EXPLANATORY STATEMENT
Issued by the Australian Communications and Media Authority
Radiocommunications Act 1992
Radiocommunications (Spectrum Access Charges – 3.4 GHz Band) Determination 2015 (No.2)
Purpose
The purpose of the Radiocommunications (Spectrum Access Charges – 3.4 GHz Band) Determination 2015 (No.2) (the Determination) is to fix spectrum access charges payable for the re-issue of two expiring spectrum licences in the frequency ranges 3425-3492.5 MHz and 3542.5-3575 MHz (3.4 GHz band) to the licensee, AKAL Pty Ltd ACN 094 107 794 (AKAL).
Legislative provisions
Subsection 82(1) of the Radiocommunications Act 1992 (the Act) provides for 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 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 that the Minister may 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 spectrum licences and specify the times when spectrum access charges are payable. Subsection 294(2) of the Act provides that the Minister may give written directions to the ACMA about the matters dealt with in determinations made under subsection 294(1). Subsection 294(4) requires the ACMA to ensure that determinations made under subsection 294(1) comply with any directions in force under section 294.
The Determination has been made by the ACMA under subsection 294(1) of the Act in accordance with applicable directions, and specifies the spectrum access charges payable by AKAL for re-issue of two spectrum licences in the 3.4 GHz band.
The Determination is a disallowable legislative instrument under the Legislative Instruments Act 2003.
Background
Two spectrum licences currently held by AKAL will expire on 13 December 2015. Based on the ACMA’s analysis of available evidence of use, it decided to re-issue the two licences (identified by licence numbers) specified in the Determination to AKAL.
Under subsection 82(1) of the Act, the ACMA may re-issue a licence to the same licensee 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; or
- the ACMA is satisfied that special circumstances exist as a result of which it is in the public interest for the existing licensee to continue to hold the licence.
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:
- mobile voice and data communications services in the 800 MHz, 1800 MHz and 2 GHz bands;
- wireless broadband services in the 2.3 GHz and 3.4 GHz bands; and
- satellite services in the 27 GHz band.
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;
- information on the types of equipment and technology deployed;
- depictions of the wireless network configurations adopted for each relevant licence; and
- charts showing sample data throughput traces over a 24 hour period for each relevant licence.
On 9 February 2012 the then Minister also made, under subsection 294(2) of the Act, the Radiocommunications (Spectrum Access Charges) Direction 2012 (the Pricing Direction). The Pricing Direction specifies the amounts 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 in those bands reflect those amounts.
The Pricing Direction sets out 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 each of the two spectrum licences held by AKAL (licence numbers 8100173 and 8100189) 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 of spectrum authorised in each spectrum licence by the population of each licence area. The population of the licence area is determined in accordance with section 5 of the Determination.
Documents incorporated by reference
The following document is incorporated by reference:
- Radiocommunications (Spectrum Access Charges) Direction 2012.
Consultation
The ACMA sought comment from Singtel Optus Pty Ltd (Optus) as the parent company of AKAL (AKAL is a wholly-owned subsidiary of Optus) 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. Optus advised the ACMA that it had no comment in respect of the spectrum access charges.
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 16044.
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 purpose of the Determination is to fix the spectrum access charges payable by licensees for the re-issue of expiring spectrum licences in the 3.4 GHz band, in accordance with section 294 of the Act and the Pricing Direction. Specifically, the Determination fixes the spectrum access charge payable by AKAL for the re-issue of two licences in the 3.4 GHz band.
The ACMA is satisfied that the Determination does not engage any of the applicable human rights or freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, and has concluded that the Determination is compatible with human rights as it does not raise any human rights issues.
Detailed description of the Determination
Details of the provisions of the Determination are set out below.
DETAILS OF THE RADIOCOMMUNICATIONS (SPECTRUM ACCESS CHARGES — 3.4 GHz BAND) DETERMINATION 2015 (No.2)
Section 1 – Name of Determination
This section names the Determination the Radiocommunications (Spectrum Access Charges – 3.4 GHz Band) Determination 2015 (No.2).
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 30 June 2016.
Section 4 – Definitions
This section sets out the key terms used in the Determination.
Section 5 - Population of a licence area for a spectrum licence
This section provides that the population estimate of 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.
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 the 2011 Census published by the Australian Bureau of Statistics.[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, being September 2015).
The ratio of the projected national resident population at September 2015 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 area as at September 2015 (being the end of the most recent complete quarter before the Determination is made). Consistent with conventions applied in demography, population estimates and forecasts are rounded to whole numbers.
A worked example of the population calculation for a particular licence area is provided in the following table along with source details:
The unit amount applied by the ACMA in calculating the spectrum access charges payable by a licensee is $0.03/MHz/Pop, where $0.03 is the value of the spectrum in Australian dollars for the re-issue of a licence for a period of 15 years. The value of the spectrum is specified in the Pricing Direction.
Section 6 - Spectrum access charge payable by AKAL Pty Ltd
This section sets out the amount of spectrum access charge payable by AKAL Pty Ltd for the re-issue of two of the spectrum licences it holds by reference to a table listing the licence number (column 1), the population of the licence area to which the licence relates (column 2), the authorised bandwidth (column 3), and the charge payable based on those factors (column 4), applying the Pricing Direction.
Section 7 – When spectrum access charge is payable
This section specifies the date that payment is required for spectrum access charges. The ACMA has determined that full payment of the spectrum access charge for each of the two licences to be re-issued is to be made on or before 18 November 2015.
[1] See paragraph (c) of the definition of “$/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, December 2014, catalogue 3101.0, released 25 June 2015 and the Budget Paper No 3, Australia’s Federal Relations 2015-16; 12 May 2015, page 97. Note that the annual population growth rate sourced from the Budget is effectively converted to a quarterly rate and then applied for two quarters from the latest available estimate of national population from the ABS (at December quarter 2014) to September 2015 (as required in the 2012 Direction).