EXPLANATORY STATEMENT
Issued by the Australian Communications and Media Authority
Radiocommunications Act 1992
Radiocommunications (Spectrum Access Charges – 800 MHz Band) Determination 2012 (No. 2)
Purpose
The purpose of the Radiocommunications (Spectrum Access Charges – 800 MHz Band) Determination 2012 (No. 2) (the Determination) is to fix spectrum access charges payable by a licensee for the re-issue of expiring spectrum licences in the 800 MHz band.
Legislative Provisions
Subsection 82(1) of the Radiocommunications Act 1992 (the Act) provides for the Australian Communications and Media Authority (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 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 re-issuing spectrum licences and specify the times when spectrum access charges are payable.
Subsection 294(2) of the Act allows the Minister to give written directions to the ACMA about the matters dealt with in determinations.
The Determination is a legislative instrument under the Legislative Instruments Act 2003.
Background
In April and May 1998 the Australian Communications Authority auctioned 15-year spectrum licences for the 800 MHz band. The current spectrum licences in force for the 800 MHz band expire on 17 June 2013.
Under the Act, there are two options available to the ACMA for handling these spectrum licences upon expiry.
- Re-issue licences to the same licensees without undertaking a price-based allocation process, if:
- the licence is used to provide a service which is included in the class of services for which the Minister determines re-issuing licences to the same licensees would be in the public interest (paragraph 82(1)(a) of the Act); or
- it 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 (paragraph 82(1)(b) of the Act).
- If neither of the above conditions is met, undertake a market-based re-allocation process (generally via auction) in accordance with section 60 of the Act.
On 9 February 2012, the Minister for Broadband, Communications and the Digital Economy made a 'class of services' determination (Radiocommunications (Class of Services) Determination 2012). In this class of services determination, the Minister determined a specified class of services for which re-issuing spectrum licences to the same licensees would be in the public interest. The class 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.
The making of this class of services determination allowed the ACMA to begin re-issue considerations under paragraph 82(1)(a) of the Act into whether a licence has been used to provide a relevant service. In this assessment the ACMA consulted with the existing licensee and relied on information they provided in this process, including:
- the number of registered and deployed devices under each relevant licence;
- maps detailing the cumulative coverage area of the services offered by licensee;
- information on the types of equipment and technology deployed; and
- links to promotional material regarding relevant services provided by licensee.
The licensee for the licences included in the Determination has established use for the purposes of paragraph 82(1)(a) of the Act enabling the ACMA to further progress re-issue of the licences.
On 9 February 2012 the Minister gave the ACMA a Direction under subsection 294(2) of the Act (Radiocommunications (Spectrum Access Charges) Direction 2012) (the Ministerial Direction) detailing certain specified amounts that must be reflected in spectrum access charges fixed by the ACMA under subsection 294(1) of the Act. These amounts were the Minister’s considered view of the value of the spectrum in the relevant bands. These amounts were determined by the Minister after extensive consultation with relevant licensees and a period for public comment and having regard to all relevant matters including advice received from the Department of Broadband, Communications and the Digital Economy (DBCDE); advice from a specially established inter-departmental Evaluation Committee; expert independent advice from Plum Consulting and the values currently established by the market for relevant spectrum bands. The Minister was also guided by the objects of the Act.
The 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.
Consultation
The Ministerial Direction which defines the formula for fixing the spectrum access charge payable by a licensee in relation to a re-issued spectrum licence was the subject of extensive consultation with licensees and the public. As specified in the Explanatory Statement to the Ministerial Direction the DBCDE provided licensees and the public with valuation reports concerning the 800 MHz and 1800 MHz band, a synopsis describing the methodology employed by Plum Consulting (which provided expert advice to DBCDE about the value of the spectrum licences) and the draft direction for their comment. As noted in the consultation section of the Explanatory Statement for the Ministerial Direction, comments received during the consultation process were taken into consideration by the Minister in the making of the Direction.
In complying with the Ministerial Direction the ACMA has employed an open and consultative approach with the licensee who is impacted by the Determination. The licensee was consulted in relation to the making of the Determination. The details of the calculation of the spectrum access charge for each licence were provided in a letter to the licensee who will be required to pay the spectrum access charges detailed in the Determination. In this letter the ACMA sought comment 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. The comments the ACMA received were considered in the making of the Determination.
Regulation impact
In relation to the Determination the ACMA 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 for the OBPR’s assessment is ID 13994.
Detailed Description of the Determination
Details of the Determination are set out in Attachment A.
Statement of compatibility with human rights
Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires the rule maker in relation to a legislative instrument to which section 42 (disallowance) of the Legislative Instruments Act 2003 applies to cause a statement of compatibility to be prepared in respect of that legislative instrument. This statement is in Attachment B.
ATTACHMENT A
DETAILS OF THE RADIOCOMMUNICATIONS (SPECTRUM ACCESS CHARGES – 800 MHz BAND) DETERMINATION 2012 (No.2)
Section 1 – Name of Determination
This section provides that the Determination is to be cited as the Radiocommunications (Spectrum Access Charges – 800 MHz Band) Determination 2012 (No. 2).
Section 2 - Commencement
This section states that the Determination will commence on the day after it is registered.
Section 3 – Definitions
This section provides definitions for the terms used in the Determination.
Section 4 - Population of a licence area for a spectrum licence
This section provides the population estimate for the relevant licence area.
Population data from the most recently conducted Census for which data have been released by the Australian Bureau of Statistics (ABS) are overlaid with the boundary of the licence area to derive an estimated population count in the licence area at the time of the Census conducted by the ABS in August 2011. The estimate of the population in the licence area is based on aggregating the total population count in each Census Statistical Area Level 1 (the smallest available geographic area) that is part of the licence area. This derives an estimated population count for the licence area consistent with the population count and dispersion enumerated in Census 2011[1].
The Ministerial Direction requires the ACMA to apply population estimates for each licence area at the time the Determination is made. To comply with the Ministerial Direction the ACMA has provided an indicator of how population has grown across the intervening period (i.e. between the most recent available Census and a time proximate to the making of the Determination).
Estimates of resident population at the national level are published by the ABS on a quarterly basis. At the date of the Determination the latest available national estimate of resident population relates to March 2011.[2] Given the quarterly release cycle of updated population estimates from the ABS, the ACMA has applied a population estimate as at the end of the most recent complete quarter. Consistent with the Ministerial Direction, this ensures a population estimate at the time the Determination is made is applied in calculating spectrum access charges. A population estimate as at September 2012 has been applied. The short-term forecast applied in the Determination is based on the population forecasts published in the Commonwealth Budget released in May 2012[3].
The Budget provides forecasts of population levels at calendar year end from which the ACMA derives an annual across-the-year growth rate which is unrounded in application. Based on the latest budget forecast the across-the-year population growth for calendar year 2012 is 1.46258%. A quarterly equivalent rate is then applied for each quarter for which the ABS has not yet published an estimate of resident population and for which a forecast population is required for the purpose of making a spectrum access charge determination consistent with the Minister’s Direction. In this context the ACMA has forecasted population beyond March 2012 (i.e. for June and September 2012).
The ratio of the projected national resident population at September 2012 to the Census 2011 national population count of 21,507,713 provides an indicator of how population has grown across the intervening period (i.e. between the most recent available Census and a time proximate to the date of the Determination). This ratio is then applied to the population estimate in the licence area at August 2011 to derive an estimate of population in the licence area as at September 2012. The methodology used for the population calculation for the licence area is provided in the following table
Section 5 - Spectrum access charges payable by Vodafone Hutchison Australia Pty Limited
This section provides the amount of spectrum access charge payable by Vodafone Hutchison Australia Pty Limited for the re-issue of each spectrum licence. The same calculations are applied for each licence as set out in section 5.
Section 6 – When spectrum access charge is payable
This section provides 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 5 June 2013.
Section 7 – Expiry
This section provides that this Determination ceases to have effect at the end of 17 June 2013 when the current licences expire.
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 – 800 MHz Band) Determination 2012 (No. 2)
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
Subsection 82(1) of the Radiocommunications Act 1992 (the Act) provides for the Australian Communications and Media Authority (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 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 re-issuing spectrum licenses and specify the times when spectrum access charges are payable. Subsection 294(2) of the Act allows the Minister to give written directions to the ACMA about the matters dealt with in determinations.
The Radiocommunications (Spectrum Access Charges – 800 MHz Band) Determination 2012 (No. 2) (the Determination) fixes spectrum access charges payable by a particular licensee for the re-issue of certain expiring spectrum licences in the 800 MHz band.
Subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011 requires the rule-maker in relation to a legislative instrument to which section 42 (disallowance) of the Legislative Instruments Act 2003 applies to cause a statement of compatibility to be prepared in respect of that legislative instrument.
The Determination is a legislative instrument that is subject to disallowance under section 42 of the Legislative Instruments Act 2003.
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] 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).
[2] Australian Bureau of Statistics, Australian Demographic Statistics, March 2012, catalogue 3101.0, released 27 September 2012.
[3] Budget Paper No 3, Australia’s Federal Relations 2012-13; 8 May 2012, page 141.