Australian government to overhaul spectrum laws

The federal government has announced that it will begin reforming the legislation, licensing, and pricing of spectrum in Australia, with plans to have the new legislation passed by mid next year.

The government said it will acquiesce to the recommendations outlined in the Spectrum Review Report [PDF], which was published by the Department of Communications and the Australian Communications and Media Authority (ACMA) in May this year.

In that report, the department and the ACMA had called for a move away from the outdated 23-year-old governing legislation, the Radio Communications Act, to a modern system enabling more market-based activity to allow telcos to share and trade spectrum being used for mobile services.

The department reported that during the next 15 years, the economic value of spectrum could contribute up to AU$177 billion to Australia's economy.

"Spectrum is a critical input to a networked and digital economy and society," the agency said in its May report. "It supports a wide range of services that promote economic growth and enhance social well-being. Its role as an economic driver, and the value it returns to society, is increasing."

A move away from government control of spectrum would provide greater transparency of the process, with allocation to become less complex and more time efficient, according to the government. New legislation will be introduced to "streamline" the process of licensing spectrum, with the three licence types to be replaced with a single system.

The core parameters that are expected to be covered by the new regulations include the spectrum's frequency, geographic location, duration, whether a licence can be renewed, conditions where the ACMA would not renew a licence, terms for changing and revoking licences, payment mechanisms, and amounts to be charged.

The government also said it will improve the consistency of broadcasting and public sector spectrum by integrating the two, ensuring that spectrum holders are able to sell, lease, and share spectrum. It will additionally review pricing and taxation.

The government has now confirmed that it will be implementing all of these suggestions, saying that the Minister for Communications will have direction and oversight in forming policy while consulting with the ACMA. Day-to-day management responsibility of the new regulations would fall to the ACMA, with the industry body to make annual reports on the process.

"Implementation of the Spectrum Review recommendations will be staged over a number of years, reflecting the scope and impacts of reform for spectrum users and the Commonwealth," the Department of Communications said on Tuesday.

"Introducing the new spectrum framework will involve ongoing, close consultation to maintain certainty and support stakeholders during the transition."

The time frames set out will see the government consult on draft legislation in October this year, consult on the Exposure Draft in December, and introduce the Bill in the second quarter of 2016. During mid- to late 2016, the government plans to consult on draft licensing instruments, and in mid-2017 to begin progressively implementing the new licensing system.

In mid-2015, the government will conduct a review on spectrum pricing in Australia, with the resultant report expected to be tabled by mid next year and subsequent updated pricing arrangements to commence in mid-2017.

The government will also begin a review of Commonwealth spectrum usage policy, which will report back in mid-2016.

The implementation of new allocation processes, regulation, compliance, and enforcement surrounding the spectrum licensing and legislation will also commence in mid-2017, after consultation in early 2017.

The ACMA on Tuesday welcomed the spectrum review, saying the government's adoption of all 11 recommendations would ensure that the ACMA will be able to respond in a timely manner to any future technological advances, along with extending options for compliance.

"This is a win for industry and consumers," said deputy ACMA chairman Richard Bean.

"It provides a more responsive regulatory regime -- rather than black-letter law -- that will take away unnecessary barriers, reducing delays and costs of getting new technologies to the market."

The Australian Mobile Telecommunications Association (AMTA) also lauded the decision, saying the extensive overhaul would meet the needs of the communications industry.

"This important initiative has the potential to deliver more flexibility and certainty for spectrum licence holders at a time when spectrum resources are under increasing pressure from rapidly expanding mobile markets that continue to grow strongly and impact most facets of our economy and society," AMTA CEO Chris Althaus said.

"AMTA members look forward to engaging with the proposed consultation processes to develop the new framework to ensure it achieves more efficient and simpler allocation processes, more transparent and consistent pricing to support efficient use, and a clear and simplified framework of policy accountability."

In May, the government also announced plans to auction off unused 1800MHz spectrum in order to improve 4G services in regional areas of Australia, with the auction to be run by the ACMA.

Telecommunications carriers have been limited to bidding for 2x25MHz of spectrum in the auction, despite the objections of Telstra, which rival telcos Vodafone Australia and Optus previously claimed has a monopoly on the spectrum band in remote areas.

"It is difficult to understand the rationale for setting competition limits that could allow Telstra to corner 2x40MHz of spectrum in this band since the limit ignores their existing holdings. No other prospective auction participant can come close to this outcome, meaning that one player is effectively insulated from competition," Vodafone's general manager of policy Matthew Lobb added in a statement in late May.

"Already consumers in some parts of regional Australia suffer from a lack of choice and unfair market conditions. By reducing incentives for investment and competition in regional areas, consumers will miss out on the value that big city mobile customers take for granted."

Lobb on Tuesday welcomed the government's spectrum reform, however, saying the changes would add value to the economy.

"We congratulate the government's commitment to vital and welcome microeconomic reform," he said in a statement. "The changes to the framework will greatly improve the management of spectrum in this country, and pave the way for substantial improvements in national productivity."

The new spectrum regulations are expected to come into effect by mid-2017.

Updated at 3.54pm AEST, August 25: Added comment from AMTA.

Updated at 5.17pm AEST,August 25: Added comment from Vodafone Australia.