ACMA defends secret 4G auction process

Last Tuesday, the Australian Communications and Media Authority kicked off the long-awaited auction for the 700MHz and the 2.5GHz spectrum bands that will be used for 4G services across Australia. The launch wasn't announced with much fanfare, largely because of confidentiality agreements signed by all participants, preventing them from talking while the auction is underway.

Telstra, Optus, and Vodafone have all confirmed that they are sitting in on the auction, which is expected to last until sometime in May, but none of the other bidders are currently known. It has been speculated that TPG is one participant, but the company has not confirmed this.

Telstra and Optus will be vying for spectrum in both bands, while Vodafone has indicated that it will only consider participating in the 2.5GHz auction, instead relying on the 20MHz of spectrum the company holds in the 1800MHz spectrum band.

The reserve price for the 700MHz spectrum will be AU$1.36 per megahertz per population, and the 2.5GHz spectrum will be auctioned off at AU$0.03 per megahertz per population.

None of the three confirmed telcos have been able to speak publicly on the auction since before it commenced, citing non disclosure agreements they have signed that would see severe punishment handed to them if they speak about the auction process before it has concluded.

This has been portrayed as a directive from Communications Minister Stephen Conroy ordering "unprecedented secrecy around the auction process", but in a blog post on Friday, the ACMA said that previous auctions had also had confidentiality agreements around them.

"Confidentiality rules are customary for all spectrum auctions internationally, and are essential for running a robust process. The rules set by the ACMA's predecessor organisations for past spectrum auctions have generally also required participants to maintain the confidentiality of auction information," the organisation said.

The confidentiality agreements are in place to ensure that the way the parties are bidding is not influenced by others participating in the auction, and to guard against companies colluding on spectrum bids. It means that, apart from the companies that are on the record as being part of the auction, it is not clear who has registered to bid or what their proposed bid is.

The ACMA said that once the auction has concluded, it will publish information about the bidders, what spectrum they have won, and how much will be paid for that spectrum.

Until last month, the telcos were expecting to have to pay for the spectrum up front in 2013, but would not get access to the spectrum until 2015. Conroy shifted the payments until the second half of 2014, and the ACMA is investigating whether the spectrum can be opened up to the successful bidders sooner in some areas where the analogue television signal has been switched off and the band has been restacked.