EXPLANATORY STATEMENT
Australian Communications and Media Authority Act 2005
Australian Communications and Media Authority (Spectrum Allocation – Post-Auction Review) Direction No. 1 of 2013
Issued by the authority of the Minister for Broadband, Communications
and the Digital Economy
Authority
Section 14 of the Australian Communications and Media Authority Act 2005 (the Act) provides that the Minister for Broadband, Communications and the Digital Economy (the Minister) may give written directions to the Australian Communications and Media Authority (the ACMA) in relation to the performance of its functions and the exercise of its powers.
Purpose
The purpose of this Direction is to direct the ACMA that it must report to the Minister on the appropriate procedures for the allocation of spectrum licences for the relevant spectrum by
1 September 2014.
Background
On 19 November 2011, the Minister declared spectrum in the 700 MHz band (in the ranges 703 MHz to 748 MHz and 758 MHz to 803 MHz) to be re-allocated by issuing spectrum licences. This spectrum is commonly referred to as the ‘digital dividend’ spectrum.
On 19 December 2012, the ACMA made the Radiocommmunications (Spectrum Licence Allocation—Combinatorial Clock Auction) Determination 2012 under sections 60 and 294 of the Radiocommunications Act 1992 (the Act). This determination set out the procedures the ACMA would apply in its allocation of the digital dividend spectrum (as well as spectrum in the 2.5 GHz band) and in fixing the spectrum access charges payable by licensees for issuing the spectrum licences. Shortly thereafter, the ACMA published an auction guide in which it stated, “Prospective bidders should not assume that unallocated lots will be offered for allocation soon after the auction, or that they will be offered for allocation at less than the initial prices set by the ACMA for the auction”.
The auction for the digital dividend (including spectrum in the 2.5 GHz band) commenced on 23 April 2013. The results of the auction were announced by the ACMA on 7 May 2013. Two lots of 15 MHz (30 MHz in total) in the 700 MHz band remain unallocated following the conclusion of the auction (referred to in the present Direction as the ‘relevant spectrum’).
This Direction requires the ACMA to report to the Minister by 1 September 2014 on the appropriate procedures for the allocation of spectrum licences for the relevant spectrum. Section 60 of the Act requires the ACMA to determine the procedures to apply in allocating spectrum licences by auction, tender or by allocation for a pre-determined price or a negotiated price. In reporting to the Minister on appropriate procedures for the allocation of licences for the relevant spectrum, the ACMA is required to have regard to both the prices achieved at the digital dividend and any prevailing market circumstances that may have an impact on the value of the relevant spectrum.
This Direction is a legislative instrument under the Legislative Instruments Act 2003 but it is not subject to disallowance: item 41 of the table in subsection 44(2) of that Act specifies that ministerial directions to any person or body are not subject to disallowance.
Consultation
The Direction was released for public consultation by the Minister on 24 June 2013. Four submissions were received in response. The submissions were from industry participants (SingTel Optus Pty Ltd, Telstra Corporation Ltd, Vodafone Hutchison Australia Pty Ltd) and a member of the public. Two industry participants believed that the ACMA should be required by the Direction to publically consult in preparing its report. This was considered not necessary given the ACMA would ordinarily undertake public consultation in preparing such a report. Other submissions recommended deferring the time by when the report is to be made, specifying the particular use for the spectrum, making the final report publically available and having the report undertaken by a body other than the ACMA. Following consideration of these submissions, the Minister concluded no change was required to be made to the Direction that was publically released.
Notes on Sections
Section 1 provides for the title of the Direction.
Section 2 provides that the Direction commences on the day after it is registered. It is anticipated that the Direction will be issued to the ACMA on that same day.
Section 3 provides that the Direction ceases to have effect as if repealed by another instrument on 1 December 2014.
Section 4 defines the terms used in the Direction.
The term ‘relevant spectrum’ is defined to mean the parts of the spectrum from 733 MHz up to and including 748 MHz and from 788 MHz up to and including 803 MHz. This is the 2 × 15 MHz of spectrum that remained unallocated following the conclusion of the digital dividend auction.
Section 5 specifies the direction.
Section 5 requires the ACMA to report to the Minister by 1 September 2014 on the appropriate procedures for the allocation of spectrum licences for the relevant spectrum, having regard to both the prices achieved for the spectrum allocated as a result of the digital dividend auction and the prevailing market circumstances that may have an impact on the value of the relevant spectrum at the time of the report.
Overview
The Australian Communications and Media Authority (Spectrum Allocation – Post-Auction Review) Direction No. 1 of 2013, issued under Section 14 of the Australian Communications and Media Authority Act 2005, was enacted to address the remaining allocation of spectrum in the 700 MHz band following the digital dividend auction. The Minister for Broadband, Communications and the Digital Economy directed the Australian Communications and Media Authority (ACMA) to report on the appropriate procedures for the allocation of spectrum licences for the unallocated 30 MHz in the 700 MHz band, referred to as the 'relevant spectrum', by 1 September 2014. The policy objective of the Direction is to ensure that the ACMA considers both the prices achieved at the auction and prevailing market circumstances when determining these procedures. The Direction was released for public consultation, with four submissions received, though no changes were made based on the feedback.
This Direction is a legislative instrument under the Legislative Instruments Act 2003 and, as specified in item 41 of the table in subsection 44(2) of that Act, it is not subject to disallowance. Section 2 of the Direction states that it commences on the day after registration, with an anticipated issuance to the ACMA on the same day. Section 3 specifies that the Direction ceases to have effect as if repealed by another instrument on 1 December 2014. Section 4 defines the term 'relevant spectrum' as the parts of the spectrum from 733 MHz up to and including 748 MHz and from 788 MHz up to and including 803 MHz, which remained unallocated post-auction. Section 5 provides the directive for the ACMA to report to the Minister by the specified date.
Scope and Application
The Australian Communications and Media Authority (Spectrum Allocation – Post-Auction Review) Direction No. 1 of 2013 applies to the Australian Communications and Media Authority (ACMA) and pertains to the allocation of spectrum licences for the relevant spectrum, which consists of 2 × 15 MHz of spectrum that remained unallocated following the conclusion of the digital dividend auction. This Direction is issued under the authority of the Minister for Broadband, Communications and the Digital Economy, pursuant to Section 14 of the Australian Communications and Media Authority Act 2005. It is a legislative instrument and is not subject to disallowance. The Direction requires the ACMA to report to the Minister by 1 September 2014 on the appropriate procedures for the allocation of spectrum licences for the relevant spectrum, having regard to both the prices achieved for the spectrum allocated as a result of the digital dividend auction and the prevailing market circumstances that may have an impact on the value of the relevant spectrum at the time of the report. The Direction applies nationally across Australia and aims to ensure a fair and transparent process for the allocation of the remaining spectrum.
Key Provisions
The Australian Communications and Media Authority (ACMA) Act 2005 allows the Minister for Broadband, Communications and the Digital Economy to issue directions to the ACMA regarding its functions and powers, as per Section 14 of the Act. Under this provision, the Minister issued Direction No. 1 of 2013, which mandates the ACMA to submit a report to the Minister by 1 September 2014 on suitable procedures for allocating spectrum licences for the unallocated spectrum, specifically the 'digital dividend' spectrum in the 700 MHz band. This spectrum includes the 703 MHz to 748 MHz and 758 MHz to 803 MHz ranges. The Minister's decision to direct the ACMA on this matter follows the re-allocation of the spectrum declared on 19 November 2011, and subsequent procedures established by the ACMA in December 2012, which set out the allocation process for this spectrum.
The ACMA is required to develop a comprehensive report considering the auction results from the digital dividend and prevailing market conditions that could affect the value of the relevant spectrum. This directive is in line with Section 60 of the Act, which mandates the ACMA to establish procedures for spectrum licence allocation through auctions, tenders, or fixed or negotiated prices. The report must include insights into the appropriate allocation methods for the remaining unallocated spectrum following the digital dividend auction, which totals 30 MHz (two lots of 15 MHz each).
The Direction does not mandate public consultation in preparing the report, although the ACMA typically engages in such consultations. Submissions from industry participants and the public suggested various recommendations, such as deferring the report deadline, specifying spectrum usage, making the report public, and having an external body prepare it. However, the Minister decided not to amend the Direction based on the feedback received.
From a legislative standpoint, Section 1 of the Direction specifies its title, while Section 2 outlines its commencement date, anticipated to be the day after its registration. Section 3 states that the Direction will cease to have effect as if repealed by another instrument on 1 December 2014. Section 4 defines terms used in the Direction, particularly 'relevant spectrum,' which refers to the unallocated parts of the spectrum ranging from 733 MHz to 748 MHz and 788 MHz to 803 MHz. Finally, Section 5 specifies the direction for the ACMA to report to the Minister on the appropriate procedures for spectrum licence allocation by the stipulated date, considering the auction prices and market conditions.
In terms of obligations and consequences, the ACMA is required to produce a report by the specified deadline. Failure to comply may result in administrative or legal consequences, although the Direction does not explicitly detail such penalties. It is also noteworthy that the Direction is a legislative instrument under the Legislative Instruments Act 2003, but it is not subject to disallowance as per item 41 of the table in subsection 44(2) of that Act.