Interim access for the 1800 MHz bandRegional areas of AustraliaFEBRUARY 2015

CanberraRed Building Benjamin OfficesChan Street Belconnen ACT

PO Box 78Belconnen ACT 2616

T +61 2 6219 5555F +61 2 6219 5353

MelbourneLevel 32 Melbourne Central Tower360 Elizabeth Street Melbourne VIC

PO Box 13112Law Courts Melbourne VIC 8010

T +61 3 9963 6800F +61 3 9963 6899

SydneyLevel 5 The Bay Centre65 Pirrama Road Pyrmont NSW

PO Box Q500Queen Victoria Building NSW 1230

T +61 2 9334 7700 1800 226 667F +61 2 9334 7799

Copyright notice

http://creativecommons.org/licenses/by/3.0/au/

With the exception of coats of arms, logos, emblems, images, other third-party material or devices protected by a trademark, this content is licensed under the Creative Commons Australia Attribution 3.0 Licence.

We request attribution as: © Commonwealth of Australia (Australian Communications and Media Authority) 2015.

All other rights are reserved.

The Australian Communications and Media Authority has undertaken reasonable enquiries to identify material owned by third parties and secure permission for its reproduction. Permission may need to be obtained from third parties to re-use their material.

Written enquiries may be sent to:

Manager, Editorial and DesignPO Box 13112Law CourtsMelbourne VIC 8010Tel: 03 9963 6968Email: candinfo@acma.gov.au

acma | iii

IntroductionBackground 1The long term—spectrum licensing of the band 2The problem—making currently vacant spectrum available prior to its reallocation 2Early access (immediately after auction) 3Interim access 4

1. Interim access licence characteristicsLicence characteristics 6Embargo exemptions 6Licence type 6Licence fee—PTS tax arrangements 7Interim access licence term 8Option one—operation authorised until the end of the auction 9Option two—operation authorised until the end of reallocation period 9Use it or lose it (UIOLI) condition 9

2. Interim access licence issueModified priority assignments 11Stage one—initial notification period and application window one 13Stage two—notification period and application window two 14Stage three—notification period and application window three 14Example 14Timeline 15

Invitation to commentMaking a submission 17

Attachment A—Indicative timeline

acma | iv

IntroductionBackgroundThere is demand from various industry sectors for access to spectrum in the frequency ranges 1725–1785 MHz and 1820–1880 MHz band in regional Australia (‘the regional 1800 MHz band’). This is due to the increasing availability of Long Term Evolution (LTE) technology, a 4G technology, to deliver mobile services. Figure 1 provides an illustrative map of regional Australia (the areas in red).

Figure 1 Map of regional Australia

The ACMA is guided in its spectrum management functions by the object of the Radiocommunications Act 1992, set out in section 3, and the Principles for spectrum management. Key to both the objects of the Act and the principles is to maximise the overall public benefit derived from use of the radiofrequency spectrum. Among other things, the ACMA seeks to ensure that regulatory arrangements enable spectrum to move to its highest value use or uses.

The regional 1800 MHz band is currently licensed for fixed services and the ACMA had considered that the current regulatory arrangements limited the ability of prospective users to access the spectrum for mobile services. Therefore in 2012, the ACMA commenced a review of arrangements in the band, with a view to identifying options to facilitate the deployment of mobile services.

acma | 1

The long term—spectrum licensing of the band The ACMA has consistently stated that its preferred long-term licensing arrangement for the regional 1800 MHz band is spectrum licensing. This licensing framework would maximise flexibility for licensees, enable efficiencies with adjacent spectrum-licensed holdings in metropolitan areas and, by providing new licensees the opportunity to gain access to the band, best ensure the band moves to its highest value use or uses over time.

Accordingly, the ACMA has commenced the process to reallocate the regional 1800 MHz band by spectrum licensing. Its current indicative timeline for the reallocation process includes an auction in late November 2015. More information on the reallocation process for the regional 1800 MHz band is available in the recently released discussion paper Draft spectrum reallocation recommendation for the 1800   MHz band—Regional areas of Australia .

Given the ACMA’s current understanding of the level of demand for access to the regional 1800 MHz band, it is also considering options to facilitate interim—or temporary—access to the band prior to the auction. This discussion paper: > sets out issues associated with interim access> identifies a model that could be used to authorise these interim licences> invites comment from interested parties on interim access.

Part 3.6 of the Act outlines a number of steps in the reallocation process that the ACMA must follow before an allocation of licences can take place. Some of the steps involve decisions by the Minister for Communications, the key one being the making of the reallocation declaration under section 153B of the Act.

The first key step in the reallocation process is for the ACMA to make a recommendation to the minister under section 153F of the Act that he specify certain parts of the spectrum as subject to reallocation. If the minister accepts a reallocation recommendation, he or she makes a reallocation declaration for the spectrum. This declaration establishes the ‘reallocation period’, after which any existing apparatus licences in the band will cease. During this period, the ACMA would conduct a price-based allocation of spectrum licences using the spectrum.

The problem—making currently vacant spectrum available prior to its reallocationThe actual reallocation process is indicatively expected to conclude around mid-2017, following the auction in November 2015. Meanwhile, significant parts of the band that could potentially be used for new services in the interim.

The regional 1800 MHz band is currently predominantly used for fixed point-to-point links. In some geographic areas and frequency ranges, this use by existing services is relatively intensive, while in other regional areas some or all of the spectrum is currently unused.

The ACMA is aware of significant commercial interest in immediate access to vacant parts of the regional 1800 MHz band to deploy mobile services using LTE technology. For example, applications have already been received from some parties for exemptions to existing embargo arrangements.

All other things being equal, it will generally be better to have spectrum utilised than not, especially if there are genuine uses to which it can be put. Given the formal reallocation process that is underway, however, providing temporary access can raise a range of transactional overheads and market, legal and coordination issues. Depending on the methods adopted, temporary access arrangements also have the

2 | acma

potential to affect both the timing and substance of the longer term allocation processes, and questions no doubt arise about the relationship between these processes.

In overview, there are two options for giving temporary access to currently vacant spectrum prior to the end of the reallocation period. The ACMA has used the terms ‘early’ and ‘interim’ access to distinguish these two options.

The term ‘early access’ is used to refer to options that give successful bidders access to any vacant parts of the spectrum they have acquired at auction for the period until the end of the reallocation period. The great strength of early access options is that, by giving use of vacant spectrum to the highest bidders for long-term spectrum licences, the community is assured the spectrum is moving to its highest value use, and the licensee is assured any services it commences will be able to continue after the end of the reallocation period.

However, a disadvantage of the early access options is that any vacant spectrum must necessarily remain unused until after conclusion of the auction. A second approach would be to provide temporary access to vacant parts of the band prior to the auction and potentially prior to the making of any reallocation declaration. This approach is referred to as ‘interim access’. In the case of the regional 1800 MHz band, as there is currently an embargo on new apparatus licences in the band in anticipation of the reallocation processes, any policy of ‘interim access’ would require exceptions to be made to the current embargo.

The ACMA has, since 2012, undertaken considerable consultation with carriers and other interested stakeholders on possible ways of giving ‘interim’ access to the regional 1800 MHz band, but has yet to secure consensus on an interim access solution.

While this paper is primarily concerned with interim access options, it is also important to consider first how early access arrangements could work, including any strengths and limitations, as to some extent these arrangements represent an alternative path to early deployment of new services in the band. Any ‘interim access’ policy adopted by the ACMA may also have implications for the opportunities available to bidders who are successful at the auction of spectrum licences for early access to the spectrum they have obtained.

Early access (immediately after auction)Under the legislative process for reallocation, any incumbent apparatus licensee may continue to operate devices in accordance with their licence until the end of a reallocation period. Under the Act, that period must be not less than two years. Incumbent apparatus licensees may, of course, choose to cease operation before the end of the reallocation period.

This means that successful bidders at auction will not necessarily secure access to the spectrum they won until the end of the reallocation period.

In the regional 1800 MHz band, there are some geographic areas and frequency ranges where there are currently no apparatus licences issued. Under paragraph 153P(2)(e) of the Act, the ACMA can issue an apparatus licence in parts of the spectrum where a spectrum reallocation declaration is in force if it is satisfied that the special circumstances of the particular case justify the issuing of the licence

Following the 2013 auction of spectrum licences in the 700 MHz band, the ACMA found that ‘special circumstances’ existed in relation to applications for apparatus licences from successful bidders for the 700 MHz spectrum, in areas where the spectrum they had acquired at auction was vacant prior to the end of the reallocation period (and the commencement date of their spectrum licences). Based on the model

acma | 3

of early access to 700 MHz band spectrum, the ACMA anticipates it would be able to consider, on a case-by-case basis, applications from successful bidders for apparatus licences to provide early access to any such ‘vacant’ 1800 MHz band spectrum that corresponds to the spectrum licences they acquired at auction.

Issue of ‘early access’ apparatus licences would potentially allow winning bidders to commence deployment of services in any vacant parts of the spectrum they have purchased, soon after the conclusion of the auction and receipt processes.

Like all other apparatus licences in the band, any ‘early access’ apparatus licences issued would be automatically cancelled at the end of the reallocation period. However, new spectrum licences would commence immediately after the reallocation period and end on 17 June 2028, aligning them with the expiry of reissued 1800 MHz spectrum licences. This is illustrated at Attachment A. Further discussion on issues and timelines for regional 1800 MHz band spectrum licences is contained in the ACMA’s recent discussion paper, Draft spectrum reallocation recommendation for the 1800 MHz band—Regional areas of Australia.

The relationship, including the potential ‘trade-offs’ between ‘early access’ apparatus licensing and any policy to allow interim access, is discussed below.

Interim accessUnlike ‘early access’ licences, any interim access licensing arrangements would authorise access to the regional 1800 MHz band before a market-based allocation of spectrum licences. Under interim access arrangements, the current embargo would remain in place, but the ACMA would consider applications for licences to authorise the deployment of mobile services (subject to coordination with existing services). Many characteristics of such an interim access licence are clear because the ACMA has an existing licence type and licence tax to authorise operation of mobile services in the regional 1800 MHz band (see Chapter one for further discussion).

There are, however, two broad options for the term of any interim access licence. Operation could be authorised until the end of the auction—currently anticipated to occur in late November 2015—or until the end of the reallocation period (indicatively, June 2017). Either option would allow increased utilisation of currently vacant parts of the regional 1800 MHz band. However, there is no guarantee services using those licences would be able to continue after the end of the reallocation period, as this would depend on the licensee successfully obtaining spectrum licences covering the area in question at the auction. The ACMA also notes that authorisation only until the end of the auction would increase the likelihood that spectrum is available for early access licences, but create a risk that a service that operated under an interim access may be unable to continue past December 2015 (if, for example, the licensee is unsuccessful in acquiring spectrum, or the right spectrum, at auction).

Chapter one discusses the characteristics of an interim access licence—including options for the term of the licence. Chapter two outlines the approach the ACMA proposes to take to issue any such licence.

4 | acma

1. Interim access licence characteristics

There is demand from some parties for immediate access to any parts of the regional 1800 MHz band that are currently vacant. The ACMA has been involved in consultation processes with stakeholders since 2012 to identify licensing arrangements that might respond to this demand. As noted earlier, the ACMA has been unable so far to facilitate a consensus position between known interested parties on the issue of interim access to the band. However, the ACMA is continuing to explore whether and how to enable interim access to the band (that is, access prior to the November 2015 auction).

As noted earlier, interim access arrangements in the regional 1800 MHz band may, depending on their nature, affect the ability of successful auction bidders to obtain early access licences. To avoid any unintended consequences, the ACMA considers it critical to further consult with interested parties, and particularly with potential auction bidders, before implementing any interim access arrangements.

Key issues in making the regional 1800 MHz band available via interim access arrangements include:> A range of legal issues, including the processes raised by the reallocation of the

band from apparatus to spectrum licensing, notably the role played by the reallocation declaration period. A reallocation declaration has the effect of cancelling apparatus licences at the end of the reallocation period.

> There is highly variable availability of spectrum because of existing apparatus licences. That is, different amounts of spectrum are available at different locations, and, indeed at some locations, no spectrum will be available.

> The management of interference and coordination issues with existing apparatus licensees in the band.

> There is no certainty that the holder of an interim access licence will acquire the same spectrum—or indeed any spectrum—at the auction. That is, there is no certain ‘transition’ between interim access and long-term arrangements.

> Depending on the nature of the interim access arrangements, they may restrict the ability of successful bidders to obtain ‘early access’ apparatus licences after the auction.

Following consideration of these issues, the ACMA has identified the following criteria as important elements of any interim access arrangement in the regional 1800 MHz band. Any interim licencing process should be: > Transparent—any arrangement should be simple and transparent. Information

should be publicly available so that all interested parties can understand how interim access arrangements would be implemented, including how to apply for such a licence. This paper is part of this process.

> Equitable—any interim access arrangements must treat all parties equitably to ensure that no party is advantaged over another. In particular, all interested parties must have a fair opportunity to apply for any such licence and incumbent services must not be disadvantaged.

> Efficient—allocation of spectrum should promote efficient spectrum use (and deter hoarding).

> Practical and workable—any interim access arrangement needs to be practical and workable. Applications processes should be as simple as possible and interim access licences should authorise access to sufficient spectrum to be useful to

acma | 5

licensees. In addition, application processes should not detract from or delay the ACMA’s expected November 2015 auction.

> Timely—given the interim access is intended to authorise access to the spectrum as quickly as possible—and certainly before November 2015—arrangements should allow for quick implementation and not impose excessive or undeliverable resource demands on either prospective licensees or the ACMA.

The ACMA recognises there may in some circumstances be a potential conflict between the efficiency and equitable access criteria noted above.

This chapter discusses the characteristics of any interim access licence in the regional 1800 MHz band, taking account of these criteria. Chapter two discusses how the ACMA proposes to make available any such licences.

Licence characteristicsEmbargo exemptionsThe regional 1800 MHz band is currently under embargo (embargo 62) that prohibits the issue of apparatus licence in the band.1 Embargoes serve to restrict access to spectrum, but it is recognised that there may be circumstances that warrant the granting of an exemption from an embargo. Under existing regulatory provisions, the ACMA is able to consider such embargo exemption requests on a case-by-case basis.2

However, in order to streamline the process for the issue of interim access licences, prospective Public Telecommunication Service (PTS) licensees (and accredited persons) could consider they have been given an exemption to embargo 62 if:> the requirements of radiocommunications assignment and licensing instructions

(RALI) MS34 (RALI MS34) are met (see below)> applications are submitted during the defined application window> the spectrum availability requirements defined for each application window, as

described in the modified priority assignments section, are met.

Any services deployed under interim access arrangements would need to operate on a co-primary basis with existing fixed-link services using the frequency coordination and licensing procedures in accordance with RALI MS34. Operation in accordance with arrangements in this RALI would protect existing fixed-link services from new mobile services.

The ACMA considers this approach would be transparent and equitable because it balances the needs of both aspirant and incumbent licensees. It is also practical, workable and timely because it relies on established processes.

Licence typeAn apparatus licence type already exists that would authorise mobile service operation in the regional 1800 MHz band—a PTS licence (PMTS Class B apparatus licence). A PTS licence is a type of apparatus licence authorising services that consist of one or more stations operated to provide public telecommunications services, including LTE technology.3 The coordination requirements of the service would enable coexistence

1 Spectrum embargoes are an administrative tool the ACMA uses to facilitate orderly planning of the spectrum. Embargoes provide notice of the ACMA’s intention to restrict the allocation of new licences in a band pending its replanning and alert industry to the start of a planning process.2 Information on applying for an embargo is on the ACMA website.3 The PTS licence type and its various licence sub-types are defined in the Radiocommunications (Interpretation) Determination 2000. More information is available on the Public Telecommunications

6 | acma

with existing services in the regional 1800 MHz band. In order to allow immediate access to the band, the ACMA therefore proposes to utilise this existing licence type for interim access arrangements.

As with embargo exemptions, the ACMA considers using a PMTS Class B apparatus licences would be practical, workable and timely. It utilises an existing licence category rather than creating delays by designing a new category.

Licence fee—PTS tax arrangements Since there is an existing licence type that could authorise mobile service operation in the regional 1800 MHz band, there is also an existing licence tax (or fee).

The Radiocommunications (Transmitter Licence Tax) Determination 2003 (No. 2) sets out the fee for a PMTS Class B apparatus licence in the regional 1800 MHz band. The current fee is $0.01 for each paired MHz of spectrum on which the service may be operated, multiplied by the population of the area to which the service relates as worked out in the 2006 Census. The area mentioned currently relates to the local government area boundaries at the time of the 2006 Census.

The ACMA is currently reviewing the Determination because it is due to sunset on 1 April 2015.4 As noted in the discussion paper about the sunsetting and remaking of the Determination, the ACMA is proposing to base the taxes for the PMTS Class B apparatus licences (including those in the 1800 MHz band) using the HCIS 2 level population derived from the 2011 Census data rather than the local government areas.5 The unit price of $0.01 for each paired MHz of spectrum will remain unchanged.

Given the likely time frames associated with interested parties applying for, and the ACMA’s processing of, any interim access licence applications, it is expected that interim access licences would be issued based on the new tax arrangements in place after the Determination has been updated under the sunsetting processes.

The fees for deploying a transmitter in a particular HCIS2 will be calculated based on the total population of the HCIS2. This is regardless of the number of transmitters deployed and the actual population covered by the service. Licensees could, if the spectrum is available, deploy in multiple HCIS2s to cover a geographic area that suited their short-term needs. The fees would therefore be solely based on the population of each HCIS2.

However, the ACMA also anticipates that it will consider whether to review the licence tax for any PMTS Class B apparatus licences in the 1800 MHz band after the November 2015 auction. This means that taxation arrangements for interim access licences may change over the relatively short lifetime of those licences, depending on the term of the licence.

As with embargo exemptions and licence type, the ACMA considers relying on licence arrangements that are in place at the time that any interim access licence is issued is practical, workable and timely. It is also transparent and equitable because the tax arrangements are publicly available and may be readily accessed by all interested parties.

Service licence page of the ACMA website.4 Further information on the sunsetting of legislative instruments is on the ACMA website.5 HCIS is a naming convention developed by the ACMA that applies unique labels to each five-minute arc square cell in the Australian Spectrum Map Grid, derived from the cell’s position in a hierarchically arranged group of cells. The hierarchy has four levels, the smallest being HCIS level 1 (approximately 9 km x 9km) and the largest HCIS level 4 (approximately 330 km x 330 km).

acma | 7

Interim licence access designThe ACMA proposes to consider applications for interim licences via embargo exemptions for PMTS Class B apparatus licences, using the PMTS Class B licence tax arrangements current at the time of application.

The ACMA welcomes submissions on these proposed features of any interim access apparatus licence in the regional 1800 MHz band.

Interim access licence termApparatus licences are able to be issued up to a period of five years, though the majority are issued for annual terms. Apparatus licences are normally renewed annually.

In the case of the regional 1800 MHz band, however, the ACMA currently expects that the band will be reallocated by spectrum licensing. The ACMA is therefore planning to hold an auction in late November 2015. As noted earlier, this would allow case-by-case consideration of applications from success bidders for ‘early access’ apparatus licences to provide access to any ‘vacant’ spectrum that corresponds to the spectrum licences they acquired at auction. It would also see any apparatus licences already in the band expire by no later than the end of the reallocation period—which could be as little as two years after the date of the minister’s reallocation declaration (say, June 2017).

Given that the ACMA is considering issuing interim access apparatus licences in order to respond to demand for access to unused parts of the regional 1800 MHz band and that ‘early access’ apparatus licences would respond to such demand after the auction, it may be appropriate to issue any interim access apparatus licences with a term that varies from that of other apparatus licences.

The ACMA has identified two options for the term of any interim access licence: 1. Issue licences authorising operation only until the auction concludes.2. Issue licences for a 12-month period and allow renewal (if sought) until the end of

the reallocation period.

Attachment A provides an illustration and indicative timeline of these two options.

The ACMA emphasises that, irrespective of which tenure option is chosen, interim access arrangements will terminate after a relatively short period of time (at the latest, the end of the reallocation period). This is consistent with the ACMA’s objective of introducing spectrum licensing in the regional 1800 MHz band as soon as possible. The extent to which holders of any interim access licences can continue to operate services after that time will entirely depend on their success at auction or their ability to come to a commercial arrangement with a party who is successful at auction.

Option one—operation authorised until the end of the auctionUnder this option, the term of an interim access licence would cease once the auction has been completed.

This option would have the advantage of maximising the amount of ‘vacant’ spectrum at the end of the auction and hence the amount of spectrum for which the ACMA could consider applications for ‘early access’ apparatus licences from successful auction-bidders. Holders of interim access licences may potentially be able to apply for such licences, if they are successful at auction in obtaining the same part of the band they are already using.

8 | acma

However, there is no guarantee that the holder of an interim access licence may be successful at auction. If unsuccessful, then under this option their interim access licence would be cancelled and they would be unable to apply for an ‘early access’ licence. They would therefore be unable to continue to provide any service they may have deployed under their interim access licence.

Even if the holder of an interim access licence successfully obtained spectrum licences for a different part of the 1800 MHz band in the same area, the spectrum they acquire at auction may not be vacant. (As outlined earlier, incumbent apparatus licensees may continue to operate until the end of a reallocation period.) In that case, they would be unable to apply for an ‘early access’ licence and could not continue to provide services deployed under the interim access licence.

This option maximises the likelihood that ‘early access’ licences can be issued and services deployed under those licences. However, it creates a risk that the holder of an interim access licence may need to cease providing a service at the end of the auction.

Option two—operation authorised until the end of reallocation periodUnder this option, interim access licences would be treated like all other apparatus licences in the regional 1800 MHz band. Licences would be issued for a 12-month period and could be renewed until the end of the reallocation period.

This option would have the advantage of giving licensees a slightly longer licence term in which to operate a service. In addition, if the licensee is successful in obtaining spectrum at auction, then at the end of reallocation period they could continue operation under their spectrum licence.

However, this option would reduce the amount of ‘vacant’ spectrum at the end of the auction in which ‘early access’ licences could be issued to winning auction bidders and, for example, possibly defer a more intensive capital commitment by the successful spectrum licence applicant.

Use it or lose it (UIOLI) conditionIf interim access licences run to the end of the reallocation period, there is a risk that a party may apply for interim access licences simply in order to deny their competitors access to spectrum immediately after the auction. The ACMA considers that interim access arrangements must promote efficient spectrum use and is concerned that this risk of ‘hoarding’ may contribute to inefficient use. In order to manage this risk, the ACMA would apply a ‘use it or lose it’ (UIOLI) condition to interim access licences. This would be intended to encourage parties to apply for interim access licences only where they actually intended to use those licences

In order to ensure that interim access arrangements are also practical and workable, the ACMA proposes that the UIOLI condition should be simple. The ACMA therefore proposes that the condition on each interim access licence requires a licensee to:> deploy at least one base station (covering a HCIS2 block)> provide a continuing service> achieve this deployment and service within the initial 12-month term of the licence.

Before renewing an interim access licence, the ACMA would require the licensee to provide a statutory declaration certifying compliance with these three conditions as evidence of having achieved the UIOLI requirement.

Interim access licence term

acma | 9

The ACMA welcomes submissions from interested parties on the appropriate term of any interim access apparatus licence in the regional 1800 MHz band.

The ACMA notes it would also apply a ‘use it or lose it’ condition to licences issued until the end of the reallocation period.

10 | acma

2. Interim access licence issue This chapter discusses how the ACMA proposes to issue any interim access apparatus licences.

The ACMA has considered various options for the issue of interim access apparatus licences. These range from a simple ‘first-in-time’ approach to a detailed engineering analysis of all applications at the same time to establish the optimal assignment of licences to a retention of the priority assignment model.6

All these options have significant disadvantages when considered against the criteria identified in Chapter one. A first-in-time approach is not generally an efficient way to allocate licences when demand is greater than supply, as the ACMA understands is the case in the regional 1800 MHz band. Undertaking a detailed engineering analysis is unlikely to be practical and workable, and will certainly not be timely. Several stakeholders have already raised concerns about the equity of the priority assignment model.

The ACMA has concluded that a modified form of the priority assignment model may, on balance, be the most appropriate way of issuing any interim access apparatus licences. The modifications are designed to ensure much greater equity between all potential applicants and take account of the existing heavy use of parts of the band for apparatus-licensed fixed-link services. That model is discussed below.

The ACMA recognises, however, that there are also limitations with this model. In particular, while it is certainly transparent, equitable, practical and workable—and the ACMA considers it would promote efficient spectrum use—some parties may consider it limited in terms of timely issue of licences. A second limitation is that it may leave vacant spectrum unused in a few areas where there is some spectrum currently available, but insufficient unused spectrum to permit ‘equitable’ access. That is, there may be insufficient unused spectrum to permit access by several parties.

Modified priority assignmentsThe ACMA has developed a ‘modified priority assignment model’ to issue any interim access apparatus licences in the regional 1800 MHz band. This appropriates some features of a priority assignment model on which the ACMA previously consulted (see Figure 2) but has been modified extensively in response to legitimate stakeholder concerns that were raised in previous consultations.

Figure 2 Priority assignments for regional Australia

Frequency Channel (2 x 5 MHz) Regional

1710/1805 MHZ 1Currently spectrum-licensed2

34

Telstra(2 x 15 MHz)5

67

VHA(2 x 15 MHz)8

910 Optus

(2 x 15 MHz)11

6 This model was first canvassed with industry in Issues paper 1 of the review of the band.

acma | 11

1213

Other*(2 x 15 MHz)14

1785/1880 MHz 15

*Licensees would be issued within this segment on a ‘first-in-time’ basis

In the original proposal, organisations were only able to apply for licences in the segment they were allocated, as per Figure 2. (The priority assignments in Figure 2 align, where possible, with the carriers’ existing metropolitan spectrum licence holdings, which would improve efficiency of spectrum use.) However, a key concern raised through consultation was that some potential licensees were assigned a segment relatively free of fixed links while others were assigned a segment quite heavily encumbered by fixed links. This meant that some potential licensees would be severely restricted in their ability to apply for apparatus licences.

To address this concern, under the modified priority assignment model the ACMA would only issue an interim access apparatus licence in those geographic areas where sufficient spectrum is available for four parties to acquire licences. The ACMA considers this is an important element of the process because it initially ensures equitable access.

However, different amounts of spectrum are available in different parts of the regional 1800 MHz band. Therefore, to further increase the availability of spectrum, applications for interim access apparatus licences would be conducted over three stages. This would increase the likelihood that some unencumbered spectrum will be available for licensing and further the efficient use of the spectrum.

Interested parties would be able to apply for interim access licences in these stages:> stage one—areas where 2 x 60 MHz is vacant (maximum per licensee 2 x 15 MHz)> stage two—areas where at least 2 x 40 MHz is vacant (maximum per licensee

2 x 10 MHz)> stage three—areas where at least 2 x 20 MHz is vacant (maximum per licensee

2 x 5 MHz).

Determining the amount of spectrum available would be performed on a site-by-site basis using the parameters of the proposed system. That is, an accredited person would need to assess every channel at the proposed site using the parameters (including antenna gain, transmitter power, antenna tilt) of the proposed system. The amount of available spectrum at that site would then be defined as the number of 5 MHz channels that could be successfully assigned. Provided the spectrum availability requirements for each stage (as described above) are met, the ACMA would consider that exemptions had been granted to embargo 62 for any PTS licence application received during the application window of each stage.

In the interests of equity, it would be essential that applications only be considered in areas where sufficient spectrum is available for four interested parties to be accommodated and able to gain interim access.

Interested parties would be able to apply for an interim access licence in any geographic area where sufficient spectrum is available. The ACMA will not identify any particular locations that should be used by aspirant licensees. Instead, each aspirant licensee would need to consider sites that align with their particular business needs and undertake frequency assignment work at those sites to determine spectrum availability. Prospective licensees need to be aware that the locations and frequencies of an interim access licence may not align with any future spectrum licences acquired

12 | acma

through an auction process (assuming the prospective licensee is successful in obtaining a spectrum licence at auction).

Stage one—initial notification period and application window oneInterim access apparatus licence processes need to be transparent so that all interested parties have an opportunity to consider whether to apply for licences and prepare applications. Aspirant licensees will need time to assess options and prepare an application for licences. This would necessarily include engaging an accredited person to perform frequency assignment activities.7

The ACMA would therefore set an initial notification period of two weeks to give applicants time to assess their options for interim access. Applicants could undertake necessary processes including, for example, analysing spectrum availability in areas of interest.

At the end of this initial notification period, the ACMA would open the first application window. During this window, interested parties would be able to lodge PMTS Class B apparatus licence applications or expressions of interest (for access to the ‘other’ spectrum)—in accordance with the priority assignment model outlined in Figure 2—in any or all geographic areas where 2 x 60 MHz is unencumbered. Each applicant could apply for up to 2 x 15 MHz of spectrum in any geographic area. That is, the first stage of the modified approach would be the same as priority assignments.

Applications received for the ‘other’ spectrum would be assessed on a first-in-time basis. This is similar to the release process of the 2.1 GHz and 3.6 GHz bands. Under this process, prospective licensees submitted an expression of interest for a portion of the desired amount of spectrum at specified locations. The ACMA then contacted each prospective licensees’ nominated accredited person (in order of receipt of the expression of interest) to perform frequency assignment work. This allowed prospective licensees to assess their application against applications that came before them.

Applications by Telstra, Optus and VHA are not required to go through this process and can be submitted via the usual methods for a PTS licence.

The first application window would be open for two weeks from the end of the initial notification period.

Stage two—notification period and application window twoIn the second stage, applicants would be able to apply for access to spectrum in areas where more than 2 x 40 MHz is available. This would provide a minimum of four 2 x 10 MHz channels. This means that in any area four parties could gain licences.

Stage two is expected to commence two weeks after the closure of application window one. This period may be increased to enable processing if a large number of applications are received for the stage one release.

Once the first application is received by an applicant, the ACMA would notify the relevant accredited persons and start processing applications.

Applications received for the ‘other’ spectrum would be assessed similar to the stage one release on a first-in-time basis.

When stage two commences, the second application window would be open for two weeks. During this application window, interested parties would lodge PMTS Class B apparatus licence applications or expressions of interest (for access to the ‘other’

7 Further information on the role of accredited persons, and a list of APs, is on the ACMA website.

acma | 13

spectrum) in any or all geographic areas where at least 2 x 40 MHz is unencumbered. Each applicant could apply for up to 2 x 10 MHz of spectrum in any geographic area, if it is available. To avoid conflicting assignments, channels should be assigned in the same order as the priority assignments in Figure 2. That is, Telstra should be assigned the lower 2 x 10 MHz; VHA the next lowest 2 x 10 MHz and so on. If there are four sets of contiguous 2 x 10 MHz channels available at a site, then licences should be preferentially assigned in these rather than splitting an allocation into two 2 x 5 MHz channels.

Stage three—notification period and application window threeFinally, in the third stage, applicants could apply for access to spectrum in areas where at least 2 x 20 MHz is available; that is, a minimum of four 2 x 5 MHz channels.

Stage three is expected to commence two weeks after the closure of application window two. Again, if a large number of applications are received, this period may be increased to enable processing.

Once the first application is received by an applicant, the ACMA would notify the relevant accredited persons and start processing applications.

When stage three commences, the third application window would be open for one week. During this application window, interested parties would be able lodge PMTS Class B apparatus licence applications or expressions of interest (for access to the ‘other’ spectrum) in any or all geographic areas where at least 2 x 20 MHz is unencumbered. Each applicant could apply for up to 2 x 5 MHz of spectrum in any geographic area. To avoid conflicting assignments, channels should be assigned in the same order as the priority assignments in Figure 2. That is, Telstra should be assigned the lower 2 x 5 MHz; VHA the next lowest 2 x 5 MHz and so on.

ExampleAn illustration of how the modified priority assignment approach would work is provided in Figure 3, using regional Victoria as an example. The ACMA emphasises this is a hypothetical example only.

In Figure 3, the green dots represent existing licensed fixed services in the regional 1800 MHz band and the red lines represent the path connecting two ends of a fixed service. The quantum of spectrum used by these existing services cannot be determined from the map. Instead, accredited persons would need to rely on information in the Register of Radiocommunications Licences. The red square around the Melbourne/Geelong metropolitan area is subject to spectrum licensing and cannot be considered for interim access apparatus licences.

Figure 3 Map of regional Victoria

14 | acma

In this illustration, it is assumed that there is 2 x 60 MHz of spectrum available in Bendigo, Ballarat and Shepparton. Interested parties would be able to apply for 2 x 15 MHz according to priority assignments in stage one.

Within the Albury-Wodonga area, however, the example assumes there is only 2 x 40 MHz of spectrum available. Access in this geographic area could therefore be accessed under arrangements outlined in stage two. Interested parties would be able to apply for 2 x 10 MHz.

In Warrnambool, the example assumes only 2 x 15 MHz of spectrum is available. This means that the ACMA will not consider any application for an interim access apparatus licence.

As noted earlier, this example is for illustrative purposes only and is not intended to imply that this amount of spectrum may be available in these geographic areas.

TimelineThe ACMA is aiming to have all three stages completed in approximately three months from the date of promulgation of the interim access policy. The ACMA will not move to the next stage until licences have been issued for all applications in the preceding stage. This ensures these licences can be coordinated before applications are made for the next stage. This requirement has the potential to extend the time frame required to complete all three stages. However, access to some parts of the regional 1800 MHz band would be available before the three stages have been finalised. For example, spectrum access in stages one and two would be available before stage three commences.

acma | 15

Based on the current indicative timeline for the reallocation process, the minister may make the reallocation declaration before the completion of the three application windows. That is, the reallocation period may commence before the end of the three application windows. However, under section 153P of the Act, the ACMA may consider, on a case by case basis, applications for the issue of apparatus licences during a reallocation period.

On balance, the ACMA considers that the modified priority assignment model represents a transparent and equitable approach to interim access apparatus licensing in the regional 1800 MHz band where no aspirant licensee is advantaged over another. It also allows access to spectrum that would otherwise remain unused until the auction at the end of November 2015.

Interim access licence issueThe ACMA proposes to assess applications for interim access apparatus licences using the modified priority model.

The ACMA welcomes submissions on this proposal.

16 | acma

Invitation to commentMaking a submissionThe ACMA invites comments on interim access arrangements and any other issues raised in this paper. Submissions should be made:By email: SpectrumLicensingPolicy@acma.gov.au

By mail: The ManagerSpectrum Licensing Policy SectionSpectrum Management Policy BranchAustralian Communications and Media AuthorityPO Box 78Belconnen ACT 2616

The closing date for submissions is COB, Friday 20 March 2015.

Effective consultation The ACMA is working to enhance the effectiveness of its stakeholder consultation processes, which are an important source of evidence for its regulatory development activities. To assist stakeholders in formulating submissions to its formal, written consultation processes, it 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.

Publication of submissionsIn general, the ACMA publishes all submissions it receives. The ACMA prefers to receive submissions that 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 the claim.

The ACMA will consider each confidentiality claim on a case-by-case basis. If the ACMA accepts a claim, it will not publish the confidential information unless authorised or required by law to do so.

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 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.

PrivacyThe Privacy Act 1988 imposes obligations on the ACMA in relation to the collection, security, quality, access, use and disclosure of personal information. These obligations are detailed in the Australian Privacy Principles that apply to organisations and Australian Government agencies from 12 March 2014.

The ACMA may only collect personal information if it is reasonably necessary for, or directly related to, one or more of its functions or activities.

acma | 17

The purposes for which personal information is being collected (such as the names and contact details of submitters) are to:> contribute to the transparency of the consultation process by clarifying, where

appropriate, whose views are represented by a submission > enable the ACMA to contact submitters where follow-up is required or to notify

them of related matters (except where submitters indicate they do not wish to be notified of such matters).

The ACMA will not use the personal information collected for any other purpose, unless the submitter has provided their consent or the ACMA is otherwise permitted to do so under the Privacy Act.

Submissions in response to this paper are voluntary. As mentioned above, the ACMA generally publishes all submissions it receives, including any personal information in the submissions. If a submitter has made a confidentiality claim over personal information which the ACMA has accepted, the submission will be published without that information. The ACMA will not release the personal information unless authorised or required by law to do so.

If a submitter wishes to make a submission anonymously or use a pseudonym, they are asked to contact the ACMA to see whether it is practicable to do so in light of the subject matter of the consultation. If it is practicable, the ACMA will notify the submitter of any procedures that need to be followed and whether there are any other consequences of making a submission in that way.

Further information on the Privacy Act and the ACMA’s privacy policy is available at www.acma.gov.au/privacypolicy. The privacy policy contains details about how an individual may access personal information about them that is held by the ACMA, and seek the correction of such information. It also explains how an individual may complain about a breach of the Privacy Act and how the ACMA will deal with such a complaint.

18 | acma

Attachment A—Indicative timeline

Figure A1 1800 MHz regional spectrum access

acma | 19