Spectrum licences in the 1800 MHz band1800 MHz—a shared strategyIssues paper 2MARCH 2013

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1 Introduction 21.1 Legislative and regulatory framework 2

2 The 1800 MHz band 4

3 Licensing arrangements in Australia 73.1 Why licence spectrum? 73.2 Available licensing arrangements 73.3 A framework for assessing licence type suitability 83.3.1 Optimal conditions for apparatus licensing 83.3.2 Optimal conditions for spectrum licensing 83.3.3 Optimal conditions for class licensing 93.4 Which licensing arrangement is the most suitable? 103.4.1 Mobile voice and data services 103.4.2 Rail communications systems 103.4.3 Mining operations 113.4.4 Smart energy grids and smart transport solutions 11

4 Possible extension to spectrum licensing in the 1800 MHz band 12

4.1 Options for future licensing arrangements 124.1.1 Option a—Retain current arrangements 124.1.2 Option b—Spectrum licence the whole band 134.1.3 Option c—Release spectrum licences in areas most needed 134.2 Methods of transition to spectrum licensing 154.2.1 Approach 1: Designating spectrum for spectrum licensing 154.2.2 Approach 2: Declaring spectrum for reallocation by spectrum

licensing 154.2.3 Relevant considerations 15

5 Invitation to comment 185.1 1800 MHz—a shared strategy 185.2 Collaborate online 185.3 Meet with us 185.4 Make a submission 195.4.1 Effective consultation 195.4.2 Publication of submissions 195.4.3 Release of submissions where authorised or required by law 195.4.4 Status of this paper 20

6 Attachment A: Processes to transition to spectrum licensing 21

6.1 Designating spectrum for spectrum licensing 216.2 Declaring spectrum for reallocation by spectrum licensing 22

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Executive summary

This paper explores the possibility of increasing the amount of spectrum space in the 1710–1785 MHz and 1805–1880 MHz frequency ranges (the 1800 MHz band) that is covered by spectrum licensing. It is the second in a series of three issues papers (see Table 1 on page 18) relating to planning for the1800 MHz band, in the short- and long-term.

The Australian Communications and Media Authority (the ACMA) released issues paper 1, on regional and remote apparatus licences in the 1800 MHz band, in December 2012. It proposed the use of public telecommunications service (PTS) apparatus licences in regional and remote Australia as a solution to growing demand for 1800 MHz spectrum in the short-term. In contrast, this paper focuses on a long-term solution. It asks whether, given the nature of proposed operations in the 1800 MHz band, prospective licensees consider that spectrum licensing is the optimal licensing arrangement for their operations.

The ACMA is seeking the views of stakeholders, particularly prospective licensees, on the current and possible future licensing arrangements in the 1800 MHz band. To aid stakeholders in this assessment, Chapter 3 discusses the different licensing arrangements available in Australia. It also provides a framework for assessing which licence type might be most appropriate, given factors such as geography, technology, business model and level of interference protection required.

In Chapter 4, the ACMA discusses three options to extend the spectrum licensing arrangements in the 1800 MHz band in regional and/or remote areas. After considering the options available, a bespoke approach is recommended. This approach would extend spectrum licensing only for services that are highly suited to that licence type and only in areas where licensees are more likely to want it.

If, as a result of this consultation, the ACMA decides to pursue an extension to spectrum licensing in the 1800 MHz band, it will develop a specific proposal for comment by stakeholders. A formal consultation would be undertaken on that proposal before the ACMA made a recommendation to the Minister for Broadband, Communications and the Digital Economy to extend spectrum licensing.

A transition to spectrum licensing arrangements in the 1800 MHz band in regional and/or remote areas requires the relevant segments of the band to be either designated or declared for spectrum licensing by the minister. If the minister decided that spectrum licensing is appropriate, the ACMA would follow the legislative steps set out in the Radiocommunications Act 1992 (the Radiocommunications Act) to transition from apparatus licensing to spectrum licensing.

In developing a view on which approach to support, stakeholders are encouraged to consider which licence type will best meet their needs in deploying new services in the band. Stakeholders are also encouraged to consider which transition option would be best for making a transition from apparatus to spectrum licensing, should the minister decide to extend spectrum licensing in the band.

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1 IntroductionThere is a growing demand for access to spectrum in the 1800 MHz band from a variety of stakeholders. Much of this demand is a result of the increasing availability of long term evolution (LTE) equipment for the band. This has led to significant interest from a number of sectors seeking to deploy 4G communications networks and smart infrastructure systems across Australia.

To accommodate this demand, and to ensure that the band is efficiently allocated to its highest value use, the ACMA is investigating changes to the licensing and regulatory arrangements for the 1800 MHz band in regional and remote areas of Australia.

This review coincides with the approaching expiry of spectrum licences in the 1800 MHz band. This timing provides an opportunity for the ACMA to ensure that arrangements in the band are aligned and consistent across the 15-year tenure period of new spectrum licences. The ACMA’s expiring spectrum licence process for the 1800 MHz band is outside the scope of this review.1

The purpose of this paper is to inform prospective licensees about the licensing options available in this band. Informed stakeholders are likely to have a view about which licensing model would best suit their planned infrastructure deployments and service delivery in the 1800 MHz band in regional and remote Australia. The ACMA is eager to understand those views before deciding whether to recommend changes to the existing arrangements. In particular, if there is strong support from prospective licensees for an extension to spectrum licensing arrangements in the band, the ACMA will consider making a recommendation to the minister to that effect.

The options in this paper leave open the possibility of enhanced spectrum-sharing arrangements in the band, including the possible introduction of an infrastructure park. These possible arrangements will be the subject of Issues paper 3, planned for release in April 2013.

1.1 Legislative and regulatory frameworkThe ACMA is guided in its spectrum management functions by the objects in section 3 of the Radiocommunications Act and the Principles for spectrum management (the principles). The key theme of both the objects and the principles is to maximise the overall public benefit derived from use of the radiofrequency spectrum. The ACMA achieves this goal through a balanced application of market and regulatory mechanisms.

The ACMA’s proposals, set out in this paper are informed by, and are consistent with, the following objects of the Radiocommunications Act:a. Maximise, by ensuring the efficient allocation and use of the spectrum, the overall

public benefit derived from using the radiofrequency spectrum.b. Provide a responsive and flexible approach to meeting the needs of users of the

spectrum.c. Provide an efficient, equitable and transparent system of charging for use of the

spectrum, taking account of the value of both commercial and non-commercial use of spectrum.

d. Support the communications policy objectives of the Commonwealth Government.

1 Further information on the ACMA’s expiring spectrum licence process is available at www.acma.gov.au/WEB/STANDARD/pc=PC_410295.

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The ACMA’s proposals also meet the principles:> Principle 1—Allocate spectrum to the highest value use or uses.> Principle 2—Enable and encourage spectrum to move to its highest value use or

uses.> Principle 3—Use the least cost and least restrictive approach to achieving policy

objectives.> Principle 4—To the extent possible, promote both certainty and flexibility.> Principle 5—Balance the cost of interference and the benefits of greater spectrum

utilisation.

The key issue discussed in this paper is: whether an extension of spectrum licensing in the 1800 MHz band in regional and

remote Australia is a desirable option for incumbent and prospective licensees.

This review is principally intended to support Principles 2 and 4. The right approach to licensing in a given setting will enable and encourage spectrum to move to its highest value use and provide the right balance of certainty and flexibility for licensees.

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2 The 1800 MHz bandThis chapter provides information about the 1800 MHz band as context for the issues raised in later chapters. This information includes the types of licensing arrangements currently in use, the types of services deployed and the growing demand for new service deployments.

The 1800 MHz band is subject to different licensing arrangements across Australia and across the band. Figure 1 shows the geographic allocation of licence types.

In major metropolitan areas, the entire 2x75 MHz of bandwidth in the 1800 MHz band is spectrum licensed, and used predominantly for the provision of public mobile telephone services. In regional areas, 2x60 MHz of the band is subject to apparatus licensing, while the frequency ranges 1710–1725 and 1805–1820 MHz (2x15 MHz) are spectrum licensed. In remote areas, the entire 2x75 MHz of the band is subject to apparatus licensing. Existing spectrum licences in the 1800 MHz band will expire in two tranches—on 17 June 2013 and 3 May 2015.

Figure 1 Areas subject to spectrum and apparatus licence in the 1800 MHz band

Band (MHz) Metropolitan Regional Remote1710–1725/1805–1820 Spectrum Spectrum Apparatus1725–1785/1820–1880 Spectrum Apparatus Apparatus

In regional and remote areas, the 1800 MHz band is predominantly used for fixed point-to-point links. These services have been coordinated in accordance with RALI FX3, Microwave fixed services frequency coordination. There are approximately 700 fixed point-to-point licences in the 1800 MHz band, with approximately 85 per cent of these held by Telstra, four per cent by BHP and 2.5 per cent by QR Networks.

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Figure 2 shows the existing fixed-link services in the 1800 MHz band within the different licensing areas that may be affected by any change to licensing arrangements. Spectrum licensed areas are shaded, with the regional spectrum licensed areas shaded in red and the metropolitan spectrum licensed areas shaded in black. Spectrum licensed areas are outside the scope of this review.

Figure 2 Point-to-point links in the 1800 MHz band

There is increasing demand for access to spectrum by prospective operators of mobile services in regional areas. Stakeholders are seeking to deploy mobile voice and data communication services using emerging LTE technologies, including 4G mobile telephony. The ACMA anticipates demand for access to spectrum in remote areas, predominantly in locations that are associated with industries such as mining and transport. These types of services are generally cellular and deployed across large geographic areas. This is significantly different to the operation of fixed point-to-point links that are site-based and directional.

The ACMA expects strong demand for use of the 1800 MHz band in regional and remote Australia. Along with the demand demonstrated by telecommunications providers, the availability of LTE and GSM-R equipment also offers opportunities for other industries that traditionally have not relied heavily on these technologies to deliver services. Therefore, the kinds of services that are expected to be deployed include:> mobile phone and broadband services> smart networks, such as smart energy grids> automated systems, including transport and other infrastructure.

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Issues paper 1 discussed these competing demands in more detail and set out options for assigning different portions of the band to different service types and prospective licensees. The outcomes of the matters discussed in that issues paper are yet to be announced.

The existing licensing arrangements in the 1800 MHz band could meet the needs of prospective licensees both in the short- and longer term. However, different licence types have different characteristics in terms of authorising spectrum use, charging and licence tenure. They are managed differently by the ACMA and bestow different benefits and responsibilities on licensees. For these reasons, as part of its holistic review of the 1800 MHz band, the ACMA is seeking the views of prospective licensees as to the most appropriate licence type for their anticipated service deployments in the band.

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3 Licensing arrangements in Australia

This chapter explores the different licence types available under the Radiocommunications Act, and provides a framework for assessing when to use each type. An application of the framework to the anticipated services to be deployed in the 1800 MHz band follows.

3.1 Why licence spectrum?The ACMA plans and manages the radiofrequency spectrum in Australia in accordance with the Radiocommunications Act. The Act requires the ACMA to maximise the efficient allocation and use of spectrum as well as the overall public benefit derived from using the radiofrequency spectrum. When selecting the type of licensing arrangements for a particular area of the radiofrequency spectrum, the ACMA seeks to further these objects.

Spectrum is an essential part of the national infrastructure. It is vital to Australia’s strong economic development that spectrum continues to be utilised as fully and as effectively as possible. Spectrum must be managed to facilitate the realisation of social and economic policy objectives, while avoiding unnecessary costs to industry and inhibition of competition.

The goal of licensing is to provide efficient access to a valuable national resource and to preserve the utility of the spectrum by minimising harmful interference.

3.2 Available licensing arrangements In general it is unlawful to operate a radiocommunications device in Australia unless it is authorised by a radiocommunications licence issued under the Radiocommunications Act. Each licence type carries conditions of use (such as payment of fees and charges, and compliance with standards) and technical conditions for operation (such as frequency, bandwidth and power). There are three types of radiocommunications licence, which are explained in detail on the ACMA website:> apparatus —use of individual devices, usually on a site-specific basis> spectrum —use of a specified frequency band in a defined geographical area> class —broad spectrum access arrangements which are open to all users.

The suitability of a licensing arrangement for any one part of the radiofrequency spectrum depends on a range of other factors, such as levels of demand for access to the spectrum, the types of services expected to be deployed and technical characteristics. Combinations of these licensing regimes can also be used to facilitate spectrum sharing.

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3.3 A framework for assessing licence type suitabilityThe ACMA’s experience is that all three licence types are effective and useful regulatory mechanisms. Each of the licence types has different parameters that mean it is more suited to some circumstances than others.

3.3.1 Optimal conditions for apparatus licensingApparatus licences authorise the use of particular devices in specified locations. Licences are issued for up to a maximum of five years and there is a presumption that they can be renewed after they expire. Apparatus licences are most appropriate for services and applications that generally satisfy the following conditions:> there are a large numbers of possible users (particularly in the same area)> different services with significantly different characteristics share a band> close coordination between users is needed> most users only want one site or a small access area> most users only want one or a few channels> users require some guarantee of protection from unacceptable levels of

interference in order to deliver a desired quality of service> a database of spectrum users is needed for planning, coordination and interference

investigations> users seek spectrum as a business enabler rather than a large part of their

operations, so they prefer the simplicity of a planned environment> the ACMA is well-placed to make a judgement about the highest value use, or the

mix of uses that represents the highest value> there is little or no excess demand> demand for access is expected to slowly build over time.

Under these conditions, apparatus licensing can achieve desirable outcomes. Importantly, it enables many diverse users to share spectrum in very technically efficient ways.

3.3.2 Optimal conditions for spectrum licensingSpectrum licences authorise access to a spectrum space defined by bandwidth, geography and/or time. They are issued for a maximum of 15 years with a presumption that they will not be renewed. Spectrum licensing is likely to be the most successful approach when:> individual users need large contiguous blocks of spectrum> individual users need large licence areas> all likely future high-value uses can be accommodated in a single technical

framework> potential future spectrum licensees have the resources and technical capability to

effectively manage their licensed spectrum.

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The successful use of spectrum licensing under the conditions described above has enabled strong technical efficiency and efficient deployment of area-wide and Australia-wide mobile telephony and broadband networks with limited government involvement. The technical flexibility and exclusivity of spectrum licences has allowed licensees to update technology when required and deploy large networks with certainty of protection from unacceptable levels of interference.

3.3.3 Optimal conditions for class licensingClass licences are standing authorisations to use portions of the spectrum on a shared basis for specified purposes. They are not issued to individual users. Class licences have traditionally been issued where:> devices cannot be registered due to their mobility or ubiquitous deployment> services deployed do not require high reliability or high quality of service> a large number of users can share the spectrum without a need for planning,

coordination and interference investigations> use of a class of devices can be collectively authorised without harmful interference

to other licensed services.

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3.4 Which licensing arrangement is the most suitable?Each of the anticipated services to be deployed in the 1800 MHz band features characteristics that make it more or less suitable for different licences types when analysed against the optimal ‘conditions’ outlined in sections 3.3.1 and 3.3.2 above.

The ACMA has developed a preliminary view as to the most appropriate licence type for some of the anticipated services. For other services, the ACMA seeks stakeholder input before coming to a view. Either apparatus or spectrum licences could facilitate the deployment of mobile telecommunications services throughout regional and remote Australia, while rail services appear to be more suited to apparatus licensing. The ACMA seeks more information about the service deployment plans of the mining and transport sectors before determining the most appropriate licence type for those services.

3.4.1 Mobile voice and data servicesTelecommunications carriers have successfully deployed mobile services under spectrum licences in Australia for almost 15 years. Mobile telecommunications services lend themselves well to spectrum licences because they require large contiguous blocks of spectrum over large licence areas in order to cover populated areas of the country. The deployment of networks by different carriers to agreed international standards for mobile telephony means that all the services to be deployed in a band can be accommodated in a single technical framework. Importantly, spectrum management is a core business function for mobile carriers. They have the resources and technical capability to effectively manage their licensed spectrum.

Mobile networks are also deployed successfully under apparatus licences. It is a matter for prospective licensees to consider whether they may prefer:> a 15-year licence granting exclusive access to a large spectrum space> one or many individual apparatus licences that can be issued for a maximum of five

years with a presumption of renewal. These could be issued on an area-wide basis or a first-in-time coordinated basis.

3.4.2 Rail communications systemsRail operators across Australia are developing enhanced communications systems to support or replace their legacy signalling and communications systems. Representatives of the rail industry have indicated that spectrum access is required for all Australia’s rail networks to support the national interoperability of rail communications systems.

The initial ACMA position is that apparatus licences would best meet the needs of rail service providers in regional and remote areas. While rail networks reach across the length and breadth of Australia, and the number of networks could well increase over the coming decades, the land mass they cover is relatively defined. An area-wide or nationwide licence to support rail communications systems could lead to significant spectrum denial and spectral inefficiencies as large geographic areas in the 1800 MHz band, typically in regional and remote areas, could remain unused. Furthermore, although wireless networks will become increasingly important to rail operations, spectrum management is not core business for these entities and they may prefer the spectrum management arrangements under apparatus licences.

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3.4.3 Mining operationsMining operators have expressed interest in using 1800 MHz spectrum to support safety and operational systems on mine sites. It is likely that such demand will increase in the future as these emerging technologies are deployed across more sites by more users. It is possible that geographic regions in which there are a large number of mines will become areas of high demand for 1800 MHz spectrum.

In the future, use of 1800 MHz spectrum by the mining industry could be characterised by several operators in a defined region sharing limited spectrum to deploy contemporary communications systems and automated equipment technologies. Careful interference management will be required, supported by flexible licensing arrangements.

The next and final issues paper of the 1800 MHz review will discuss the potential for greater spectrum sharing in the band. The geographic and technical characteristics of anticipated radiocommunications deployments in dense mining regions would seem to lend themselves to spectrum-sharing arrangements in the longer term. This will be discussed further in issues paper 3.

The ACMA seeks more information from the mining sector on their planned service deployments and preferred licensing arrangements to assist in the development of future licensing and regulatory arrangements.

3.4.4 Smart energy grids and smart transport solutionsThe 1800 MHz band is a candidate band for smart energy grids and smart transport solutions. These kinds of services could potentially cover the majority of populated areas across the country, and are likely to be deployed by a large number of retail energy suppliers or transport operators. The ACMA seeks information from these prospective licensees about their planned service deployments and preferred licensing arrangements.

Q1. What is the preferred licence type for prospective operators in the 1800 MHz band in regional and remote Australia?

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4 Possible extension to spectrum licensing in the 1800 MHz band

Based on the analysis in previous chapters, the ACMA has identified three options for stakeholders to consider for future licensing arrangements in the 1800 MHz band. This chapter explains the three options and also provides additional information on how the ACMA could transition to spectrum licensing, if that approach is an outcome of this consultation process.

4.1 Options for future licensing arrangementsAfter considering the emerging demand for access to 1800 MHz spectrum in regional and remote areas, and the types of services expected to be deployed, the ACMA has identified three licensing options for consideration:a. Current licensing arrangements in the band could be retained.b. The entire band could be spectrum licensed.c. Those portions of the band to be assigned to services that are optimal for spectrum

licensing could be transitioned and the remainder could continue to be apparatus licensed.

If any of these options is applied, the licensing arrangements are flexible enough for the 1800 MHz band to move to its highest value use. However, some arrangements have the additional benefit of encouraging greater spectrum utilisation and efficiencies than others. The ACMA is seeking stakeholder views on each of the options. If, as a result of this consultation, the ACMA decides to pursue an extension to spectrum licensing in the 1800 MHz band, it will develop a specific proposal for comment by stakeholders. Formal consultation would be undertaken on that proposal before the ACMA made a recommendation to the minister to extend spectrum licensing in the band. 4.1.1 Option a—Retain current arrangementsThe current availability of spectrum licences in major metropolitan areas, and for certain frequencies in regional areas, may be adequate for incumbent and prospective licensees. There is no reason why the anticipated demand for spectrum in the remainder of the band could not be met through apparatus licences.

As outlined in issues paper 1, the ACMA proposes to release spectrum in the 1800 MHz band for licensing under PTS apparatus licences, to facilitate the deployment of nationwide networks. These are interim changes, but if they prove to be effective they could remain in place. The ACMA could consider relaxing assignment priorities in the future to allow general, first-in-time registrations to be made in areas where spectrum is available.

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4.1.2 Option b—Spectrum licence the whole bandGiven the anticipated demand for spectrum in the 1800 MHz band, the option to introduce spectrum licence across the band in regional and remote Australia could have some merit. The optimal conditions for spectrum licensing include large contiguous blocks of spectrum and large licence areas. With nationwide infrastructure networks most likely to be deployed in the band, allocating spectrum licences could enable spectrum to be used in its highest value. Spectrum licences could also be allocated in lots that cover regions likely to experience high demand, such as mining areas.

However, there is a pragmatic limit to how carefully the ACMA can craft spectrum lots for allocation, especially given that the character of the demand may change over the 15-year tenure of the licences. Carving up the country into spectrum lots could, in effect, require energy or rail providers to pay for more spectrum than they actually need and could also lead to spectrum in some areas being unused. Issuing spectrum licences may also limit the ability of new operators to gain access to spectrum in the same or nearby areas—for example, areas where multiple mines, owned by different entities, operate in close proximity.

4.1.3 Option c—Release spectrum licences in areas most neededAnother option is to implement spectrum licensing arrangements in those geographic areas and frequencies that are likely to be used by services suitable for this arrangement, and to leave the remainder of the band subject to apparatus licensing.

One approach to this could be to transition to spectrum licensing those portions of the band to be assigned to mobile carriers in the priority assignment plan outlined in issues paper 1. This approach would mean that up to 2x30 MHz or 2x45 MHz of spectrum could be spectrum licensed in regional areas and 2x45 MHz or 2x60 MHz in remote areas. The remainder of the band—2x15 MHz to 2x30 MHz in regional and remote Australia—would remain apparatus licensed for those anticipated services that are more suited to this type of arrangement.

Although this option uses an assignment priority model discussed in issues paper 1, a decision has not yet been made on which assignment priority model will apply to the band. The ACMA is considering the comments made by respondents to that paper and will announce its decisions in the coming weeks. It is also possible for different approaches to be adopted for regional and remote areas. For example, apparatus licensing arrangements may be more appropriate in remote Australia, where demand for access to this band to support mining infrastructure and operations is increasing. In some remote areas, it appears that ‘hotspots’ of spectrum demand are emerging as several infrastructure entities—mining, rail and telecommunications—are planning networks that will operate in close geographic proximity. These types of deployments may be better facilitated through coordinated apparatus licences at this time rather than under the exclusive access arrangements provided by spectrum licensing arrangements. A greater number and variety of services may be able to be deployed in the area using coordinated apparatus licences compared with a possibly limited number if spectrum licences are used. Once take-up of the band by infrastructure services occurs, the ACMA may review the operations in the band in the context of any proposed spectrum-sharing arrangements or other licensing frameworks.

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Figure 3 is a simplified illustration of the options discussed in issues paper 1. The purple shaded areas indicate spectrum that could be transitioned to spectrum licensing under Option c.

Figure 3 Simplified assignment priority options from issues paper 1, overlaid with possible spectrum licensing extension

FrequencyChannel (2x5 MHz)

Assignment priority remote

option 1

Assignment priority remote

option 2

Assignment priority regionaloptions 1 & 3

Assignment priority regionaloptions 2 & 4

1710/1805 MHz

1785/1880 MHz

1

Mobile carriers (2x45 MHz)

Mobile carriers (2x60 MHz)

Spectrum licensed (carriers)

(2x15 MHz)

Spectrum licensed (carriers)

(2x15 MHz)234

Mobile carriers (2x30 MHz) Mobile carriers

(2x40 MHz or 2x45 MHz)

56789

10

Infrastructure/ rail

(2x30 MHz)

Infrastructure/rail (2x30 MHz)

111213

Infrastructure/rail (2x15 MHz)

Infrastructure/rail (2x15 MHz or

2x20 MHz)1415

*Licensees in this segment of the band will be subject to a 2x10 MHz spectrum access limit.

Option c would therefore extend spectrum licensing in the spectrum assigned to mobile carriers in regional Australia, while the remainder of the band would continue to be subject to apparatus licensing. The ACMA considers that Option c may be the most appropriate approach because it adopts the optimal licence type for each anticipated use of the band. It would be a flexible use of the legislative framework to meet identified needs. Option c would provide the certainty of spectrum licensing for the telecommunications sector, which has successfully operated under this licence type in a number of bands across Australia and holds the majority of spectrum licences in the 1800 MHz band in metropolitan areas. Option c would retain flexibility in regional areas to facilitate diverse service deployments by a large number of new entrants to the band.

In deciding whether to pursue an extension to spectrum licensing in the 1800 MHz band, the ACMA will be guided by the views of prospective licensees and seeks feedback on the issues discussed in this paper.

Q2. Should the ACMA recommend an extension to spectrum licensing to some or all of the band?

Q3. Should an extension of spectrum licensing be limited to particular service types outlined in section 3.4 that are anticipated to be deployed in the band?

Q4. Would apparatus or spectrum licensing provide greater benefits to prospective licensees in deploying services?

Q5. Should different licensing arrangements be implemented in regional and remote areas?

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4.2 Methods of transition to spectrum licensingA possible outcome of this consultation is that the ACMA adopts one of the options outlined above and recommends that some or all of the currently apparatus-licensed portions of the 1800 MHz band should be spectrum licensed instead. In that case, two legislative mechanisms are available in the Radiocommunications Act to give effect to the transition. The minister may decide to transition to spectrum licensing from apparatus licensing by either designating or declaring the spectrum to be allocated via the issue of spectrum licences.

Detailed information about the legislated processes for designating and declaring the spectrum for spectrum licensing is in Attachment A: Processes to transition to spectrum licensing.

4.2.1 Approach 1: Designating spectrum for spectrum licensingAfter receiving a recommendation from the ACMA or consulting with it, the minister could provide a written notice designating specified parts of the 1800 MHz band to be allocated by issuing spectrum licences. If this occurred, the ACMA would offer incumbent apparatus licensees a spectrum licence to replace the existing apparatus licences in the band. This process is referred to as ‘conversion’. The conversion process is described in Part 2.2 of the Radiocommunications Act.

The ACMA would offer new spectrum licences to all apparatus licensees, giving them an opportunity to convert their licences to spectrum licences. So far as is practicable, the new licences must authorise the operation of radiocommunications devices to the same extent as, or to a greater extent than, the apparatus licences they replace.

4.2.2 Approach 2: Declaring spectrum for reallocation by spectrum licensingAfter receiving a recommendation from the ACMA, the minister may choose to make a spectrum reallocation declaration specifying parts of the 1800 MHz band for spectrum licensing. If the minister makes a spectrum reallocation declaration, existing apparatus licences will be cancelled at the end of the reallocation period specified in the recommendation to make way for spectrum licences. New spectrum licences would be offered to the market through a price-based allocation, such as an auction. The reallocation process is described in Part 3.6 of the Radiocommunications Act.

A reallocation period must run for at least two years. No new apparatus licences could be issued in the affected spectrum during the reallocation period, except in special circumstances. During that period, and before the reallocation deadline, the ACMA would conduct an auction to offer the relevant spectrum to the market in defined lots of spectrum space. The ACMA would then issue a licence to the successful bidder for each lot.

4.2.3 Relevant considerationsThe ACMA seeks the views of prospective licensees on which method of transition would best meet their needs. There are several factors that may affect the relative merits of the two options.

If the minister decided to designate spectrum in the 1800 MHz band for spectrum licensing, then all existing apparatus licences operating in the specified spectrum could be replaced by spectrum licences. This would have the following implications:

Existing fixed point-to-point licensees would be offered spectrum licences to replace their apparatus licences.

Offering spectrum licences to the holders of fixed point-to-point licences could be unworkable, as these services often share spectrum space with other licensees. If

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a conversion approach were pursued, the ACMA would need to work with existing licensees to avoid this conflict. One approach could be to move fixed services to spectrum space that is spectrum licensed to the same licensee. Another could be to move fixed links to a portion of the band that is not converted to spectrum licensing. However, this approach could have implications for the amount of available spectrum in the apparatus licensed segment of the band. That is, by increasing the number of fixed services in that segment of spectrum, the likelihood of congestion also increases.

Issues paper 1 considered the status of the existing fixed point-to-point links in the 1800 MHz band. Several options were canvassed for the future operation or removal of these links from the band. The outcomes of that discussion will be a relevant factor for the ACMA in its consideration of a possible transition to spectrum licensing in the future.

> PMTS-C apparatus licences that were previously issued to support mobile telephony on aeroplanes on an Australia-wide basis would be subject to conversion.

It would be undesirable to convert an Australia-wide PMTS Class C apparatus licence to a spectrum licence. PMTS-C licences cover segments of the 1800 MHz band that are not already spectrum licensed. Technical criteria were developed in consultation with industry to enable use of the band under PMTS-C licences alongside other services. If the transition to spectrum licensing occurs, the ACMA may consider whether it is possible for the technical criteria to be reviewed and possibly amended to allow for continuity of service by these devices. That is, the PMTS-C service may continue operating in the spectrum space in the 1800 MHz band that is not subject to spectrum licensing.

> PTS apparatus licences issued in accordance with the ACMA’s proposed priority assignment arrangements would be offered spectrum licences to replace the apparatus licences.

The key proposal of Issue paper 1 was that the apparatus-licensed portions of the 1800 MHz band should be licensed to prospective users in the short term while longer term planning arrangements for the band were considered and developed. Early access and priority assignment arrangements are an important and timely step to address growing demand to deploy services in the band. However, the potential implication of this is that the priority assignment arrangements would subsequently determine the frequency and bandwidth to be converted to a spectrum licence/s offered to the existing licensee operating in the specified segment of spectrum. In this case, conversion may not give full effect to the market-based benefits associated with the spectrum licensing model.

If the minister decided to declare spectrum in the 1800 MHz band for reallocation by spectrum licensing, then all existing apparatus licensed services would need to clear the band by the end of the specified reallocation period. This would have the following implications:> The timing of the reallocation period may affect the use of the band in the

short term.

A key objective of the ACMA proposal in issues paper 1—to issue PTS apparatus licences in the 1800 MHz band in the short term—was to provide early access to the band and ensure its use during any transition period to longer term arrangements. If a reallocation period began very soon after the release of PTS licences, take-up of the licences may be limited. The benefits associated with providing short-term access to the band may not then be fully realised.

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> The timing of the reallocation recommendation to the minister.

The Radiocommunications Act requires that a reallocation period of at least two years be provided to assist existing apparatus licensees in clearing the band. Given the implication outlined above, the ACMA may consider making the proposed recommendation to the minister to reallocate the spectrum at a later date, after the early access arrangements have been implemented and the use and demand for access to the band becomes more apparent. This recommendation would be subject to further consultation with affected apparatus licensees and interested stakeholders.

If the outcome of this consultation process is that spectrum licensing should be extended in the 1800 MHz band, the ACMA would consult on the details of any proposed recommendation to the minister before it is made.

Given the current arrangements and usage of the 1800 MHz band, reallocation may be the most transparent and equitable means to ensure access to spectrum in the longer term.

Q6. Which transition approach would best meet the needs of licensees?

Q7. Which transition approach would best promote efficient use of the 1800 MHz band?

Q8. Given the complexities associated with a transition from apparatus to spectrum licences, do stakeholders consider that an extension to spectrum licensing should be pursued in the 1800 MHz band?

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5 Invitation to comment5.1 1800 MHz—a shared strategyThe ACMA is conducting a holistic review of the licensing and regulatory arrangements for the 1800 MHz band in collaboration with our stakeholders. Table 1 provides an outline of the consultation process, with this issues paper highlighted.

Table 1 Consultation process for 1800 MHz—a shared strategy

Consultation Issues covered Timing1800 MHz—a shared strategy consultation paper

Introduction to the short- and long-term issues relevant to regulatory and licensing arrangements in the band and the ACMA’s consultation strategy.

October 2012–June 2013

Workshop Discussion between the ACMA and stakeholders on the key issues for the band.

15 November 2012

Issues paper 1: Regional and remote apparatus licences in the 1800 MHz band

Covered issues relating to the release of the band for proposed access to 1800 MHz apparatus licences in regional and remote areas of Australia in the short term. Included a discussion on the status of fixed links in the band, and a review of pricing arrangements for apparatus licences.

December 2012–February 2013

Issues paper 2:Spectrum licensing in the 1800 MHz band

This issues paper seeks stakeholder views on the possible extension of spectrum licensing in the band.

February 2013–12 April 2013

Issues paper 3: Spectrum-sharing arrangements in the 1800 MHz band

This paper will invite discussion on the concept of spectrum sharing and the use of a ‘private park’ arrangement in the 1800 MHz band.

April 2013–June 2013

5.2 Collaborate onlineThroughout this consultation, the ACMA will make information available through the 1800 MHz engagement and consultation website at http://engage.acma.gov.au/1800mhz. Participants in this discussion are encouraged to contribute their views as comments or posts on our website or on our acmadotgov Facebook and Twitter channels. Throughout the consultation period, participants may contribute to the conversation using the hash tag #1800MHz.

The ACMA is interested in hearing what you think about other stakeholders’ views, with our final approach to be shaped by a genuine, multilateral dialogue on matters of interest.

5.3 Meet with usProspective licensees may prefer to meet the ACMA staff responsible for the 1800 MHz review and put their views directly. You can make an appointment by emailing spectrum.outlook@acma.gov.au.

5.4 Make a submission The ACMA encourages participants in the consultation to make submissions on the issues raised. We welcome shorter, ad hoc submissions on particular issues, or a full, formal submission on all the matters covered by one of our issues papers.

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Submissions can be made at any time before the closing date for the final issues paper:By email: spectrum.outlook@acma.gov.auBy facsimile: +61 2 6219 5353By mail: Manager

Spectrum Outlook and Review SectionAustralian Communications and Media AuthorityPO Box 78Belconnen ACT 2616

The closing date for submissions to this issues paper is 17 May 2013.

Media enquiries should be directed to Emma Rossi on (02) 9334 7719 or by email to media@acma.gov.au.

5.4.1 Effective consultation Stakeholder consultation processes are an important source of evidence for ACMA regulatory development activities. To assist stakeholders in formulating submissions to its formal, written consultation processes, the ACMA has developed Effective consultation: A guide to making a submission. This guide provides information about the ACMA’s formal, written, public consultation processes and practical guidance on how to make a submission. 5.4.2 Publication of submissionsIn general, the ACMA publishes all submissions it receives. However, the ACMA will not publish submissions that it considers contain defamatory or irrelevant material.

The ACMA prefers to receive submissions which are not claimed to be confidential. However, the ACMA accepts that a submitter may sometimes wish to provide information in confidence. In these circumstances, submitters are asked to identify the material over which confidentiality is claimed and provide a written explanation for confidentiality claims.

The ACMA will not automatically accept all claims of confidentiality. The ACMA will consider each claim for confidentiality on a case-by-case basis.

5.4.3 Release of submissions where authorised or required by lawAny submissions provided to the ACMA may be released under the Freedom of Information Act 1982 (unless an exemption applies) or shared with other Commonwealth Government agencies or other parties under Part 7A of the Australian Communications and Media Authority Act 2005. The ACMA may also be required to release submissions for other reasons including for the purpose of parliamentary processes or where otherwise required by law (for example, under a court subpoena). While the ACMA seeks to consult submitters of confidential information before that information is provided to another party, the ACMA cannot guarantee that confidential information will not be released through these or other legal means.

5.4.4 Status of this paperThis paper provides background information to assist people in making comments to the ACMA on the issues addressed in the paper. Information in this paper should not be taken to indicate the ACMA’s commitment to a particular policy or course of action.

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6 Attachment A: Processes to transition to spectrum licensing

6.1 Designating spectrum for spectrum licensingUnder section 36 of the Radiocommunications Act, the minister may, after consultation with the ACMA, designate a specified part of the spectrum to be allocated by issuing spectrum licences. The ACMA may, at the minister’s request or on its own initiative, make recommendations to the minister about designation notices.

Following the receipt of a designation notice, the ACMA would begin the process to convert existing apparatus licences in the designated spectrum into spectrum licences. Once a designation notice is in force, no new apparatus licences can be issued in the specified part of the spectrum other than in the circumstances specified in subsection 105 (2) of the Radiocommunications Act.

The general process for converting licences into spectrum licences is set out in sections 52–59 of the Radiocommunications Act. Section 38 of the Act requires the ACMA to develop a conversion plan, which provides the details of the conversion process.

A summary of the conversion process, is as follows:> After a conversion plan has been prepared, the ACMA would prepare a draft

spectrum licence to replace each existing apparatus licence in the 1800 MHz band (section 53). The new spectrum licence must provide authorise the operation of radiocommunications devices to the same or a greater extent than the apparatus licence it replaces. The draft licences would contain core conditions and conditions relating to other aspects of spectrum use (sections 66–71).

> Any technical planning necessary would be undertaken in consultation with stakeholders.

> The ACMA would send a copy of a draft spectrum licence to an incumbent licensee (section 54), and invite the licensee to make representations about the draft licence. The licensees would have at least one month to comment on the draft spectrum licence (subsection 54 (2)).

> The ACMA must consider any representations made by a licensee about a draft licence and may change the draft licence after such consideration (section 55). While considering the comments, the ACMA may discuss the comments, and any proposed changes to the draft licence, with the licensee.

> The ACMA would then offer the licensee, in writing, a spectrum licence to replace the licensee’s apparatus licence (section 56). The offer would identify the spectrum licence to be issued, specify the amount of spectrum access charge payable and the date on which the offer will close (paragraph 56 (2) ). A licensee would have at least one month to accept the offer (subsection 56 (3)).

> If a licensee gives the ACMA a written notice accepting the offer and pays the spectrum access charge, the ACMA would issue a spectrum licence to the licensee (section 57).

> If a licensee does not accept the ACMA’s offer, the ACMA may allocate the spectrum by issuing a spectrum licence to another person in accordance with section 60 of the Act and the apparatus licence that it replaces would then cease to be in force (subsection 58 (3)).

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> The spectrum licences would come into force on the day specified in the licence, and would be in force for the period set out in the licence (section 65). This period may be up to 15 years (subsection 65 (3)). The ACMA intends that all spectrum licences issued in the 1800 MHz band will have a common expiry date, that is, they will expire on the same day in 2028.

> It is a condition of a spectrum licence (under section 69 of the Act) that radiocommunications transmitters must not be operated under the licence unless the registration requirements in Part 3.5 of the Act have been met. After issuing spectrum licences the ACMA will register devices to be operated under the licences in the Register of Radiocommunications Licences.

6.2 Declaring spectrum for reallocation by spectrum licensing

A summary of the overall reallocation process is described below and illustrated in Figure 4.

Figure 4 Timeline of a spectrum reallocation declaration

> Section 153E of the Act provides that the minister must not make a spectrum reallocation declaration in relation to a particular part or parts of the spectrum, unless, during the previous 180 days, the ACMA has given the minister a recommendation under section 153F.

> Prior to giving such a recommendation, the ACMA must give potentially affected apparatus licensees an opportunity to provide written comment on the draft recommendation the ACMA proposes to make to the minister.2

2 A potentially affected apparatus licensee is the licensee of an apparatus licence which would become an affected apparatus licence if a declaration is made in accordance with the ACMA’s recommendation (subsection 153G(6)). An affected apparatus licence is one that authorises operation of devices at frequencies that are wholly or partly within the part or parts of the spectrum, and within the area or areas, specified in the ACMA’s recommendation (section 153D).

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> Under section 153 F of the Act, the draft recommendation must:

a. specify one or more parts of the spectrum to be re-allocated3 b. include the period that, in the ACMA’s opinion, the declaration should specify as

the reallocation period.> The ACMA may include other matters in the recommendation where relevant. The

reallocation period sets the timeframe during which the reallocation process is to be completed. The period must begin within 28 days of the spectrum reallocation declaration being made by the minister and must run for at least two years. During this time, incumbent apparatus licensees may continue to operate transmitters in accordance with the conditions of their apparatus licence. Alternatively, incumbent apparatus licensees may relocate their operations to different frequency bands.

> At the end of the reallocation period, all apparatus licences operating in the band to which section 153H applies are cancelled.

> The reallocation deadline sets the date by which the ACMA must have allocated at least one spectrum licence in the re-allocated spectrum. The ACMA would likely achieve this through a price-based allocation process, such as auction, for which the details would be finalised closer to the date of auction. The reallocation deadline must be at least 12 months before the end of the reallocation period.

3 ‘Parts’ of the spectrum are defined by their frequency and geographic boundaries. The datum used for coordinates of these ‘parts’ is the Geocentric Datum of Australia (GDA) 1994 and the naming convention used is the Hierarchical Cell Identification Scheme (HCIS).

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