Australia will consider reverse auctions of broadcasting spectrum as one way to promote more efficient use of spectrum, akin to the approach legislated three years ago by the US, according to Paul Fletcher, parliamentary secretary to the minister for communications.
“The US is pioneering reverse auctions of broadcasting spectrum, and while these are highly complex and have suffered delays, it is an example of the innovative market-based approach we are looking at,” Fletcher said in a speech prepared for the Spectrum Review industry workshop.
“There will be lessons we can learn that can be used to design effective processes for our market.”
The government is considering how to promote better spectrum efficiency as part of an ongoing spectrum review to modernise the current framework, which was established in 1992 under the Radiocommunications (RadComms) Act. The framework was last reviewed by the Productivity Commission in 2002.
Fletcher, a former Optus executive, said there are “rigidities” in the current way Australia regulates spectrum “which often mean that those to whom spectrum has been allocated have little incentive to pursue the most efficient use of that spectrum, either in their own hands or in the hands of others.”
It’s especially hard to trade broadcasting spectrum, and as a result broadcasters have little incentive to use their spectrum allocations more efficiently, he said.
“Imagine if you decided that you only needed a fraction of the current digital delivery capacity of your 7 MHz multiplex – perhaps because new compression technology meant you could deliver your existing services with a fraction of the current data levels,” he said.
“Today if you hold spectrum in the Broadcasting Services Band, there is no way that you can sell or rent out spare capacity.”
Fletcher also suggested a similar mechanism for non-broadcaster spectrum.
“Should there be a mechanism to allow spectrum owners to hand the spectrum back ‘on consignment’ to government, so government can auction it off – with the proceeds shared between the owner and government in an agreed ratio?”
Fletcher cited several technology advances that have made it possible to make more efficient use of spectrum and therefore require spectrum owners to need less than they did previously.
These include digital technology replacing or supplementing analog in mobile phones, broadcast radio and TV; improved modulation and compression techniques; interference mitigation methods; and emerging technologies that enable spectrum sharing, he said.
“The spectrum sharing possibilities are increasing, with new technologies on the horizon such as cognitive radio and dynamic spectrum access,” he said.
“Some of these emerging technologies are hard to accommodate under the current regulatory framework. To allow for the new ultra-wide band technologies, for example, we have needed legislative changes so spectrum and class licences could co-exist.”
Australian broadcasters have previously said they want no part in a revamped regulatory framework for spectrum, contrary to calls by telcos and Foxtel for broadcasting spectrum to be included. Currently, wireless spectrum used by telcos and broadcasters are treated differently.
A similar debate between telcos and broadcasters occurred in the US when Congress was deciding whether to authorize reverse auctions of broadcast spectrum.
In a submission last year to the spectrum review, the ABC argued that the goals of broadcasting spectrum regulation are different and should remain separate.
“Broadcast spectrum planning in Australia is based on a series of policy principles that seek to maximise public benefit by ensuring quality, diversity and, as far as possible, universal availability of broadcasting services,” it said.
“To this end, the BSBs [broadcasting services bands] are administered separately from the rest of the radiofrequency spectrum, as set out in the Broadcasting Services Act 1992, and are subject to detailed planning processes that provide stringent, pre-emptive protection from interference. The ABC is strongly of the view that, to provide the best possible services to Australian audiences, broadcasting spectrum should continue to be planned on this basis within any redeveloped spectrum framework.”