Government adopts Spectrum Review's recommendations

The federal government has agreed to implement all recommendations of the Department of Communications’ Spectrum Review.

The federal government has announced its response to the Spectrum Review, undertaken by the Department of Communications in conjunction with the Australian Communications and Media Authority. In a joint statement released on 25 August, the Minister for Communications, Malcolm Turnbull, and the Parliamentary Secretary to the Minister, Paul Fletcher, indicated that the government would implement all of the recommendations of the review.

“Spectrum is a critical enabler of Australia's current and future communications infrastructure. However, the legislative framework for managing spectrum in Australia has become outdated," the statement said.

“Implementing the review's recommendations will reduce the regulatory burden on spectrum users by making interactions with the framework, including allocation processes, simpler and faster.

“The framework will be simpler, more efficient, flexible and sustainable to support new and innovative technologies and services while providing certainty of spectrum access rights for users."

Minister for Communications Malcolm Turnbull. Image courtesy CeBIT Australia under CC.

The review of Australia's spectrum policy and management was instigated in May 2014 by the Minister for Communications. The final report was issued early this year.

The review's terms of reference were quite broad, requiring it to consider ways to:

• simplify the regulatory framework to reduce its complexity and impact on spectrum users and administrators, as well as eliminate unnecessary and excessive regulatory provisions;
• improve the flexibility of the framework and its ability to facilitate new and emerging services, including advancements that offer greater potential for efficient spectrum use, while continuing to manage interference and providing certainty for incumbents;
• ensure efficient allocation, ongoing use and management of spectrum, and incentivise its efficient use by all commercial, public and community spectrum users;
• consider institutional arrangements and ensure an appropriate level of ministerial oversight of spectrum policy and management, by identifying appropriate roles for the Minister, the Australian Communications and Media Authority, the Department of Communications and others involved in spectrum management;
• promote consistency across legislation and sectors, including in relation to compliance mechanisms, technical regulation and the planning and licensing of spectrum;
• develop an appropriate framework to consider public interest spectrum issues;
• develop a whole-of-government approach to spectrum policy;
• develop a whole-of-economy approach to valuation of spectrum that includes consideration of the broader economic and social benefits.

What the review found

The report acknowledged that spectrum “is a critical input to a networked and digital economy and society" that “supports a wide range of services that promote economic growth and enhance social wellbeing".

The review found that spectrum's “role as an economic driver, and the value it returns to society, is increasing", quoting figures from a projection of the economic value of spectrum in Australia undertaken by the Centre for International Economics (CIE) that suggest the national benefits could be as much as $177 billion over a 15-year period.

The report also acknowledged that the “current legislative framework for the management of spectrum is over 20 years old". The report's authors added that when the framework was introduced, it was “progressive by international standards in its use of market mechanisms, administrative and commons approaches. However, since its introduction there has been a proliferation of new digital technologies and communications services resulting in significant changes in market structures."

The report's authors recognised the value of contributions from a variety of stakeholders, which enabled them to identify “substantial deficiencies with the current legislative framework", finding that “current spectrum management arrangements are slow, rigid and administratively cumbersome". They cite the example of the reallocation of the digital dividend (694–820 MHz), which took around three years and required 16 legislative instruments to be issued by the Minister or the ACMA. “Spectrum not being allocated quickly and easily imposes unnecessary costs on both industry and government," said the report.

Recommendations

The review came up with three recommendations, which boil down to:

• replacing the current legislative framework with outcomes-focused legislation, which facilitates timely allocations, greater flexibility of use — including through sharing and trading of spectrum — and improved certainty for market participants;
• improving the integrity and consistency of the framework by incorporating the management of broadcasting spectrum and better integrating public sector agencies through the reporting of their spectrum holdings and allowing those agencies to lease, sell or share that spectrum for their own benefit;
• reviewing spectrum pricing arrangements to make these consistent and transparent in order to support efficient use and to facilitate secondary markets.

The government has said that the review recommendations now need to go through a process of detailed legislative and regulatory reform, which the department says will be undertaken in close consultation with stakeholders. The reforms will:

• establish a single licensing system based on the parameters of the licence, including duration and renewal rights;
• clarify the roles and responsibilities of the Minister and the ACMA;
• provide for transparent and timely spectrum allocation and reallocation processes and methods, and allow for allocation and reallocation of encumbered spectrum;
• provide more opportunities for spectrum users to participate in spectrum management, through delegation of functions and user-driven dispute resolution;
• manage broadcasting spectrum in the same way as other spectrum while recognising that the holders of broadcasting licences and the national broadcasters would be provided with certainty of access to spectrum to deliver broadcasting services;
• streamline device supply schemes;
• improve compliance and enforcement by introducing proportionate and graduated enforcement mechanisms for breaches of either the law or licence conditions;
• ensure that the rights of existing licence holders are not diminished in the transition to the new framework.

Enactment of the recommendations will follow the passage of appropriate legislation and will involve ongoing consultation with stakeholders. The department expects this to take some years to complete.

Transition period

The government has said that “the guiding principle for the transition is that the rights of existing licence holders will not be diminished in the transition". The new licensing system is intended to be progressively rolled out from mid-2017, and will provide licensees with the ability to select the option which best suits their needs:

• retaining their current licensing arrangement until expiry; or
• where new arrangements become available earlier, transitioning to new licensing arrangements before the formal expiration of their current licences.

The government also said that those seeking new licences will be issued licences under the old arrangements until the new system is in place and a licence type suitable for their proposed use is available