1. SPECTRUM ALLOCATION: 3G MOBILE, DIGITAL TV & WIRELESS 19 March 2001 Tony Shaw Chairman Australian Communications Authority

2. Spectrum Allocation l Spectrum is a scarce resource l Need to allocate between competing interests à commercial  carriers, SMEs à community  ambulance, fire fighting etc à national  Defence, police etc

3. Government Policy Objectives l efficient and open communications market l self-regulation l lower regulatory costs

4. The Regulatory Framework

5. International Obligations l Radio Regulations constitute an international treaty l ACA contributes to ITU fora to ensure decisions are in Australia’s best interests l domestic laws and practices align with ITU decisions

6. National Regulation l Legislation à Radiocommunications Act 1992 à Telecommunications Act 1997 à Australian Communications Authority Act 1997

7. Australian Radiofrequency Spectrum Plan l Australian Radiofrequency spectrum Plan: à allocates bands of spectrum to broad types of service à aligned as closely as possible to international spectrum arrangements where they exist à revised following each ITU WRC

8. Bandplanning Planning necessary to ensure: l efficient use l capacity to meet a wide variety of user needs, particularly for emerging services and technologies l consistency with international spectrum allocation principles

9. Licensing l Apparatus Licences á approx 200,000 on issue á technology specific á issued for max. of 5 years á necessarily prescriptive á issued ‘over the counter’ á occasionally auctioned l Class Licences á ‘public park’ spectrum l Spectrum Licences á spectrum access right á technology-neutral á fully tradeable á issued for up to 15 years á usually auctioned

10. Spectrum Licensing l Decisions about allocation left to the market as much as possible. l Licensees have freedom to shift their services and technologies in response to market changes l ACA committed to self-management in radiocommunications.

11. Licence Terms l Under Radiocommunications Act 1992 maximum licence periods are à 5 years for an apparatus licence à 15 years for a spectrum licence l No guarantee of renewal

12. Changing spectrum use l Balancing demands à incumbents’ need certainty à compensation? à aspirations of new players –quick band clearance à expectations of community to new services

13. Accommodating change l Flexibility to introduce new services à band planning à re-allocating encumbered spectrum à allocating spectrum licences à converting existing licensees l Tradable licences

14. Allocating to Users l Issue over the counter à licence fees ration access l Issue between competing players à Price based allocation l Issue to community uses à ambulance, fire fighting etc

15. Issue over the counter l If prices set appropriately, efficiency of spectrum use will be enhanced à use minimum bandwidth; à use most appropriate band; and à use most efficient technology. l provide a monetary return to the community

16. Excess Demand l ‘Beauty Parade’ à open to legal challenge à time consuming l Auctions à quick, transparent, fair and efficient

17. Auctions l ACA has auctioned more spectrum than any other country except the USA à using both open out cry and simultaneous multiround l 3G underway

18. Competition considerations l ACCC has primary responsibility for TPA. l Beyond that the Minister can reserve spectrum for new players and set bidding caps in auctions. l ACA consults with ACCC and implements Minister’s directions

19. Summary efficiency is best served when resources are allocated to those placing the highest value on them competition will ensure better outcomes for consumers than heavy government regulation businesses are better placed to make commercial decisions in a fast changing environment than governments.

20. ACA’s Challenge to create and maintain a framework which supports competition and self-regulation  If the regulator can get the underlying principles right then the market will take care of itself

21. Thank you l www.aca.gov.au