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Australian government keeps digital dividend spectrum price

Communications Minister Anthony Albanese last week quietly directed the industry regulator to keep the existing reserve price for the remaining 700MHz spectrum from the digital dividend auction.
Written by Josh Taylor, Contributor

In a ministerial direction quietly issued to the Australian Communications and Media Authority (ACMA), Communications Minister Anthony Albanese has directed the authority to keep the value of the remaining spectrum in the 700MHz band left over from the digital dividend auction at the reserve price.

The digital dividend auction in May saw Telstra, Optus, and TPG pick up lucrative digital dividend spectrum worth AU$1.96 billion to the Australian government, which the companies will begin to be able to use for long-term evolution (LTE) 4G networks in 2015.

The auction fell short of meeting the government's revenue targets, with a total of 30MHz left over from the auction, after Telstra and Optus picked up 40MHz and 20MHz of the 700MHz spectrum band, respectively, after Vodafone had announced that it would not bid for any of the spectrum.

Then-Communications Minister Stephen Conroy issued a draft direction in June for discussion proposing that the reserve price of AU$1.36 per MHz per population would be the minimum that the spectrum would be sold for, when the spectrum is eventually returned to the market.

Telstra said in its submission that it is keen to not see the spectrum be sold for anything less than the reserve price.

"Formal direction from the minister is necessary to ensure that the parties who purchased 700MHz spectrum in the recent auction are not disadvantaged by the unsold 700MHz lots being offered at a reduced price in a future allocation process," the company said.

"Assurance about this matter is important for the confidence of the industry as it continues to invest in mobile networks, so that millions of Australian consumers and businesses can continue to enjoy the benefits of having access to the latest mobile broadband technology and services."

Vodafone, on the other hand, argued that there is no reason for the minimum price to be set at this time.

"The imposition of a minimum value above the recently observed market value of the spectrum seems premature. Instead, the matter of defining a minimum value for the relevant spectrum should be within the scope of the ACMA's post-auction review," Vodafone said.

Albanese's direction released on Friday stated that the price would remain at least AU$1.36 per MHz per population. In the explanatory note, Albanese said that the "highly valued spectrum" is "important for the evolution of mobile networks in Australia".

The announcement also seems to put a halt to requests from emergency service agencies for the remaining spectrum to be given to emergency service organisations for their own dedicated emergency mobile networks. A parliamentary committee report last week recommended that the government hand over the remaining spectrum in the 700MHz band to the agencies, and fund the construction of their networks using some of the AU$1.96 billion gained from the sale of the rest of the spectrum.

A spokesperson for Albanese told ZDNet at the time that the report would be considered as part of a review of emergency network spectrum allocation by the ACMA.

"The committee's recommendations will further inform the work of the ACMA. The government will respond to the committee report after it has received further advice from the ACMA," the spokesperson said.

In Telstra's submission to the draft direction, the company said that emergency service organisations should not receive the spectrum because it would not be harmonised with international spectrum, would be required to meet the broadband requirements of commercial mobile providers, and the existing 800MHz allocation to emergency services would be just as adequate.

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