EXPLANATORY STATEMENT
Issued by the Australian Communications and Media Authority
Radiocommunications Act 1992
Radiocommunications (Spectrum Access Charges – 3.4 GHz Band) Determination 2015 (No.1)
Purpose
The purpose of the Radiocommunications (Spectrum Access Charges – 3.4 GHz Band) Determination 2015 (No.1) (the Determination) is to fix spectrum access charges payable by licensees for the re-issue of expiring spectrum licences in the 3.4 GHz band (3425–3492.5 MHz and 3542.5–3575 MHz).
Legislative provisions
Subsection 82(1) of the Radiocommunications Act 1992 (the Act) allows the Australian Communications and Media Authority (the ACMA) to re-issue a spectrum licence to the person to whom it was previously issued if the licence was used in the provision of a service included in a class of services specified in a determination by the Minister under subsection 82(3) of the Act, or if the ACMA is satisfied that special circumstances exist as a result of which it is in the public interest for that person to continue to hold the licence.
Subsection 82(3) of the Act provides for the Minister to determine, by written instrument, a specified class of services for which re-issuing spectrum licences to the same licensees would be in the public interest.
Subsection 294(1) of the Act provides that the ACMA may make determinations to fix spectrum access charges payable by licensees for issuing (and re-issuing) spectrum licences and to specify the times when spectrum access charges are payable.
Subsection 294(2) of the Act states that the Minister may give written directions to the ACMA about the matters dealt with in such determinations.
The Determination has been made by the ACMA in accordance with subsection 294(1) of the Act and in accordance with subsection 33(3) of the Acts Interpretation Act 1901 (the AIA).
Subsection 33(3) of the AIA relevantly provides that where an Act confers a power to make a legislative instrument, the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
Background
Existing spectrum licences in the 3.4 GHz band are due to expire on 13 December 2015. The ACMA is reviewing and updating the technical framework of the 3.4 GHz band and this updated technical framework will apply to any re-issued or reallocated licences in the band from 14 December 2015. This review will help to ensure that the framework remains current and is capable of managing interference across the tenure period of a spectrum licence, which may be up to 15 years.
As part of improved management of the 3.4 GHz band the ACMA consolidated some licences in this band for spectral efficiency. After this consolidation process, 26 of the 3.4 GHz band licences of NBN Co Spectrum Pty Ltd were consolidated to a single licence (licence No. 9083625) (the NBN Co Spectrum Pty Ltd licence). This licence and 15 of the licences originally issued to AKAL Pty Ltd are to be offered for re-issue.
As mentioned above, under subsection 82(1) of the Act, the ACMA may re-issue licences to the same licensees without undertaking a price-based allocation process, if the licence was used in the provision of a service included in a class of services specified in a determination made under subsection 82(3) of the Act.
On 9 February 2012, the then Minister for Broadband, Communications and the Digital Economy made the Radiocommunications (Class of Services) Determination 2012 under subsection 82(3) of the Act. In that determination, the Minister specified several classes of services for which re-issuing spectrum licences to the same licensees would be in the public interest. The classes of services include wireless broadband services in the 3.4 GHz band.
Based on the ACMA’s analysis of available evidence of use of the licences in the provision of
services, the 3.4 GHz band licences specified in the Determination are able to be re-issued to the incumbent licensees. In considering whether to re-issue the relevant licences under paragraph 82(1)(a) of the Act, the ACMA consulted with the existing licensees and relied upon information provided, including:
- the number of registered and deployed devices under each relevant licence;
- maps detailing the cumulative coverage area of the services offered by the licensees;
- information on the types of equipment and technology deployed.
On 9 February 2012 the Minister also made, under subsection 294(2) of the Act, the Radiocommunications (Spectrum Access Charges) 2012 Direction (the Pricing Direction). The Pricing Direction specifies the amount that the Minister considered to be the value of the spectrum in relation to the spectrum bands specified, and directs the ACMA to ensure that the spectrum access charges for re-issued licences reflect that amount.
The Pricing Direction defines a formula for fixing the spectrum access charge payable by a licensee in relation to a re-issued spectrum licence. The formula is based on a “$/MHz/Pop” calculation where:
- $ = Australian dollars;
- MHz = the bandwidth of spectrum authorised for use in the relevant licence area; and
- Pop = the population of the licence area, to be determined by the ACMA at the time the ACMA determines the spectrum access charges under subsection 294(1) of the Act having regard to the available population data at that time.
The amount set by the Pricing Direction for licences in the 3.4 GHz band is $0.03/MHz/Pop, based on a 15-year licence period. In compliance with the Pricing Direction, the amount of spectrum access charge payable for the re-issue of a spectrum licence is calculated by multiplying the unit value of the spectrum in relation to the 3.4 GHz band (being $0.03/MHz/Pop) by the bandwidth of spectrum authorised in the licence for use by the licensee and multiplying that figure by the population of each licence area specified in the spectrum licence (as determined by section 5 of the Determination).
In the case of the NBN Co Spectrum Pty Ltd licence, the spectrum access charge calculations are undertaken separately for each geographic area covered in the licence, and then those individual amounts aggregated to determine the spectrum access charge for the overall licence.
Consultation
The ACMA sought comment from each licensee about matters pertaining to the calculation of the spectrum access charges, the amounts of the spectrum access charges for each of the licences and the payment date.
On 30 March the ACMA sought comments from AKAL Pty Ltd (through its parent company, Optus) and NBN Co Spectrum Pty Ltd about the matters pertaining to the spectrum access charges, the date by which the due amount would be payable and the making of the determination.
On 9 April 2015, Optus on behalf of AKAL Pty Ltd advised that it agreed with the calculation methodology and the proposed quantum of the spectrum access charge. Optus had no comments on the proposed payment date for spectrum access charges of 31 July 2015.
On 15 April 2015, NBN Co advised that it agreed with the amount of its spectrum access charge and the proposed payment date.
Regulation impact
The ACMA has consulted with the Office of Best Practice Regulation (the OBPR) on the requirement for a Regulation Impact Statement (RIS). The OBPR advised that the Determination does not warrant the preparation of a RIS because it is likely to have only minor and machinery impacts. The reference number for the OBPR’s assessment is 18035.
Detailed description of the Determination
Details of the provisions of the Determination are set out in Attachment A.
Statement of compatibility with human rights
In accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, the ACMA has prepared a Statement of Compatibility with Human Rights to consider the human rights implications of the Determination. The Statement, set out in Attachment B, concludes that Determination does not raise any human rights issues and is therefore regarded as compatible with human rights.
ATTACHMENT A
DETAILS OF THE RADIOCOMMUNICATIONS (SPECTRUM ACCESS CHARGES - 3.4 GHz BAND) DETERMINATION 2015 (No.1)
Section 1 – Name of Determination
This section names the Determination the Radiocommunications (Spectrum Access Charges – 3.4 GHz Band) Determination 2015 (No.1).
Section 2 - Commencement
This section provides that the Determination will commence on the day after it is registered on the Federal Register of Legislative Instruments.
Section 3 – Expiry
This section states that the Determination expires at the end of 13 December 2015. This is the date on which the spectrum licences would otherwise expire, if not re-issued to the same licensees for a further term.
Section 4 – Definitions
This section sets out the key defined terms used in the Determination.
Section 5 - Population of a licence area or geographic area for a spectrum licence
Subsection 5(1) provides that the population estimate for a licence area of a spectrum licence, mentioned in column 1 of the table in section 6 is the corresponding number in column 2 of that table.
Subsection 5(2) provides that the population of a geographic area mentioned in column 1 in the table in section 7 is the corresponding number mentioned in column 2.
The ACMA is required by the Pricing Direction to determine population estimates for each licence area of a spectrum licence at the time the Determination is made.[1]
The ACMA first derives an estimated population count for each licence area which is consistent with the population count and dispersion enumerated in Census 2011.[2] To comply with the Pricing Direction the ACMA has considered how population numbers have grown across the intervening period (i.e. between the most recent available Census and a time proximate to the making of the Determination).
The ratio of the projected national resident population at September 2014 to the Census 2011 national population count provides an indicator of how population has grown across this intervening period.[3] This ratio is then applied to the estimate of population in each licence area at August 2011 to derive an estimate of population in the licence area as at March 2015 (being the end of the most recent complete quarter before the Determination was made).
The source of data and an example of the population calculation for a licence area is provided in the following table:
The unit amounts applied by the ACMA in calculating the spectrum access charges payable by a licensee mentioned in sections 6 and 7 is $0.03/MHz/Pop, where $0.03 is the value of the spectrum in Australian dollars for the re-issue of a licence for a period of 15 years.
Section 6 - Spectrum access charges payable by AKAL Pty Ltd
This section sets out the amount of spectrum access charge payable by AKAL Pty Ltd for the re-issue of the 15 spectrum licences it holds and to which the Determination applies, by reference to a table listing the licence number (column 1), the population of the licence area to which the licence relates (column 2), the authorised bandwidth (column 3), and the charge payable based on those factors (column 4), applying the Pricing Direction.
Section 7 - Spectrum access charge payable by NBN Co Spectrum Pty Ltd
This section provides the amount of spectrum access charge payable by NBN Co Spectrum Pty Ltd for the re-issue of its spectrum licence number 9083625 by reference to a table listing each geographic area to which the licence relates (column 1), the population of the geographic area (column 2), the authorised bandwidth (column 3), and the charge payable based on those factors (column 4). The amount of spectrum access charge payable for the re-issue of the spectrum licence is calculated by multiplying the value of the spectrum in relation to the 3.4 GHz band (being $0.03/MHz/Pop) by the bandwidth mentioned in column 3 for each geographic area, by the population mentioned in column 2 for each geographic area mentioned in column 1. Once the spectrum charge amounts mentioned in column 4 of the table are separately calculated for each geographic area this way, these charges are added up to arrive at the final spectrum access charge amount of $14,706,748.85 for the overall spectrum licence.
Section 8 – When spectrum access charge is payable
This section specifies the date that payment is required for spectrum access charges. The ACMA has determined that full payment of the spectrum access charge for each licence to be re-issued is to be made on or before 31 July 2015.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Radiocommunications (Spectrum Access Charges –3.4 GHz Band) Determination 2015 (No.1).
This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative Instrument
The Radiocommunications (Spectrum Access Charges – 3.4 GHz Band) Determination 2015 (No.1) (the Determination) fixes spectrum access charges payable by licensees for the re-issue of expiring spectrum licences in the 3.4 GHz band (3425–3492.5 MHz and 3542.5–3575 MHz).
Human Rights Implications
The Determination does not engage any of the applicable rights or freedoms.
Conclusion
The Determination is compatible with human rights as it does not raise any human rights issues.
[1] See paragraph (c) of the definition of “$/MHz/Pop” in section 5 of the Pricing Direction.
[2] Australian Bureau of Statistics, Census 2011, Basic Community, Aboriginal and Torres Strait Islander Peoples (Indigenous) and Time Series Profiles (catalogue number 2069.0.30.008).
[3] This is based on information from the Australian Bureau of Statistics, Census 2011, Basic Community, Aboriginal and Torres Strait Islander Peoples (Indigenous) and Time Series Profiles (catalogue number 2069.0.30.008), the Australian Bureau of Statistics, Australian Demographic Statistics, March 2015, catalogue 3101.0, released 26 March 2015 and the Budget Paper No 3, Australia’s Federal Relations 2014-15; 13 May 2014, page 107.