ACCC calls for competition feedback on bandwidth auction

The Australian competition watchdog is calling for industry feedback on whether the proposed auction of unused 1800MHz spectrum bandwidth in regional Australia should be subject to competition limitations.

The Australian Competition and Consumer Commission (ACCC) is calling for submissions from industry and other stakeholders on whether competition limits should be imposed on the proposed auction of unused 1800MHz spectrum bandwidth in regional Australia.

In February, the Australian Communications and Media Authority (ACMA), which is responsible for Australia's radio frequency bandwidth allocation, released the terms of a draft recommendation proposing the reallocation of the 1800MHz long-term spectrum licences in regional areas.

The ACMA proposed the recommendation to Communications Minister Malcolm Turnbull that the frequency ranges 1725MHz to 1785MHz and 1820MHz to 1880MHz in regional Australia be declared for allocation via the issue of spectrum licences. It was proposed that the regional 1800MHz band allocation be determined by auction.

The 1800MHz bandwidth is used by mobile network providers and rail operators in metropolitan areas, but in regional areas is mainly used for fixed point-to-point connections to provide backhaul to meet universal service obligations. There are parts of the spectrum that are currently unused in regional areas.

The Department of Communications subsequently requested that the ACCC provide advice on the potential competition limits for the proposed auction, which is set to take place by the end of November 2015.

The ACCC now wants stakeholders' views on the need for, and impact of, imposing competition limits on the proposed auction.

"While national mobile broadband markets are generally competitive in Australia, the ACCC is aware of some impediments to competition in regional, rural, and remote areas," said the ACCC in a letter published on its website calling for industry feedback.

"This largely stems from the significant costs of providing geographic coverage to these areas, which are characterised by low population density and therefore a lower potential subscriber base and uncertain commercial viability," it said. "The ACCC considers that Telstra likely has a competitive advantage in regional areas due to the broader geographic coverage of its 3G and 4G networks."

The ACCC expects the unused bandwidth to be a desirable asset for the country's mobile network operators, suggesting that the 1800MHz band is a highly sought-after spectrum range for mobile broadband use, because it has been internationally standardised for long-term evolution (LTE) technology -- or 4G -- to provide mobile broadband services.

"We anticipate that the 1800MHz spectrum acquired in the auction will mainly be used for deploying LTE technology to provide mobile broadband services," it said. "It could also be used to deploy smart networks, such as smart energy grids, or automated systems for transport (safety and signalling systems) or other infrastructure."

However, the ACCC is also asking for views on the likely intended uses of the spectrum in regional areas. Additionally, it is seeking feedback on potential substitutes for spectrum in the 1800MHz band in regional areas, and asking for feedback on whether there are any other technical factors that it should take into account in its assessment of competition limits relating to the proposed auction.

The ACCC will receive feedback until April 17.