by multiplying the amount of the registered applicant’s eligibility for that round by the eligibility percentage fixed by the auction manager for that stage.
eligibility, for a registered applicant and a round, means the applicant’s initial eligibility as varied (if at all) during the auction.
Division 1 Application and registration
2.1 Entry fee and eligibility payment
Before ACMA publishes a notice inviting applications for an auction, it must set:
(a) the amount of the entry fee; and
(b) the eligibility amount for the auction; and
(c) the financial security amount for the auction.
2.2 Publication of notice by ACMA
(1) Before holding an auction, ACMA must publish on its website a notice:
(a) describing the parts of the spectrum to be auctioned; and
(b) giving a brief description of the way the auction will be conducted; and
(c) inviting people to apply to ACMA to take part in the auction; and
(d) stating the date and time by which applications must be received by ACMA and the entry fee must be paid to ACMA on behalf of the Commonwealth (the application closing date and time); and
(e) stating the date and time (the eligibility payment date and time) by which:
(i) eligibility payments must be paid to ACMA on behalf of the Commonwealth; and
(ii) either:
(A) performance payments must be paid to ACMA on behalf of the Commonwealth; or
(B) Deeds of Financial Security must be given to ACMA; and
(f) stating that licences will be auctioned in accordance with this Determination; and
(g) stating that further information (the Applicant Information Package) can be obtained from ACMA at the address given in the notice.
(2) If a matter mentioned in the notice changes, ACMA must publish another notice giving details of the change on its website.
(3) ACMA may publish other information about auctions and may publish that information, and the notices mentioned in subsections (1) and (2), in other ways in addition to the ways required by subsections (1) and (2).
2.3 Applicant Information Package
(1) The Applicant Information Package must contain the following information and copies of the following documents:
(a) the spectrum re-allocation declaration made by the Minister under section 153B of the Act;
(b) a guide to the auction process;
(c) the Marketing Plan;
(d) this Determination;
(e) the application form, with instructions for completing and lodging the form;
(f) the Deed of Financial Security form;
(g) information about the performance payment as an alternative to providing a Deed of Financial Security, if required;
(h) the Deed of Acknowledgment form;
(i) the amount of the entry fee for the auction set by ACMA under paragraph 2.1 (a);
(j) the eligibility amount set by ACMA under paragraph 2.1 (b);
(k) the financial security amount set by ACMA under paragraph 2.1 (c);
(l) the application closing date and time;
(m) the eligibility payment date and time;
(n) the address of the auction centre.
(2) The Applicant Information Package may also contain other information about the auction.
2.4 Applications
(1) A person who wants to obtain a spectrum licence under this Determination must apply to ACMA for registration and pay the entry fee.
(2) The person must give ACMA the following documents (the application documents):
(a) an application;
(b) a Deed of Acknowledgment.
(3) The entry fee must be paid in accordance with section 1.9.
Note By section 1.9, the entry fee may be paid by bank cheque or bank transfer. If paid by bank transfer, the applicant must give ACMA evidence that the transfer has been made. If the entry fee is not in ACMA’s account within 5 working days of the application date, the application ceases to have effect.
2.5 Lodging of application documents
(1) An applicant’s application documents must be lodged with ACMA, at the auction centre, by the application closing date and time.
(2) If the application documents are lodged by fax, the originals of the documents lodged by fax must be received by ACMA no later than 5 working days after the application closing date and time. If they are not, the person’s application ceases to have effect and the person is not entitled to take part in the auction or be allocated a licence as a consequence of the auction.
(3) As soon as practicable after receiving the application documents, ACMA must confirm receipt by fax or by letter (if ACMA does not know the applicant’s fax number) noting particulars of the applicant’s:
(a) name; and
(b) address; and
(c) ACN or ARBN; and
(d) initial eligibility.
2.6 Initial eligibility
(1) An applicant must nominate its initial eligibility in the application form.
(2) An applicant may nominate any initial eligibility the applicant wishes, as long as the amount does not exceed the total of the lot ratings of all lots on offer.
(3) ACMA must ensure that the application form provides a guide to calculating initial eligibility.
(4) If an applicant wishes to change the initial eligibility nominated in its application form, the applicant must, by the eligibility payment date and time, give ACMA written notice of the applicant’s new initial eligibility.
(5) An applicant cannot change its initial eligibility after the eligibility payment date and time.
Note 1 An applicant cannot bid so as to exceed its eligibility — see section 4.18 — but nothing prevents an applicant from obtaining initial eligibility to cover all lots, as long as the applicant pays the appropriate eligibility payment.
Note 2 Subject to the limits set by section 4.18, an applicant may bid on any combination of lots. In particular, an applicant is not restricted to bidding only on the lots that relate to the areas the applicant nominated on the application form.
2.7 Initial eligibility payment
(1) An applicant must, by the eligibility payment date and time:
(a) ensure that ACMA on behalf of the Commonwealth is paid an eligibility payment, worked out in accordance with section 2.8; and
(b) if required under section 2.9, either:
(i) ensure that ACMA is given a Deed of Financial Security; or
(ii) ensure that ACMA on behalf of the Commonwealth is paid a performance payment.
(2) The eligibility payment and performance payment must be paid in accordance with section 1.9.
Note By section 1.9, the eligibility payment and performance payment may be paid by bank cheque or bank transfer. If paid by bank transfer, the applicant must give ACMA evidence that the transfer has been made.
(3) Acceptance of an eligibility payment or a performance payment is not acceptance of the application documents.
2.8 Calculating the eligibility payment
The amount of eligibility payment to be paid by an applicant is the amount in dollars worked out by multiplying the amount of the applicant’s initial eligibility by the eligibility amount set by ACMA under paragraph 2.1 (b).
2.9 Deed of Financial Security or performance payment
(1) A person who wishes to be registered as an applicant must:
(a) obtain, and give to ACMA, a Deed of Financial Security; or
(b) pay a performance payment to ACMA on behalf of the Commonwealth.
(2) Subsection (1) does not apply to an applicant if:
(a) ACMA is satisfied that the applicant is an authority of the Commonwealth, a State or a Territory; or
(b) ACMA is satisfied that the applicant is a subsidiary, within the meaning of the Corporations Act 2001, of an authority of the Commonwealth, a State or a Territory; or
(c) ACMA decides, under subsection (3), that the applicant need not give ACMA a Deed of Financial Security or pay a performance payment to ACMA on behalf of the Commonwealth.
(3) If a company (other than a company incorporated outside Australia) satisfies ACMA that it does not carry on business for profit, ACMA:
(a) may decide that the company need not give ACMA a Deed of Financial Security or pay a performance payment to ACMA on behalf of the Commonwealth; and
(b) must notify the company in writing of the decision as soon as practicable after making the decision.
(4) The performance payment, or the amount to be secured under the Deed of Financial Security, must be at least an amount in dollars calculated as the initial eligibility nominated by the applicant multiplied by the financial security amount set by ACMA under paragraph 2.1 (c).
(5) A person executing a Deed of Financial Security must be:
(a) an authorised deposit-taking institution within the meaning of the Banking Act 1959; or
(b) a person authorised to carry on business in Australia as an insurer under the Insurance Act 1973; or
(c) if Part VII of that Act has not ceased to have effect — a Lloyd’s underwriter.
(6) For this section, if the person executing a Deed of Financial Security is a corporation, that person is taken to execute the Deed of Financial Security by executing the Deed in accordance with section 127 of the Corporations Act 2001.
2.10 Lodging of power of attorney
If a Deed of Financial Security is executed under a power of attorney for a corporation, the applicant must give ACMA a copy of the power of attorney with the Deed.
2.11 Failure to comply with requirements concerning Original Documents and Deed of Financial Security
(1) This section applies if:
(a) ACMA does not receive the originals of documents lodged by fax in accordance with subsection 2.5 (2); or
(b) ACMA is not satisfied that the person giving the Deed of Financial Security is a person mentioned in subsection 2.9 (5).
(2) If the applicant has not been registered by ACMA under section 2.16, ACMA must not register the applicant.
(3) If the applicant is, or has been, registered by ACMA under section 2.16, the applicant’s registration is of no effect.
(4) The applicant is excluded from taking part (or any further part) in the auction and from obtaining a spectrum licence in relation to that auction.
(5) The applicant’s eligibility payment and refundable performance payments (if any) are refundable.
(6) The applicant’s entry fee is not refundable.
2.12 Performance payment
(1) This section applies if a performance payment is paid to ACMA on behalf of the Commonwealth by the applicant.
(2) Performance payment monies paid to ACMA on behalf of the Commonwealth may be dealt with in accordance with this Determination as security for the timely discharge of the applicant’s financial obligations to ACMA under this Determination.
(3) If an applicant defaults in paying monies for a successful bid, the performance payment is forfeited to the Commonwealth to meet any undischarged liability of the applicant in accordance with section 5.4.
(4) ACMA must refund an applicant’s performance payment monies after an auction, in accordance with Part 5.
2.13 Forfeiture and refund of secured monies
(1) To meet any undischarged liability owed to ACMA on behalf of the Commonwealth by an applicant for the matters specified in subsection (2), the following kinds of monies will be forfeited to the Commonwealth:
(a) monies that are secured by the performance payment;
(b) monies that are paid to ACMA on behalf of the Commonwealth, on demand, under a Deed of Financial Security;
(c) monies that have been paid to ACMA on behalf of the Commonwealth under clause 1.4 of a Deed of Financial Security.
(2) For subsection (1), the following matters are specified:
(a) any act or omission by the applicant, its officers, employees, agents, volunteers, subcontractors or associates in connection with the applicant’s participation in an allocation process conducted under this Determination;
(b) any breach or default by the applicant of its obligations or warranties under the Deed of Acknowledgment, this Determination, or both.
2.14 Withdrawal of applicant
(1) An applicant may withdraw from the auction process at any time before the auction starts, by written notice given to ACMA.
(2) An applicant who withdraws (a withdrawn applicant) is excluded from taking part in:
(a) the auction; and
(b) the allocation of the spectrum in any other way as part of the current allocation process (for example, for a pre-determined price under Part 3).
(3) The eligibility payment and refundable performance payments (if any) of a withdrawn applicant are refundable.
(4) The entry fee paid by a withdrawn applicant is not refundable.
2.15 Register of applicants
(1) ACMA must maintain a register of applicants.
(2) The register may be in electronic form.
(3) For each applicant, the register must contain details of:
(a) the name and address of the applicant; and
(b) the applicant’s telephone and fax numbers; and
(c) the applicant’s initial eligibility; and
(d) the applicant’s BIN; and
(e) if the applicant is a company or a registrable body — the applicant’s ACN or ARBN.
(4) The register may also contain any other information that ACMA considers necessary for the running of the auction.
(5) ACMA must make the changes to the register that ACMA considers necessary or convenient as soon as practicable after:
(a) an applicant tells ACMA of any change of name, address, or telephone or fax numbers; or
(b) ACMA becomes aware that any information on the register is not correct.
(6) Except as authorised by this Determination, or as otherwise authorised by law, ACMA must ensure that any details about applicants are not disclosed until the auction is closed.
2.16 Registration of applicants
(1) ACMA must register an applicant only if:
(a) the applicant has:
(i) lodged application documents; and
(ii) paid the entry fee in accordance with section 1.9; and
(iii) paid the eligibility payment, and given a Deed of Financial Security to ACMA or paid a performance payment to ACMA on behalf of the Commonwealth, in accordance with section 1.9; and
(b) if a Deed of Financial Security is required — ACMA is satisfied that the person who executed the Deed is a person mentioned in subsection 2.9 (5).
Note Under section 1.9, the money may be paid by bank cheque or bank transfer. If paid by bank transfer, the applicant must give ACMA evidence that the transfer has been made.
(2) ACMA must assign to each registered applicant:
(a) a bidder identification number (BIN); and
(b) a set of transaction code keys to be used if the applicant needs to bid by telephone in an emergency.
Note A registered applicant may take part by telephone if, because of what ACMA considers to be an emergency, the registered applicant is unable to take part electronically — see subsection 4.8 (3).
(3) At least 5 working days before the start of the auction, ACMA must, by writing, tell each registered applicant:
(a) that the applicant has been registered; and
(b) the applicant’s initial eligibility, as shown on the register; and
(c) the starting date and time of the first round of the auction; and
(d) ACMA’s telephone and fax numbers available for use by registered applicants; and
(e) the applicant’s BIN and transaction code keys.
2.17 Publication of BINs
(1) After the application closing date and time, but at least 5 working days before the start of the auction, ACMA must publish on its website a notice setting out, for each registered applicant:
(a) if the registered applicant is a company, for each company:
(i) its name; and
(ii) its registered address; and
(iii) its ACN or ARBN; and
(b) if the registered applicant is an individual who has consented to the publication of his or her name — the name of the person; and
(c) the applicant’s initial eligibility; and
(d) the applicant’s BIN.
(2) After the notice has been published on ACMA’s website, ACMA may make the information in the notice available in other ways.
2.18 Preparation for bidding
(1) ACMA will give each registered applicant reasonable instructions and practice in using the auction computer system.
Note 1 A registered applicant who bids must use the auction computer system — see subsection 4.8 (2).
Note 2 ACMA will make an auction guide available to each registered applicant to help the applicant take part in the auction — see paragraph 2.3 (1) (b).
(2) Before the start of the auction, each registered applicant must obtain an ABN-DSC.
Note For information on how to obtain an ABN-DSC, see Schedule 1.
Division 2 Things ACMA and the auction manager must do before the auction
2.19 Starting bids and increments
After the application closing date and time, ACMA must set the following 3 amounts:
(a) the starting bid for each lot;
(b) the increment of price per lot rating;
(c) the increment of percentage of high bid.
Note The Chair may vary the starting bid, and the auction manager may vary the other amounts set under section 2.19 — see sections 4.13 and 4.14.
2.20 Stages of auction, eligibility percentage, waivers and first round
After the application closing date and time, the auction manager must:
(a) fix the number of stages for the auction; and
(b) fix a percentage to be applied in calculating the activity target during each stage of the auction (the eligibility percentage); and
(c) fix the number of waivers for each registered applicant, being the same number for all applicants; and
(d) set the amount of time allocated for the bidding period for each round of the auction; and
(e) set the amount of time allocated for the results period of each round of the auction; and
(f) set the schedule for the first and second rounds, based on the amounts referred to in paragraphs (d) and (e), taking into account the effect of section 4.4; and
(g) tell all registered applicants of these matters.
Part 3 Allocation for a pre-determined price or a negotiated price
3.1 Allocation for a pre-determined price without an auction
(1) If ACMA considers that it may be able to allocate licences for lots without having to conduct an auction to identify the highest value user for the spectrum represented by those lots, ACMA may offer to allocate licences for the lots for a pre-determined price, as set out in this Part.
(2) The offer of a licence will be conditional on payment of the pre-determined price.
3.2 ACMA must have regard to applicants’ requirements
In identifying lots for subsection 3.1 (1) and in deciding for subsection 3.4 (1) whether it may be able to allocate licences without an auction, ACMA must only have regard to:
(a) the applicants’ indications, in their applications, of the lots they require; and
(b) such other information about the lots they require that applicants may provide to ACMA.
3.3 The pre-determined price
(1) The pre-determined price for a licence is worked out as follows:
(a) ACMA will identify each lot to be included in the licence;
(b) if it has not already done so, ACMA will set the starting bid for each lot;
(c) ACMA will add up the starting bids for each lot.
Note The starting bid is set by ACMA under section 2.19.
(2) The balance of the pre-determined price payable by a registered applicant is the pre-determined price less the amount of the eligibility payment paid by the applicant.
3.4 Offer of licence
(1) ACMA will offer each registered applicant a licence or licences for the lots identified under paragraph 3.3 (1) (a).
(2) ACMA will send each registered applicant, by receipted mail:
(a) a draft of the licence or licences; and
(b) a notice stating:
(i) that the applicant is offered a licence or licences for the lots identified under paragraph 3.3 (1) (a); and
(ii) the amount of the pre-determined price payable for each licence and the total pre-determined price; and
(iii) the amount of the eligibility payment made by the applicant and held by ACMA; and
(iv) the balance of the total pre-determined price payable for the licence or licences; and
(v) that the offer is conditional on each other applicant accepting the licence or licences offered or telling ACMA that it withdraws its application for a licence.
(3) A registered applicant who wishes to accept ACMA’s offer must do so by notifying ACMA in writing within 7 working days of receiving the offer and agreeing, in writing, to pay the balance of the pre-determined price.
(4) If every applicant accepts the licence offered to it, each applicant is entitled to be allocated the licence offered to it on payment of the balance of the pre-determined price in accordance with this Determination.
Note If an applicant does not accept the licence offered to it, section 3.6 applies.
(5) ACMAmust write to each applicant about each applicant’s entitlement under subsection (4).
Note For the issue of licences, see section 62 of the Act.
3.5 Payment of balance of pre-determined price
The balance of the pre-determined price is payable:
(a) within 10 working days of the date of the letter sent to the applicant under subsection 3.4 (5); and
(b) in accordance with section 1.9.
Note By section 1.9, the balance of the pre-determined price may be paid by bank cheque or bank transfer. If paid by bank transfer, the applicant must give ACMA evidence that the transfer has been made.
3.6 Allocation if some offers refused
If an applicant does not accept, in accordance with subsection 3.4 (3), a licence that has been offered to it, ACMA may:
(a) withdraw offers for licences for all spectrum covered by the licences offered and terminate the allocation process under this Part 3; or
(b) allocate all that spectrum by auction or otherwise under this Determination; or
(c) allocate licences under subsection 3.4 (4) to the applicants who have accepted the offered licences and, for lots covered by licences that were not accepted:
(i) allocate those lots by auction or otherwise, in accordance with this Determination; or
(ii) withdraw those lots from allocation and allocate the spectrum covered by those lots at a later date.
Note ACMA may make determinations under section 60 of the Act about allocations other than by auction.
3.7 Refunds if allocation process terminated
If ACMA terminates the allocation process under section 3.6, the eligibility payments and refundable performance payments of all applicants are refundable.
3.8 Default
If an applicant does not pay the balance of the pre-determined price for a licence in accordance with section 3.5:
(a) the applicant ceases to be entitled to be allocated the licence; and
(b) the eligibility payment, and refundable performance payments of the applicant are forfeited to the Commonwealth; and
(c) the allocation of licences under this Part to other applicants is not affected; and
(d) the lots included in the licence are to be treated as unallocated lots under section 6.1.
Part 4 The auction
Division 1A Definitions for Part 4
4.1A Definitions
In this Part:
activity target, for a registered applicant during a round in a stage, means the figure obtained by multiplying the amount of the registered applicant’s eligibility for that round by the eligibility percentage fixed by the auction manager for that stage.
eligibility, for a registered applicant and a round, means the applicant’s initial eligibility as varied (if at all) during the auction.
Division 1 Auction arrangements
4.1 Auction procedure
(1) An auction consists of a number of stages, each of which is made up of a number of rounds.
(2) The first round of the auction starts on the date and time for that round set by the auction manager under paragraph 2.20 (f).
4.2 Rounds of an auction
(1) Each round of an auction is made up of the following periods and activities:
(a) the bidding period — during which registered applicants make their bidding instructions;
(b) the results period — during which the auction manager works out the high bids on each lot offered, using the auction computer system and then publishes, using the auction computer system and the internet, the results for the round.
Note For paragraph (a), the following provisions are relevant:
(a) in the case of electronic bidding, a bid is taken to have been made when the online bidding instruction has been authenticated by the auction computer system — see paragraph 4.9 (1) (g);
(b) in the case of emergency telephone bidding, a bid is taken to have been made when the online bidding instruction has been authenticated by the auction computer system — see paragraph 4.10 (1) (f);
(c) in the case of withdrawing bids, withdrawal may be subject to penalties — see section 4.24.
(2) In this section:
results, for a round, means the following results and information:
(a) all bids, rounded down to 4 significant digits or less, and bid withdrawals made during the round;
(b) the amount of the high bid on each lot at the end of the round, rounded down to 4 significant digits or less, and the BIN of each high bidder;
(c) the minimum bid on each lot for the next round;
(d) the total value of high bids held by a registered applicant at the end of the round;
(e) each registered applicant’s eligibility at the beginning of the next round;
(f) the schedule for the next round and the round after that, worked out from the times set by the auction manager under paragraphs 2.20 (d) and (e), having regard to the matters set out in section 4.4;
(g) any other information necessary for the smooth running of the auction.
(3) The information about a bid published under this section must not identify the automatic re-bid limit of any applicant unless that re-bid limit becomes a bid for the round.
4.3 Schedule for a round
The schedule for a round must include:
(a) the date and time at which the round is to start and bidding opens; and
(b) the date and time when the bidding period ends and the results period starts; and
(c) the date and time when the results period ends and the round ends.
4.4 Rounds on a day
(1) Once the auction opens, there will be at least 1 round each working day unless the day is a recess day.
(2) No round on a day will start before 9.00 am.
(3) If, after the end of a round, the auction manager thinks that there will be time to finish another round before 5.30 pm on that day, he or she may decide to hold another round for that day.
4.5 Recess days
(1) The auction manager may declare a day to be a recess day (whether or not the day has previously been arranged to be a working day).
(2) Before declaring a recess day, the auction manager must give registered applicants an opportunity to comment on the proposed declaration and take into account any comments received.
(3) If the auction manager decides to declare a day to be a recess day, the auction manager must tell all registered applicants of this.
4.6 Auction manager may vary the length of the bidding period or results period
(1) The auction manager may vary the length of the bidding period or the results period of a round in the auction.
(2) Before varying the length of time set for the bidding period or the results period of a round in the auction, the auction manager must:
(a) tell registered applicants of the proposed change; and
(b) ask registered applicants for their comments on the proposal within the time (being not less than 1 hour) set by the auction manager; and
(c) take into account any comments received on the proposal.
(3) If the auction manager decides to vary the length of time set for the bidding period or the results period of a round in the auction, the auction manager must tell all registered applicants of this and specify the round when the change will take effect.
4.7 Movement to next stage of auction
(1) The auction manager may move the auction to the next stage.
(2) Before moving the auction to the next stage, the auction manager must:
(a) tell registered applicants of the proposal; and
(b) ask registered applicants for their comments on the proposal within the time (being not less that 1 hour) set by the auction manager; and
(c) take into account any comments received on the proposal.
(3) If the auction manager decides to move to the next stage he or she must tell all registered applicants of this and specify the round when the change will take effect.
Division 2 Bidding and taking part in the auction
4.8 Ways of taking part in the auction
(1) The way for a registered applicant to take part in an auction is by electronic means.
(2) A registered applicant taking part in an auction must use only the auction computer system.
(3) However, a registered applicant may take part by telephone if:
(a) because of what ACMA considers to be an emergency, the registered applicant is unable to take part using the auction computer system; or
(b) subsection (4) applies to the registered applicant.
(4) This subsection applies to a registered applicant if:
(a) ACMA considers that the registered applicant’s ABN-DSC or transaction code keys have been compromised and cannot be used to authenticate bidding instructions; and
(b) the applicant’s participation in the auction has not been suspended under section 4.25; and
(c) the auction manager has notified the registered applicant that it is permitted to take part in the auction by telephone.
(5) In this Division:
taking part means bidding, making automatic re-bids, withdrawing a bid, exercising a waiver or giving instructions not to exercise a waiver.
Note For general rules about bidding, see section 4.17. For rules on using a waiver, see section 4.21. For withdrawing a bid, see section 4.22.
4.9 Electronic bidding procedure
(1) The procedure for taking part in the auction electronically is as follows:
(a) a registered applicant must log onto the auction computer system to prepare its online bidding instruction for the round;
(b) the online bidding instruction must be encrypted for transmission and digitally signed using keys provided by an Accredited ABN-DSC Provider to authenticate the online bidding instruction as having been created by the registered applicant;
(c) the auction computer system will permit the registered applicant to print out a confirmation of bidding instructions contained in the online bidding instruction before transmission;
(d) the registered applicant must use ACMA’s auction website to connect to the auction computer system;
(e) the registered applicant must initiate a file transfer of the online bidding instruction to the auction computer system;
(f) once the online bidding instruction is authenticated, the auction computer system will confirm receipt of the online bidding instruction;
(g) the time at which bidding instructions contained in the online bidding instruction are taken to be made is the time at which the online bidding instruction is authenticated by the auction computer system;
(h) the auction computer system will process the bidding instructions contained in the online bidding instruction.
(2) Details of procedures for bid transmission and authentication are set out in Schedule 1.
4.10 Emergency telephone bidding procedure
(1) The procedure for emergency telephone bidding is as follows:
(a) a registered applicant must use the telephone number notified by the auction manager as the number for telephone bidding;
(b) the registered applicant’s call will be taken by an ACMA operator;
(c) the registered applicant must quote the transaction code keys, as described in Schedule 1;
(d) the registered applicant must meet any additional identification requirements imposed by ACMA, as set out in Schedule 1;
(e) ACMA must enter the bidding instructions, in the form of an online bidding instruction, as directed by the registered applicant, into the auction computer system as soon as practicable;
(f) the time at which bidding instructions contained in the online bidding instruction are taken to be made is the time at which the online bidding instruction is authenticated by the auction computer system;
(g) ACMA must print out a confirmation of the online bidding instruction from the auction computer system;
(h) ACMA must send the print out of the confirmation to the registered applicant by fax, if the applicant has nominated a fax number;
(i) ACMA must process the bidding instructions in the same way as it processes the bids made electronically by registered applicants.
(2) Detailsof the procedures for bid transmission and authentication are set out in Schedule 1.
4.11 Identification of registered applicants
(1) A registered applicant must comply with the identification requirements set out in Schedule 1.
(2) If the auction manager tells registered applicants to use additional identification, they must do so.
4.12 Starting and minimum bids
(1) A bid on a lot below the amount of the starting bid for that lot will not be accepted.
Note For starting bids, see sections 2.19 and 4.13.
(2) After a starting bid has been made on a lot in a round, a bid in a later round on the lot that is below the minimum bid for that lot will not be accepted.
(3) The minimum bid for a lot is the sum of the high bid on that lot in the previous round, as published in the results and information for the round, and the higher of:
(a) the increment of price per lot rating set under section 2.19, multiplied by the lot rating for the lot; and
(b) the increment of percentage of high bid set under section 2.19, multiplied by that high bid.
(4) However, if a bid on a lot is withdrawn, the minimum bid on that lot is worked out in accordance with section 4.22.
(5) A registered applicant who holds the high bid on a lot from a previous round is not required by subsection (2) to raise its own high bid, but may do so.
4.13 Changing starting bids
(1) Despite section 4.12, the Chair may, at any time, vary the amount of the starting bid on a lot.
(2) Before doing this, the Chair must:
(a) tell registered applicants of the proposed change; and
(b) ask registered applicants for their comments on the proposal within the time (being not less than 1 hour) set by the auction manager; and
(c) take into account any comments received on the proposal.
(3) The auction manager must notify all registered applicants of the change before the round when the change takes effect.
4.14 Changing minimum bids
(1) Despite section 4.12, the auction manager may, at any time during the auction, change the amounts fixed under paragraphs 2.19 (b) and (c) to vary the minimum bid on a lot.
(2) Before doing this, the auction manager must:
(a) tell registered applicants of the proposed change; and
(b) ask registered applicants for their comments on the proposal within the time (being not less than 1 hour) set by the auction manager; and
(c) take into account any comments received on the proposal.
(3) The auction manager must notify all registered applicants of the change before the round when the change takes effect.
4.15 Automatic re-bidding
(1) A registered applicant must not make an automatic re-bid on a lot in a round unless the applicant:
(a) makes a bid on the lot in the round; or
(b) is the high bidder on the lot from the previous round.
(2) An automatic re-bid:
(a) only applies in the round in which it is made; and
(b) must be:
(i) if the registered applicant makes the starting bid on the lot — at least 1 minimum bid increment above the starting bid; or
(ii) if the registered applicant makes a bid on the lot other than the starting bid — at least 1 minimum bid increment more than the applicant’s own bid; or
(iii) if the registered applicant is already the high bidder on that lot — at least 2 minimum bid increments above the applicant’s high bid as published in the results and information for the previous round.
(3) In working out the high bid in a round, an automatic re-bid made by the bidder who made the next highest bid to the automatic re-bid is disregarded.
(4) If only 1 bidder (the second bidder) makes an automatic re-bid that exceeds the high bid made or held on the lot in the round by another bidder:
(a) the second bidder is taken to be the high bidder for the lot in the round; and
(b) the amount of the high bid for the round is taken to be the lesser of:
(i) 1 minimum bid increment more than the highest bid recorded for the lot in the round; or
(ii) the amount of the automatic re-bid.
(5) If more than 1 bidder makes an automatic re-bid that exceeds the high bid made on the lot in the round by another bidder:
(a) the bidder who nominated the highest amount to which the automatic re-bid was limited is taken to be the high bidder for the lot; and
(b) the amount of the high bid for the round is taken to be the lesser of:
(i) 1 minimum bid increment more than the next highest amount to which an automatic re-bid was limited for the lot in that round; or
(ii) the highest amount to which an automatic re-bid was limited for the lot in that round; and
(c) the amount of the next highest bid is taken to be the next highest amount to which an automatic re-bid was limited for the lot in that round; and
(d) any bid instruction, including an automatic re-bid, is to be regarded as a bid for the lot at the amount of the automatic re-bid.
(6) If more than 1 bidder makes an automatic re-bid that exceeds the high bid made on the lot in the round by another bidder by the same amount, and that automatic re-bid amount exceeds any other automatic re-bid made on the lot in the round:
(a) the bidder whose re-bid is recorded in the auction computer system as being first made is taken to be the high bidder for the lot in that round; and
(b) the amount of the high bid for the round is taken to be the amount to which an automatic re-bid was limited for the lot in that round; and
(c) any bid instruction, including an automatic re-bid, is to be regarded as a bid for the lot at the amount of the automatic re-bid.
(7) In this section:
minimum bid increment, for a lot in a round, means the higher of:
(a) the increment of price per lot rating set under section 2.19, multiplied by the lot rating for the lot; and
(b) the increment of percentage of high bid set under section 2.19 multiplied by:
(i) the high bid on that lot in the previous round as published in the results and information for that round; or
(ii) if there is no high bid published in the results and information for that round — zero.
Note ACMA must not disclose automatic re-bid limits — see subsection 4.2 (3).
4.16 All lots on offer simultaneously
All of the lots on offer at an auction will be open for bidding in each round of the auction.
4.17 General rules about bidding
(1) Subject to sections 4.18 and 4.19, a registered applicant may bid on any combination of lots.
(2) In particular, an applicant is not restricted to bidding only on the lots that relate to the areas the applicant nominated in its application form.
(3) In a round, an applicant may make only 1 bidding instruction.
Note An automatic re-bid may be made once only in a round — see section 4.15.
(4) If 2 or more registered applicants make identical bids on the same lot and the bids are the high bids for the round, the bid that is recorded in the auction computer system as being made first in time will be taken to be the high bid on that lot for the round.
(5) If a bid is disputed:
(a) the auction manager is the sole arbiter; and
(b) the auction manager’s decision is final.
(6) If a person who is not a registered applicant makes a bid for a lot:
(a) the bid is to be ignored; and
(b) the bid does not, by itself, affect further bidding on that lot or the validity of the licence that includes that lot.
Note For the emergency telephone bidding procedure, see section 4.10.
4.18 Eligibility bidding cap
(1) A registered applicant is not entitled to bid in such a way that the total of the lot ratings of the lots on which the applicant is active in any 1 round exceeds the applicant’s eligibility at the time of the bid.
Note As to when an applicant is active, see subsection 1.4 (4).
(2) To ensure that an applicant’s eligibility is not exceeded, ACMA will process the applicant’s bids as follows:
(a) bidding instructions will be processed in order of lot number, starting with the lowest number;
(b) bidding instructions will be processed so that the total of the lot ratings for those bids does not exceed the applicant’s eligibility;
(c) if the lot rating for a bid to be processed would result in the progressive total of lot ratings exceeding the applicant’s eligibility — ACMA will not process that bid or any further bids of the applicant and will treat the bid and those further bids as if they had not been made.
4.19 Bidding activity targets
Subject to the waiver provisions in section 4.21, a registered applicant must bid in such a way during a round that the total of the lot ratings on the lots on which the applicant is active in that round is equal to or greater than the applicant’s activity target for the round.
Note 1 For activity target, see subsection 1.4 (1).
Note 2 A registered applicant who does not bid in the way mentioned in this section may lose eligibility, in accordance with section 4.20.
4.20 Loss of eligibility
(1) A registered applicant’s eligibility for a round (the next round) will be reduced to an amount worked out in accordance with subsection (2), if:
(a) the registered applicant does not meet its activity target in a round (the current round); and
(b) the registered applicant does not exercise a waiver in the current round; and
(c) the registered applicant’s participation in the auction was not suspended under section 4.25 for the current round.
(2) The amount of a registered applicant’s eligibility under subsection (1) for the next round is to be worked out as follows:
where:
E is the registered applicant’s eligibility for the next round; and
R is the sum of the lot ratings of the lots on which the registered applicant was active in the current round; and
P is the eligibility percentage that applied in the current round.
Example
A registered applicant’s eligibility at the start of a round is 20 000 units. The activity requirement for the round is 60% (ie 12 000 units). In the round, the registered applicant’s activity is only 10 000 units and the applicant has not exercised a waiver, so eligibility will be reduced as a penalty for under-activity.
The registered applicant’s new eligibility (E) will be current activity (R — 10 000) divided by the eligibility percentage that applied in the round (P — 0.6), which is 16 667 units. There is nothing the registered applicant can do once the auction is under way to recover eligibility.
(3) A registered applicant who loses eligibility in a round is only entitled to bid in future rounds in such a way that the total lot ratings of the lots on which the applicant is active does not exceed its eligibility as reduced in accordance with this section.
4.21 Waiver
(1) During the bidding period of a round, a registered applicant who would otherwise not meet its activity target may exercise a waiver of the effect of section 4.20.
(2) A registered applicant may continue to exercise waivers until the applicant has used all its waivers fixed by the auction manager under paragraph 2.20 (c).
(3) A registered applicant who exercises a waiver in a round does not lose eligibility in that round.
(4) If an auction manager exercises a waiver in a round on an applicant’s behalf, the applicant’s eligibility for that round is not lost.
(5) If:
(a) a registered applicant bids in such a way that, but for this section, the applicant would not meet its activity target; and
(b) all the waivers fixed by the auction manager for the registered applicant have not been exercised;
the auction manager will exercise a waiver on the registered applicant’s behalf, unless the registered applicant tells the auction manager, during the bidding process, that the waiver is not to be exercised.
(6) A round will not be regarded as the final round if:
(a) there are no bids in the round (and, as a result, the round would, but for this subsection, be regarded as the final round); and
(b) a registered applicant exercises a waiver in the round.
4.22 Withdrawal of bids
(1) During a round, a registered applicant may withdraw its bid on a lot from a previous round only if the bid is the high bid on the lot in that round.
(2) If a registered applicant withdraws a bid in a round in accordance with subsection (1) and no other applicant has made a bid on that lot in the round:
(a) ACMA is taken to be the high bidder in that round for the lot, at the next highest bid (whether the next highest bid was published in the results as a high bid or not); and
(b) ACMA will be identified by the BIN 9999; and
(c) the minimum bid for the lot in the next round is equal to that next highest bid made on the lot in a previous round or, if there is no other bid, the starting bid for the lot; and
(d) the registered applicant may bid again on that lot in a later round; and
(e) the registered applicant withdrawing the bid may lose eligibility, as set out in section 4.23.
4.23 Loss of eligibility on withdrawal
If a registered applicant withdraws a bid in a round, the applicant will not be regarded as being active on that lot and may lose eligibility.
Note For loss of eligibility, see section 4.20.
4.24 Withdrawal penalty
(1) A registered applicant is liable for the withdrawal penalty in subsection (2) if:
(a) the registered applicant withdraws a bid on a particular lot; and
(b) there is a subsequent bid on the lot but no subsequent bid on the lot is equal to or greater than the withdrawn bid.
Note A bid cannot be withdrawn unless it is the high bid for the lot — see section 4.22.
(2) For subsection (1), the withdrawal penalty is an amount equal to the difference between the withdrawn bid and the highest subsequent bid.
(3) A registered applicant is liable for the withdrawal penalty in subsection (4) if:
(a) the registered applicant withdraws a bid on a particular lot; and
(b) there is no subsequent bid on the lot.
(4) For subsection (3), the withdrawal penalty is an amount equal to the amount of the withdrawn bid.
(5) A registered applicant may withdraw a bid on a particular lot more than once, but the applicant is liable for a withdrawal penalty each time.
(6) The amount of all withdrawal penalties imposed on an unsuccessful applicant will be deducted from the applicant’s eligibility payment before any remaining portion of the eligibility payment is refunded.
(7) If the amount of all withdrawal penalties exceeds the eligibility payment, the balance will be taken out of any refundable performance payment, with any amount still owing being a debt due to ACMA on behalf of the Commonwealth that may be recovered by ACMA on behalf of the Commonwealth in a court of competent jurisdiction.
(8) If a withdrawal penalty is incurred by a successful applicant, the amount of the penalty will be added to the balance of the bid price payable by the applicant under section 5.2.
(9) An applicant is not otherwise liable for a withdrawal penalty.
4.25 Suspension of an applicant
(1) If ACMA considers that a registered applicant’s ABN-DSC or transaction code keys have been compromised and cannot be used to authenticate bidding instructions, the auction manager may suspend the applicant’s participation in the auction.
Note Sections 4.8 and 4.28 may also apply in these circumstances.
(2) For subsection (1), the auction manager must tell the applicant:
(a) the reason for the suspension; and
(b) the period of suspension (if any).
4.26 Further Deed of Financial Security or additional performance payment
(1) If, after the start of the auction, the amount secured under a registered applicant’s Deed of Financial Security, or the amount of a registered applicant’s performance payment, falls below 10% of the total of high bids of the applicant recorded in the results of a round, ACMA must tell the applicant by written notice to:
(a) give ACMA a Deed of Financial Security (which may be a further Deed); or
(b) pay a performance payment (which may be an additional performance payment).
Note Subsection (3) explains when a Deed of Financial Security is a further Deed, and whether a performance payment is an additional performance payment.
(2) ACMA must give the notice by fax to a fax number nominated by the registered applicant on its application form.
(3) For a registered applicant who must give ACMA a Deed of Financial Security under subsection (1):
(a) if the applicant has previously paid a performance payment ¾ the amount to be secured by the Deed is equal to the amount of performance payment already paid to ACMA on behalf of the Commonwealth; and
(b) if the applicant has previously given a Deed of Financial Security (an existing Deed) ¾ the amount is to be secured by another Deed of Financial Security (a further Deed), and the amount to be secured by the further Deed is twice the amount secured under the existing Deed; and
(c) the Deed must be given to ACMA by 5.00 pm on the third working day after the date of the notice.
(4) For a registered applicant who must pay a performance payment under subsection (1):
(a) if the applicant has previously given ACMA a Deed of Financial Security ¾ the amount of the performance payment is equal to the amount secured by that Deed; and
(b) if the applicant has previously paid a performance payment to ACMA on behalf of the Commonwealth ¾ the payment is an additional performance payment and the amount of the additional performance payment is the amount of the performance payment already given by the applicant (the previous performance payment); and
(c) the payment must be given to and received by ACMA on behalf of the Commonwealth by 5.00 pm on the third working day after the date of the notice, and in accordance with section 1.9.
Note By section 1.9, the money may be paid by bank cheque or bank transfer. If paid by bank transfer, the applicant must give ACMA evidence that the transfer has been made.
(5) A registered applicant who fails to comply with this section is excluded from taking any further part in the auction and therefore from obtaining a spectrum licence in the allocation process.
(6) On every occasion that the sum of:
(a) the total amount of performance payments and any additional performance payments paid by an applicant; and
(b) the total amounts secured by a Deed of Financial Security and any further Deeds provided by an applicant;
falls below 10% of the total of high bids of the registered applicant recorded in the results of a round, then:
(c) ACMA must give another notice under subsection (1); and
(d) subsections (3) and (4) apply as if the sum of:
(i) the total amount of performance payments and additional performance payments paid by an applicant; and
(ii) the total amounts secured by a Deed of Financial Security and any further Deeds provided by an applicant;
is the amount secured under the existing Deed or the previous performance payment.
Note The effect of this paragraph is that the amount secured by the Deed of Financial Security, or the amount of performance payment, will double each time that ACMA issues a notice under this section.
(7) A registered applicant who fails to give ACMA a further Deed, or pay an additional performance payment to ACMA on behalf of the Commonwealth, in accordance with subsection (6) is excluded from taking any further part in the auction and therefore from obtaining a spectrum licence in the allocation process.
(8) When ACMA receives a further Deed:
(a) the existing Deed ceases to have effect; and
(b) ACMA must tell the person who executed the existing Deed, in writing, that the existing Deed has ceased to have effect.
(9) Sections 2.9, 2.10, 2.12 and 2.13 apply to a further Deed and to an additional performance payment.
4.27 Consequences of exclusion
(1) The entry fee of an applicant who is excluded from obtaining a spectrum licence because the applicant fails to give ACMA a Deed of Financial Security or pay a performance payment in accordance with section 4.26 (an excluded applicant) is not refundable.
(2) The eligibility payment and refundable performance payments (if any) of an excluded applicant are refundable.
(3) However, before giving a refund to an excluded applicant, ACMA must deduct any bid withdrawal penalties from the amount to be refunded.
Note For withdrawal penalties, see section 4.24.
(4) In working out the bid withdrawal penalties deductible under subsection (3), a high bid of the excluded applicant that was current immediately before the applicant was excluded is taken to be withdrawn.
Note Because it is not possible to work out any bid withdrawal penalties until the end of the auction, the eligibility payment cannot be refunded until then.
Division 3 Bringing the auction to an end
4.28 Suspension or cancellation of auction
(1) ACMA or the auction manager may suspend or cancel an auction, or a round of an auction, at any time:
(a) if the Minister in writing directs ACMA or the auction manager to do so; or
(b) because of:
(i) an error in, or technical failure of, the auction computer system; or
(ii) technical failure of the telecommunications system being used for the auction; or
(iii) an event beyond the control of ACMA; or
(c) if ACMA is satisfied that there has been, or is likely to be, a breach of the auction procedures of a kind that could compromise the auction; or
(d) if the auction manager is satisfied that in the circumstances it is appropriate to do so.
(2) If the auction is suspended, ACMA or the auction manager may:
(a) resume the auction from the end of any round which has been completed, and for which the auction manager is satisfied that the results are correct; or
(b) cancel the auction.
Note The auction manager may give the first round after resumption a higher round number if it is administratively expedient to do so.
(3) If the auction is cancelled:
(a) all eligibility payments paid by registered applicants will be refunded; and
(b) the entry fee will not be refunded; and
(c) ACMA may allocate the lots:
(i) by another auction; or
(ii) by tender; or
(iii) by allocation for a pre-determined price or a negotiated price.
Note ACMA may make a determination under section 60 of the Act about allocations other than by auction.
4.29 Closing of auction
(1) The rounds of the auction are to continue until:
(a) the auction is in its last stage; and
(b) no bid is made on any lot on offer; and
(c) no bidder exercises a waiver; and
(d) no applicant remains suspended from the auction.
Note 1 The auction manager fixes the number of stages — see section 2.20 — and may move the auction to the next stage — see section 4.7.
Note 2 For the exercise of waivers, see section 4.21. For suspension of an applicant, see section 4.25.
(2) Once this happens, the auction is considered closed, and the auction manager must tell all registered applicants of this.
(3) An automatic re-bid on a lot by a registered applicant when that applicant is the high bidder on the lot from the previous round does not constitute a bid for paragraph (1) (b).
(4) The exercise of a waiver by the auction manager under subsection 4.21 (5) does not constitute the exercise of a waiver by the bidder for paragraph (1) (c).
(5) If bidding is continuing after 20 rounds, the auction manager may consider it necessary, to achieve a result, to close the auction at the end of a round he or she specifies (the specified closing round).
(6) Before declaring the specified closing round, the auction manager must:
(a) at least 2 rounds before the proposed specified closing round, tell registered applicants that he or she proposes to close the auction at the end of the proposed specified closing round, and ask for their comments within the time (being not less than 1 hour) set by the auction manager; and
(b) take registered applicants’ comments on the proposal into account in deciding whether to close the auction; and
(c) if the auction manager decides to close the auction:
(i) tell all registered applicants of the specified closing round; and
(ii) at the end of the specified closing round, tell all registered applicants that the auction is closed.
(7) If the auction is closed under subsection (6), the registered applicant who is the highest bidder on a lot at the close of the auction is taken to have made the highest final bid on the lot and to be the successful applicant for that lot.
Part 5 After the auction
5.1 Allocation of licence to highest bidder
(1)The registered applicant who holds the highest bid on a lot when the auction closes (the successful applicant) is entitled to be allocated a licence that includes that lot if the applicant pays the balance of the bid price, worked out under section 5.2, for all lots for which the applicant was the successful bidder, in accordance with section 5.3.
(2) However, the registered applicant is not entitled to be allocated the licence if subsection 1.9 (7), (8) or (9) applies.
(3) The licence will take effect on 1 January 2008.
5.2 Calculation of balance of bid price
(1) The balance of the bid price to be paid by a successful applicant is worked out as follows:
(a) ACMA will add up the highest final bids made by the successful applicant;
(b) ACMA will add up the value of the bid withdrawal penalties imposed on the applicant under section 4.24;
(c) ACMA will add the total of the highest final bids and the total of the bid withdrawal penalties;
(d) ACMA will deduct the applicant’s eligibility payment from this total.
(2) The amount remaining is the balance of the bid price.
(3) If the applicant’s eligibility payment is greater than the total of the highest bids and bid withdrawal penalties:
(a) ACMA will refund the difference; and
(b) the applicant is entitled to be allocated a licence without further payment.
5.3 Payment of balance of bid price
(1) ACMA will notify each successful applicant, by receipted mail, of the balance of the bid price.
(2) The balance of the bid price must be paid by a successful applicant to ACMA on behalf of the Commonwealth as follows:
(a) 10% of the balance of the bid price no later than 10 working days after the date of the notice;
(b) the remainder no later than 20 working days after that 10th working day.
(3) If a notice under subsection (1) contains a material error, ACMA will give the successful applicant a revised notice by receipted mail.
(4) If ACMA gives a successful applicant a revised notice, the balance of the bid price must be paid by the successful applicant to ACMA on behalf of the Commonwealth as follows:
(a) if the revised notice is given before the successful applicant has made the 10% payment mentioned in paragraph (2) (a) — 10% of the balance of the bid price no later than 10 working days after the date of the revised notice and the remainder no later than 20 working days after that 10th working day;
(b) if the revised notice is given after the successful applicant has made that 10% payment ¾ the remainder of the bid price no later than 10 working days after the date of the revised notice.
(5) The payment of 10% of the balance of the bid price mentioned in paragraph (2) (a) or (4) (a) must be made in full by the specified time in accordance with section 1.9.
Note By section 1.9, the money may be paid by bank cheque or bank transfer. If paid by bank transfer, the applicant must give ACMA evidence that the transfer has been made.
(6) The remainder of the bid price mentioned in paragraph (2) (b) or (4) (b) must be paid in full by the specified time in accordance with section 1.9.
Note By section 1.9, the money may be paid by bank cheque or bank transfer. If paid by bank transfer, the applicant must give ACMA evidence that the transfer has been made.
5.4 Default by successful applicant
(1) If a successful applicant does not pay any part of the balance of the bid price by the time for paying that part in accordance with section 5.3:
(a) the applicant ceases to be entitled to be allocated a licence at the auction; and
(b) all highest bids made by the applicant will be treated as withdrawn bids and the applicant will be penalised for those bids in accordance with section 4.24; and
(c) any lots so affected will be regarded as defaulted lots and the applicant will be taken to be in default of its financial obligations owed to ACMA on behalf of the Commonwealth under this Determination.
(2) If ACMA holds a refundable performance payment for a successful applicant who is in default, then so much of the monies paid to ACMA on behalf of the Commonwealth as will meet the undischarged liability of the applicant are forfeited.
(3) Any monies paid to ACMA on behalf of the Commonwealth in excess of the undischarged liability of the successful applicant in default must be refunded to the applicant after that liability has been satisfied.
(4) However, if a successful applicant remains in default of its financial obligations under this Determination, the amount remaining owed to ACMA on behalf of the Commonwealth by the successful applicant is a debt due to ACMA on behalf of the Commonwealth and is recoverable by ACMA on behalf of the Commonwealth from the successful applicant in any court of competent jurisdiction.
5.5 Allocation of defaulted lots
ACMA must treat defaulted lots as unallocated and offer them for allocation at another time under section 6.1.
5.6 Refunds to unsuccessful applicants
ACMA must refund to an unsuccessful applicant:
(a) the applicant’s eligibility payment less the amount of any bid withdrawal penalties imposed under section 4.24; and
(b) monies (if any) paid as a refundable performance payment to ACMA on behalf of the Commonwealth, less:
(i) the balance of any withdrawal penalties not covered by the eligibility payment; and
(ii) any other monies owing to ACMA on behalf of the Commonwealth by the applicant in timely discharge of its financial obligations under this Determination.
Part 6 Miscellaneous
6.1 Unallocated lots
A lot offered at an auction but unallocated (an unallocated lot) may be later allocated by ACMA, as ACMA determines:
(a) by another auction; or
(b) by tender; or
(c) by allocation for a pre-determined price or a negotiated price.
Note 1 Unallocated lots include defaulted lots — see section 5.4.
Note 2 ACMA may make determinations under section 60 of the Act about allocations other than by auction.
6.2 Liability of ACMA
ACMA is not liable to pay damages or costs arising from an act or omission of any person in relation to the allocation procedures set out in this Determination.
6.3 Recovery of damages by ACMA
This Determination is without prejudice to any right of action or remedy which ACMA has or may have against any person which arose or arises under the Deed of Acknowledgment, any Deed of Financial Security, statute, common law, equity or otherwise.
6.4 ACMA may obtain information from applicants
(1) This clause applies to an applicant if ACMA has reason to believe that the applicant has information or documents that are relevant to the performance of any of ACMA’s functions under this Determination.
(2) ACMA may, by written notice to an applicant, require the applicant:
(a) to give to ACMA, within the period and in the manner and form specified in the notice, any such information;
(b) to produce to ACMA, within the period and in the manner specified in the notice, any such documents.
(3) An applicant must comply with a requirement under subsection (2).
6.5 Giving of information by ACMA
Before ACMA allocates a licence, it may announce, or publish a notice of:
(a) the name of the person to whom the licence is to be allocated; and
(b) the highest final price bid for the lots included in the licence, or the pre-determined price for the licence, as appropriate.
6.6 Information provided by applicant
(1) An original document, other than a document that establishes a person’s identity, that is given to ACMA by a person for the purposes of the allocation system set out in this Determination (including a document that contains intellectual property) becomes the property of the Commonwealth.
(2) ACMA may use information provided by an applicant for the purposes of ACMA.
6.7 Refunds of payments under Deed of Financial Security
Where an amount paid under a Deed of Financial Security is refundable under this Determination, ACMA must pay that amount to the applicant, or the withdrawn applicant, who gave ACMA the Deed of Financial Security under which the payment was made.
Schedule 1 Procedures for bid transmission (including automatic re-bids and withdrawal of bids) and authentication
(sections 4.9, 4.10 and 4.11)
The aim of these procedures is to ensure that information purporting to represent the instructions of a registered applicant during electronic bidding have actually come from that registered applicant.
1. Connection to the auction computer system
Before the auction commences each registered applicant will log on to the auction computer system through ACMA’s auction website using the Microsoft Internet Explorer web browser version 6 or better, using a minimum of 128 bit SSL encryption.
Authentication will be provided by an Australian Business Number Digital Signature Certificate (ABN-DSC) based on the ITU X.509 Directory Services Standard and issued by a fully accredited Gatekeeper Certification Authority (CA) (see clause 4).
Once connection is established, the registered applicant will be able to:
(a) view, from the auction computer system, the auction results from the latest completed round of bids; or
(b) upload to the auction computer system its bidding instructions during the bidding period of the current round.
A registered applicant may need to interact with the auction computer system through the auction website a number of times during a round to:
(a) make bidding instructions; or
(b) obtain results after the bidding period.
The auction schedule issued by ACMA will provide information to registered applicants about when to bid and when to obtain the bid results for each round.
2. Encryption of Data for Transmission
ACMA will secure the privacy and integrity of each registered applicant’s bid instructions as it is transmitted to ACMA by requiring, as a condition of participation in the electronic auction, that bidders use a ABN-DSC in order to log on to the auction website to make their bids using the auction computer system.
The ABN-DSC is a standard established by the Commonwealth for secure business to government (B2G) transactions. It requires 2 Key Pairs known as:
· authentication keys — the keys used for creating and verifying digital signatures; and
· confidentiality keys — the keys used for encrypting and decrypting messages for confidentiality purposes.
Note Public key encryption works on the basis of 2 complementary keys (very large numbers). The 2 keys are mathematically related, but in a way that cannot be easily deduced. One key must be kept private, while the other can be made public. A message encrypted with 1 part of the key pair can ONLY be decrypted with the other part.
Public key cryptography is implemented by users freely distributing their public key, so that other people can encrypt messages to them with that key. The message can then only be decrypted using the person’s private key which the person or organisation alone holds and which they must protect.
3. Bidding instructions
Each bidding instruction will be entered on the bidding screen in the auction webpage and will be digitally signed and encrypted before transmission.
Note The digital signature will be calculated by a checksum algorithm that calculates a 128 bit number expressing the whole file. It is so sensitive that the change of a full-stop to a comma will result in a substantially different checksum.
The bidding instruction and the attached signature will then be transmitted to the auction computer system. On receipt of the bidding instruction by the auction computer system, ACMA’s auction server will automatically decrypt the data that has been received and verify the authenticity of the digital signature attached to it. A successful verification will indicate that it is highly unlikely that the data has come from someone other than the registered applicant or that it has been intercepted or corrupted during transmission.
Once the bidding instruction has been received and authenticated, the auction computer system will generate a screen confirming receipt of the registered applicant’s bidding instruction, listing the bids made in that instruction. A bidding instruction bearing an authentic ABN-DSC, issued by a Gatekeeper accredited CA, will be taken by ACMA as having originated from that registered applicant and from no other person.
Any online bidding instruction that is not in the format described above will not be accepted for processing under any circumstances.
Note In the Deed of Acknowledgment, each applicant will acknowledge that the mechanisms described above and implemented by ACMA are acceptable to authenticate a bid, and that they will be bound by any bid instruction that passes the authentication checks using the approved mechanism, until they notify ACMA that their digital signature may have been compromised.
4. How to get an ABN-DSC
Only CAs fully accredited under the Commonwealth’s Gatekeeper strategy can register applicants for an ABN-DSC which will be accepted by the ACMA auction system. A list of accredited service providers can be found at Registered applicants must take full responsibility for the management of their ABN-DSC. For example, which staff are authorised to use a digital certificate, what financial delegations they may exercise and how old certificates are revoked or new ones approved as organisational structures evolve, are internal matters for the organisation and not the responsibility of ACMA or the CA.
5. Emergency one-time transaction code keys
For each registered applicant, ACMA will prepare a list of ‘one-time’ transaction code keys for use by that registered applicant only in authenticating its telephone bids should this be required in an emergency. For example, if the Internet connection is lost during a round of the auction or the computer accessing the auction ‘crashes’ unexpectedly.
Each list will contain a minimum of 100 transaction code keys. No 2 lists will be the same. No 2 codes will be the same, except as generated by chance.
Each key will consist of 8 randomly generated letters. The case of the letters will not be significant to their use. Each key will be used once, in the order in which the keys are listed. ACMA will retain a copy of each list and identify that list as having been issued to the registered applicant.
6. Using Transaction Code Keys
Registered applicants bidding by telephone must identify themselves to the ACMA operator using the next available transaction code key when asked.
Once a transaction code key is used, the registered applicant will strike through that key on the list and note the round and the date and time that it was used.
When ACMA is contacted by a registered applicant wanting to make bidding instructions, ACMA will authenticate the instructions using the transaction code key by:
(a) looking up the list of keys for that registered applicant; and
(b) comparing the key provided by the registered applicant with the next available key on the list.
If the key matches, the instructions will be regarded as authentic. Once a transaction code key is used by a registered applicant, ACMA will note the round and the time and date that the key was used.
Registered applicants may not re-use a transaction code key or use a key other than the next key in the sequence. Any other key will be regarded as invalid. Any communication containing an invalid key will be ignored. ACMA will advise the registered applicant by telephone that the communication has been ignored, and may suspend the registered applicant’s participation until new transaction code keys can be delivered.
In the period between a registered applicant notifying ACMA that the keys have been compromised and ACMA providing the registered applicant with replacement keys, the registered applicant’s participation in the auction will be suspended, without incurring a waiver.
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