SpectrumReview

March2015

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ContentsBackground...................................................................................................................4ExecutiveSummary......................................................................................................5Recommendations........................................................................................................71. Introduction.....................................................................................................101.1. Increasingimportanceofspectrum....................................................................101.2. Currentspectrummanagementframework.......................................................101.3. Whatdoesreformlooklike?...............................................................................132. Proposalsforreform........................................................................................152.1. Recommendation1Legislation........................................................................152.2. Recommendation1(a)Singlelicensingsystem................................................172.3. Recommendation1(b)Integratingmanagementofbroadcastingspectrum..202.4. Recommendation1(c)Clarifiedrolesandresponsibilities..............................222.5. Recommendation1(d)Transparentandtimelyallocationprocesses.............252.6. Recommendation1(e)Userinvolvementinspectrummanagement.............272.7. Recommendation1(f)Streamlineddevicesupplyschemes............................292.8. Recommendation1(g)Improvedcomplianceandenforcement.....................312.9. Recommendation1(h)Transitionalarrangements..........................................332.10. Recommendation2Governmentspectrumuse..........................................352.11. Recommendation3Spectrumpricing..........................................................363. Financialimplications.......................................................................................373.1. Singlelicensingsystemimplicationsforchargingandrevenues.....................373.2. Compensation.....................................................................................................373.3. Costsofimplementation.....................................................................................37

4. Implementation...............................................................................................38

AttachmentA.............................................................................................................40Spectrumreviewprocess...............................................................................................40

AttachmentB..............................................................................................................43Currentspectrummanagementframework.................................................................43

AttachmentC..............................................................................................................45Currentspectrumreallocationprocess.........................................................................45

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BackgroundInMay2014theMinisterforCommunications,theHonMalcolmTurnbullMP(theMinister),announcedareviewofAustraliasspectrumpolicyandmanagementframework.TheDepartmentofCommunications(theDepartment),inconjunctionwiththeAustralianCommunicationsandMediaAuthority(theACMA),wastaskedwithundertakingthereview.Adescriptionoftheprocessthatwasundertaken,includingstakeholderconsultation,isatAttachmentA.UndertheTermsofReference,thereviewwastoconsiderwaysto:1. simplifytheframeworktoreduceitscomplexityandimpactonspectrumusersand

administrators,andeliminateunnecessaryandexcessiveregulatoryprovisions2. improvetheflexibilityoftheframeworkanditsabilitytofacilitatenewand

emergingservicesincludingadvancementsthatoffergreaterpotentialforefficientspectrumuse,whilecontinuingtomanageinterferenceandprovidingcertaintyforincumbents

3. ensureefficientallocation,ongoinguseandmanagementofspectrum,andincentiviseitsefficientusebyallcommercial,publicandcommunityspectrumusers

4. considerinstitutionalarrangementsandensureanappropriatelevelofMinisterialoversightofspectrumpolicyandmanagement,byidentifyingappropriaterolesfortheMinister,theAustralianCommunicationsandMediaAuthority,theDepartmentofCommunicationsandothersinvolvedinspectrummanagement

5. promoteconsistencyacrosslegislationandsectors,includinginrelationtocompliancemechanisms,technicalregulationandtheplanningandlicensingofspectrum

6. developanappropriateframeworktoconsiderpublicinterestspectrumissues7. developawholeofgovernmentapproachtospectrumpolicy8. developawholeofeconomyapproachtovaluationofspectrumthatincludes

considerationofthebroadereconomicandsocialbenefits.

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ExecutiveSummarySpectrumisacriticalinputtoanetworkedanddigitaleconomyandsociety.Itsupportsawiderangeofservicesthatpromoteeconomicgrowthandenhancesocialwellbeing.Itsroleasaneconomicdriver,andthevalueitreturnstosociety,isincreasing.AbroadprojectionoftheeconomicvalueofspectruminAustraliaundertakenbytheCentreforInternationalEconomics(CIE)suggestsnationalbenefitscouldbeashighas$177billionovera15yearperiod.1Thecurrentlegislativeframeworkforthemanagementofspectrumisover20yearsold.Whenitwasintroduced,theframeworkwasprogressivebyinternationalstandardsinitsuseofmarketmechanisms,administrativeandcommonsapproaches.However,sinceitsintroductiontherehasbeenaproliferationofnewdigitaltechnologiesandcommunicationsservicesresultinginsignificantchangesinmarketstructures.WiththebenefitofastrongstakeholdercontributiontheDepartmenthasidentifiedsubstantialdeficiencieswiththecurrentlegislativeframework.Thereviewhasfoundthatcurrentspectrummanagementarrangementsareslow,rigidandadministrativelycumbersome.Forexample,reallocatingthedigitaldividend(694820MHz)tookapproximatelythreeyearswith16legislativeinstrumentsbeingissuedbytheMinisterortheACMA.Spectrumnotbeingallocatedquicklyandeasilyimposesunnecessarycostsonbothindustryandgovernment.Thereviewmakesthreerecommendations,thecoreelementsoftheserecommendationsare:

1. replacethecurrentlegislativeframeworkwithoutcomesfocussedlegislation,thatfacilitatestimelyallocations,greaterflexibilityofuse,includingthroughsharingandtradingofspectrum,anddeliversimprovedcertaintyformarketparticipants

2. improvetheintegrityandconsistencyoftheframeworkbyincorporatingthemanagementofbroadcastingspectrumandbetterintegratingpublicsectoragenciesthroughthereportingoftheirspectrumholdingsandallowingthoseagenciestolease,sellorsharethatspectrumfortheirownbenefit

3. reviewspectrumpricingarrangementstomaketheseconsistentandtransparentinordertosupportefficientuseandtofacilitatesecondarymarkets.

Therecommendedlegislationwouldsimplifyregulatorystructures,streamlineregulatoryprocessesandclarifytheroleforGovernmentandtheACMA.Itwouldalsoprovideforgreateruseofmarketmechanismsand,consistentwiththeGovernmentsderegulationagenda,rationalisethenumberoflicencecategories,reformcurrenthighlyprescriptive/lengthyallocationprocessesanddevicesupplyregulations.

1 The economic value of spectrum Research report prepared for the Department of Communications by the Centre for International Economics, January 2015.

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TherecommendednewframeworkwouldmaintaintheGovernmentsroleinensuringtheadequateprovisionofspectrumforkeypublicandcommunityservices.TheGovernmentwouldprovidepolicydirectionandguidancetotheACMAasregulatorandcontinuetomanageAustraliasparticipationininternationalforums.IfthereviewrecommendationsareagreedbytheGovernmentthenthenextstageofthereformprocessisthedevelopmentofdetailedlegislativeandregulatorymeasures,whichwouldbeundertakenincloseconsultationwithstakeholders.Thelegislativereformswould:> establishasinglelicensingsystembasedontheparametersofthelicence,including

durationandrenewalrights> clarifytherolesandresponsibilitiesoftheMinisterandtheACMA> providefortransparentandtimelyspectrumallocationandreallocationprocesses

andmethods,andallowforallocationandreallocationofencumberedspectrum> providemoreopportunitiesforspectrumuserstoparticipateinspectrum

management,throughdelegationoffunctionsanduserdrivendisputeresolution> managebroadcastingspectruminthesamewayasotherspectrumwhilerecognising

thattheholdersofbroadcastinglicencesandthenationalbroadcasterswouldbeprovidedwithcertaintyofaccesstospectrumtodeliverbroadcastingservices

> streamlinedevicesupplyschemes> improvecomplianceandenforcementbyintroducingproportionateandgraduated

enforcementmechanismsforbreachesofeitherthelaworlicenceconditions> ensurethattherightsofexistinglicenceholdersarenotdiminishedinthetransition

tothenewframework.Implementationstageswouldcommencefollowingthepassageoflegislation.Thiswouldagainincludeongoingconsultationwithstakeholdersandprogressoveraperiodofsomeyears.

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Recommendations1. Giventechnologicalchangeandincreasingdemandsforspectrumthecurrent

legislativeframework(theRadiocommunicationsAct1992)shouldbereplacedbyarrangementsthat:

> provideforgreatermarketbasedactivity,includingbyincreasingtheopportunityforspectrumholderstoshareandtradespectrum

> simplifyregulatorystructures,streamlineregulatoryprocessesandclarifytheroleofGovernment.

Thenewlegislativeframework(includingamendmentstorelatedlegislation),whichwouldbedevelopedincloseconsultationwithstakeholders,shouldachievethisby:a) Establishingasinglelicensingsystembasedaroundalimitednumberofparameters

ofthelicence(forexamplefrequencyband,geographicarea,licencedurationandrenewalrightsofthelicence).

b) Integratingthemanagementofbroadcastingspectrum,includingplanning,licensingandpricingintothegeneralspectrummanagementframework,recognisingthatthecurrentholdersofbroadcastinglicencesandthenationalbroadcasterswouldbeprovidedwithcertaintyofaccesstospectrumtodeliverbroadcastingservices.

c) ClarifyingtherolesandresponsibilitiesoftheMinisterandtheACMAundertheframeworkby:i. havingtheMinisterissuepolicystatementsontheGovernmentsstrategyand

prioritiesforspectrumwithwhichtheACMAwouldberequiredtoactconsistently

ii. providingtheMinisterwithpowerstodirecttheACMAonspecificmatters(suchasplanning,allocationandreallocation,licensingandpricing),aswellasageneraldirectionspower

iii. requiringtheACMAtoprovidetotheMinisteranannualworkprogram,preparedinconsultationwithstakeholders,includingkeyprioritiesoverathreetofiveyeartimeframe

iv. requiringtheACMAtonotifytheMinisterofintendeddecisionsonspecifiedissues

v. requiringtheACMAtoimproveandmaintaintherange,availabilityandqualityofinformationavailabletothemarket,supportedbyappropriatepowerstocollectinformationfromindustry.

d) Providingfortransparentandtimelyspectrumallocationandreallocationprocessesandmethodsby:i. removingtheMinisterfrommandatedandroutineinvolvementinallocation

andreallocationprocessesii. authorisingtheACMAtoallocateandreallocatespectrumconsistentwithpolicy

statementsorasoutlinedinitspublishedworkprogramiii. authorisingtheACMAtoallocateandreallocateencumberedspectrum.

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e) Providingmoreopportunitiesforspectrumuserstoparticipateinspectrummanagementby:i. enablingtheACMAtodelegatespectrummanagementfunctionstoother

entitieswhereappropriateii. allowinglicenseestoresolveinterferenceanddisputes,including:

encouraginglicenseestoaccessalternativedisputeresolution requiringtheACMAtodevelopandpublishguidelinesonitsdispute

managementprocesses expandingrightsoflicenseestotakecivilproceedings.

f) Streamliningdevicesupplyschemesby:i. authorisingtheACMAtodeveloptargeteddevicesupplyschemes

commensuratewithriskii. allowingusersofdevicesthatarenotsubjecttoaspecificschemetomanage

theircomplianceobligationsconsistentwithgeneralinterferencemanagementprinciples.

g) Improvingcomplianceandenforcementbyintroducingproportionateandgraduatedenforcementmechanismsforbreachesofthelegislativeframework,including:i. enablingtheACMAtoimposecivilpenalties,issuerecallsorinterimbansand

issueremedialdirectionsandformalwarningsii. applyingstrictliabilityprovisionsandinfringementnoticestoabroaderrangeof

offences.h) Ensuringthattherightsofexistinglicenceholdersarenotdiminishedinthe

transitiontothenewframeworkby:i. providingthatallocationandreallocationprocessesunderwayatthetimethe

newActcomesintoeffectwouldcontinueundertheexistingarrangementsii. allowingexistinglicencestocontinueundertheoldlicensingarrangementsuntil

expiry,whilealsoallowingtheselicencestotransitionearlieratthelicenseesdiscretion

iii. providingcertaintyforcurrentholdersofbroadcastinglicencesandnationalbroadcastersthattheywouldhavecontinuedaccesstospectrumtodeliverbroadcastingservices.

2. RecognisingthathowpublicsectoragenciesaccountforanddealwithassetsisaseparatepolicymatterforGovernment,thefollowingapproachescouldbeconsidered:i. requiringpublicsectoragenciesthatholdspectrumtoregularlyreportthe

valueoftheirholdingsii. permittingagenciestoeitherleaseorsellthespectrumandretainthebenefitof

doingso.3. ThattheDepartmentreviewthearrangementsforpricingofspectrum(including

exemptions,concessions,administrativechargesandtaxes)sothattheseareconsistent,transparentandsupportefficientuseinsecondarymarkets.

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i. ThisreviewwilltakeintoaccountanyrelevantoutcomesoftheReviewofAustralianGovernmentCharging.

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1. IntroductionTheobjectiveofthisreviewistomaximisethepublicbenefitderivedfromspectrum.Thiswouldbeachievedbyimprovingthespectrummanagementframeworksothatnewandexistingusersofspectrumbenefitfrommorecertainandefficientallocationandreallocationofspectrumandhavegreateropportunitiesfortechnologicalandserviceinnovation.1.1. IncreasingimportanceofspectrumSpectrumisacriticalinputtoanetworkedanddigitaleconomyandsociety.Itsupportsawiderangeofservicesthatwealluseandbenefitfromeveryday,andthatpromoteeconomicgrowthandenhancesocialwellbeing.Itsroleasaneconomicdriver,andthevalueitreturnstosociety,isincreasing.AbroadprojectionoftheeconomicvalueofspectruminAustralia,undertakenbytheCIEonbehalfoftheDepartment,suggestsnationalbenefitscouldbeashighas$177billionovera15yearperiod,dependingonthefactorsincluded.2Wirelessservicessupportmoreefficientprocessesanddeliveryofexistingservices,enablingimprovementsinproductivity.TheACMAhasestimatedthatmobilebroadbandincreasedAustraliaseconomicgrowthrateby0.28percenteachyearfrom20072013.Thisequatestoaneconomiccontributionof$33.8billionbymobilebroadbandaloneoverthisperiod,primarilythroughproductivityimprovements.3In2014,anAustralianRadioCommunicationsIndustryAssociationcommissionedstudyshowedthatthespectrumusedforlandmobileradio(alsoknownastwowayradio)generateseconomicbenefitsofbetween$1.99billionand$3.72billionperannum.Landmobileradioplaysacentralroleinthedeliveryofservicessuchasmining,transport,utilitiesandpublicsafetyservicessuchaspolice,fireandambulance.Thecontributionofotherspectrumusingsectorstoeconomicgrowthandproductivityisalsosubstantial.ArecentUSstudyofthevalueofcommonsspectrumfoundthattheapplicationofradiofrequencyidentificationtechnologiesinareassuchasretailingandhealthcarealoneprovidedanestimatedeconomicvalueofUS$130billion.4Theimpactofthesebenefitsaresubstantial.Equally,thepotentialcostsofspectrumnotbeingfullyandefficientlyutilisedaresignificant.1.2. CurrentspectrummanagementframeworkThespectrummanagementframeworkissetoutintheRadiocommunicationsAct1992(theRadiocommunicationsAct),relatedlegislationandsubordinateregulation.2 The economic value of spectrum Research report prepared for the Department of Communications by the Centre for International Economics, January 2015. 3 The economic impacts of mobile broadband on the Australian economy from 2006 to 2013 Research report prepared for the ACMA by the Centre for International Economics, April 2014. http://engage.acma.gov.au/wp-content/uploads/2014/04/Economic-impacts-of-mobile-broadband_Final2.pdf 4 Assessment of the economic value of unlicensed spectrum in the United States, authored by Raul Katz for Telecom Advisory Services, February 2014. http://www.wififorward.org/wp-content/uploads/2014/01/Value-of-Unlicensed-Spectrum-to-the-US-Economy-Full-Report.pdf

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Theexistinglegislativeframework,summarisedatAttachmentB,isover20yearsold.Whenintroduced,theframeworkwasprogressivebyinternationalstandardsinitsuseofmarketmechanismsanditsmixedapproachtospectrummanagement(useofmarket,administrative,commonsapproaches).Thelicensingsystemhasaccommodatedarangeofnewtechnologiesandservices,andarrangementshaveallowedspectrumtobeallocatedandreallocatedtonewuses.Thereareanumberofareaswherethecurrentarrangementscouldbesignificantlyimprovedtothebenefitofexistingandnewusersofspectrum.Feedbackfromstakeholders,supportedbytheDepartmentsassessment,hasidentifiedthat:> licensingofspectrumistoocomplexandrigidtoefficientlyaccommodatenew

technologiesandstakeholdersevolvingandincreasingspectrumneeds> allocationandreallocationofspectrumtakestoolonganddecisionslack

transparencyandconsistencyespeciallywhenweighingupcommercialandnoncommercialusesforexamplereallocatingthedigitaldividend(694820MHz)tookapproximatelythreeyearswith16legislativeinstrumentsbeingissuedbytheMinisterortheACMA

> thereistoomuchuncertaintyaroundspectrumaccessandrenewal,impactingoninvestoranduserconfidence.Forexampleittooknearlytwoyearsforgovernmenttoassessthatreissuingthe15yearspectrumlicenceswouldbeinthepublicinterest.FollowingthisdecisiontheACMAthenhadtoassesswhetherthelicenceshadbeenusedoverthelicenceperiodbeforetheycouldreissuethelicences

> stakeholdersarenotclearonthedifferent(andappropriate)responsibilitiesoftheMinister,theDepartmentandtheACMA

> pricingofspectrumdoesnotalwaysreflectitsvalue,changesinvalueovertimeorthebenefitspectrumprovidestosociety;andtherationaleforpricingdiscountslackclarity

> marketbasedactivityspecificallytradingorleasingspectrumwhileavailable,isnotbeingmadeuseofextensively

> technicalregulationistoodetailedandadministrativelyburdensome> complianceandenforcementarrangementsdonotprovideusersandtheregulator

withtherightsetoftools.Muchoftheadministrativecomplexityistheresultofchecksandbalancesincludedintheframeworkwhenitwasfirstestablished,whichcanbesignificantlystreamlined.Otherimpedimentsarisebecausetechnologyhassubstantiallychangedandasaconsequencespectrumcanbeputtofargreateruseanddeliverawidervarietyofservicesthanwhatwascontemplatedwhentheframeworkwasdevelopedin1992.ThechallengeofincreasingdemandforspectrumAscommunicationsserviceprovidersandothersectorsoftheeconomyintegrateandbetterexploitdigitaltechnologiesintotheiroperationsthevalueofspectrumanditsfuturepotentialisbecomingmoreevidenttoagreaterrangeofstakeholders.

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Consumersareseekingondemandaccesstoanincreasingrangeofcommunications,informationandentertainmentservices.Governmentuserssuchasdefenceandfirstresponders(police,fireandambulance)wanttoimprovetheirexistingcapabilitiesbytakingadvantageofnewtechnologiessuchasmobilebroadband.Newspectrumbasedtechnologiesandservicesareemerging,includingmachinetomachinecommunicationsandservicesbasedoncognitiveradiotechnologies.Thereissignificantdemandforawiderangeofcurrentusesofspectrumsuchasmaritimeandaviationsafetyandcommunications,scientificresearchandmonitoring,satellitecommunicationsandradioandtelevisionbroadcastingwhichneedtocontinuetobeaccommodated.Mobilebroadbandinparticularisdrivingincreasingspectrumdemand.In2014,theInternationalTelecommunicationUnion(RadiocommunicationSector)estimatedthatanadditional1,340to1,960MHzofspectrumwouldberequiredformobilebroadbandby2020.5InAustralia,theACMAestimatesmobiledatausagetogrowby265percentoverafouryearperiodto2017,increasingfromanestimated22.2petabytesin2013to81.1petabytesin2017.6Vacantspectrumtomeetthisdemandisbecominghardertofind.Internationally,thereisafocusonenablinggreaterspectrumsharingbytakingadvantageofsmarttechnologiesthatcanlookupdatabasestofindunusedspectrumandswitchtotheunusedfrequenciesinrealtime(thesearevariouslycalleddynamicspectrumaccess,cognitiveorwhitespacetechnologies).Whileinitiallybeingimplementedintheunusedspectruminthebroadcastingbands,theycanpotentiallybeusedthroughoutthespectrumbands.Australiasexperienceaccordswithwhatishappeningoverseas,whereincreasingdemandformobilebroadbandisdrawingresponsesfromgovernments.IdentificationofspectrumtosupportfuturemobiletelecommunicationsisexpectedakeyfocusoftheNovember2015WorldRadiocommunicationConference(WRC).InthelastfiveyearstheUnitedKingdom(UK)7,UnitedStates(US)8andCanada9havecommittedtomakingadditionalspectrumavailableformobilebroadband,throughdirectallocationsandspectrumsharing.AccordingtotheUSDefenseSpectrumOrganization,theUSDefenseDepartmentislookingatsharingspectrumwithcommercialuserswiththehelpofnewtechnologies

5 Future spectrum requirements estimate for terrestrial IMT M Series Mobile, radiodetermination, amateur and related satellite services, ITU-R, 2014, http://www.itu.int/dms_pub/itu-r/opb/rep/R-REP-M.2290-2014-PDF-E.pdf 6 The economic impacts of mobile broadband on the Australian economy from 2006 to 2013 Research report prepared for the ACMA by the Centre for International Economics, April 2014. http://www.acma.gov.au/theACMA/Library/researchacma/Research-reports/economic-impacts-of-mobile-broadband-1 7 In 2011 the UK announced its intention to release 500 MHz of government spectrum below 5 GHz for commercial mobile services by 2020. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/77429/Spectrum_Release.pdf 8 In 2010, the US announced it would make 500 MHz of federal and non-federal spectrum available for wireless broadband use within 10 years. http://www.broadband.gov/plan/5-spectrum/ 9 In late 2014, Canada announced measures to release 60 percent more spectrum (above that available at the beginning of 2014) for mobile broadband by May 2015. http://www.ic.gc.ca/eic/site/ic-gc.nsf/eng/07389.html

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thatenablenearrealtimefrequencymanagement.ThegoalistoenabletheoperationalneedsofbothcommercialandGovernmentuserstobemet.10Thereviewassessmentisthataspectsofthecurrentframeworkaretooslow,rigidandadministrativelycumbersometoenablespectrumtobeallocatedandusedquicklyandeasily.Currentarrangementscanbesimplifiedandmademoreflexibletoefficientlyaccommodatenewtechnologiesandstakeholdersevolvingandincreasingspectrumneeds.1.3. Whatdoesreformlooklike?Thedevelopmentofthereformswasguidedbytheprinciplesof:> transparencyprovidingaclearandtransparentpolicyframeworkanddirection,

withintheboundsofwhichtheACMAshouldhavebroaddiscretionovertheoptionsavailabletoittomanagethespectrumandenableagreaterroleforusers

> efficiencypromotingefficientallocationanduseofspectrumbymakinguseofmarketprinciplesandmechanismsasthepreferredapproachandprovidinglicenseeswiththefreedomandincentivestomakeoptimalchoicesabouttheirspectrumuse

> flexibilityensuringarrangementsareasflexibleaspossibletopromotechoiceandinnovation

> certaintyprovidingconfidenceaboutregulatoryarrangementsandspectrumaccesstermsandconditionsandpromoteinternationalharmonisationinAustraliasinterests

> simplicitycreatingaframeworkthatissimpler,easiertounderstandandusestheleastcostregulationrequiredtoachievetheobjective.

Theproposedreformapproachistorestructureandrationalisethelegislativeframeworkto:> provideforgreatermarketbasedactivity> simplifyregulatorystructures,streamlineregulatoryprocessesandclarifytherolefor

Government.ConsistentwiththeGovernmentsderegulationagenda,afocusoftheproposedreformsistorationalisethenumberoflicencecategoriesandassociatedsubordinateregulationandtoremoveunnecessaryregulationparticularlyrelatingtohighlyprescriptiveandlengthyallocationandreallocationprocesses.Areaswhereadditionalregulationisproposed,suchasthetargeteddirectionspowersfortheMinisterandanexpandedcomplianceandenforcementtoolkit,wouldbenefitspectrumusersthroughimprovingcertaintyandtimelinessofdecisionmakingprocesses,anddelivermoreeffectivecomplianceactivities.ThereremainsanimportantroleforGovernmentinspectrummanagement.ThereformsmaintainGovernmentsroleinestablishingthespectrummanagementframework,includingsettingthegroundrulesformarkettransactions,enforcecompliance,ensuring10 http://www.defense.gov/news/newsarticle.aspx?id=120052 & http://fedscoop.com/disa-spectrum-forecast-to-industry/

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thereremainsadequateprovisionofspectrumforpublicandcommunityservicesandinmanagingAustraliasparticipationininternationalforumsandarrangements.Giventheinherentcostsandinefficienciesinbothgovernmentsandmarketstryingtojointlycoordinateeconomicactivity,thereformsprovideagreateropportunityforGovernmenttoestablishandpromotethenecessaryconditionsformarketbasedactivityupfrontwithaviewtolimitingtheextenttowhichfurtherdirectinterventionsarenecessary.NotingthatGovernmentwouldretaintherighttointerveneinspecificspectrummanagementmatterstoachievepolicypriorities.Marketmechanismsplayavaluableroleinallocatingspectrumefficiently,placingadisciplineonmarketparticipantsandprovidingopportunitiestotradeorleasespectrum.Thisencouragesefficientuseandoffersusersgreaterflexibilityinthewaytheyacquireandmanagetheirspectrum,andmaximisesitsvalue.However,theuniquefeaturesofspectrumsuchasitspropagationcharacteristics,theconstraintsimposedbytechnologyandtheinternationalplanningframework,limittheextenttowhichspectrumcanbefullycommoditised.Agoodexampleisaeronauticalspectrumwhich,throughinternationalagreements,meansthespectrumisnoteasilysubstitutableforotheruses.TheDepartmentcommissionedworkfromtheCIEtodevelopatheoreticalmarketbasedmodelforspectrummanagement,totesthowsuchaframeworkwouldoperate.11Themodeloutlinesamarketsystembasedonthepropertyrightsofspectrum,whereallspectrumiscompetitivelyallocatedandheldaslongterm(possiblyperpetual)licenceswithparameterssettingconditionsofuse.Userswouldhavethefreedomtotradeorleasespectrum.Therewouldbecarveoutsfromthisframeworkforpubliccommonsuseandservicessubjecttointernationalagreements(suchasaeronautical,maritimeandsatellites).TheroleoftheGovernmentwouldbetoestablishmarketrules,upholdtherightsandresponsibilitiesofusers,andprovidemediationininterferencedisputesshouldnegotiationsnotbesuccessful.TheCIEapproachwaspresentedtoastakeholderworkshopinJanuary2015.Whilsttherewasinterestintheissuesraisedtherewasnotgeneralsupportexpressedforitsadoption.ThisreviewdoesnotrecommendcompleteadoptionoftheCIEproposedmodel,althoughanumberofthespecificmeasures,particularlyinrelationtoasimplifiedlicensingsystem,theprovisionofhigherqualityinformationandmeasurestoimprovesecondarytradingtomarketparticipantsaligncloselywiththeproposedreforms.

11Maximising market involvement in spectrum management Research conducted for the Department of Communications by the Centre for International Economics, February 2015.

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2. Proposalsforreform2.1. Recommendation1LegislationGiventechnologicalchangeandincreasingdemandsforspectrumthecurrentlegislativeframework(theRadiocommunicationsAct1992)shouldbereplacedbyarrangementsthat:> provideforgreatermarketbasedactivity,includingbyincreasingtheopportunityfor

spectrumholderstoshareandtradespectrum> simplifyregulatorystructures,streamlineregulatoryprocessesandclarifytheroleof

Government.RationaleforreformTheincreasingvalueofspectrumtotheeconomyandsociety,rapidtechnologicalchangeandincreasingdemandforspectrumareimpactingontheeffectivenessoftheexistingregulatoryframework.WhiletheRadiocommunicationsActhasbeenabletoaccommodatethesedevelopmentstodate,asimplerandmoreflexibleframeworkisdesirable.Inparticularthecurrentframeworkishighlyprescriptiveaboutprocessratherthanfocussedonoutcomes.ProposalThecentralrecommendationofthisreviewistoreplacetheRadiocommunicationsActwithanewActthatisstreamlined,consistentandoutcomesfocussed.Reformingthecurrenttripartitelicensingframework,intoasinglelicensingsystemwouldsupporttheseobjectives.Whilethecurrentframeworkisprescriptiveaboutprocesses,thenewActwouldfocusontheoutcomesthatshouldbeachievedthroughspectrummanagement.ThiswouldgiveusersandtheACMAgreaterflexibilityindecidinghowtomeettheoutcomesandrulessetoutinlegislation.ThenewActwouldsetoutahighlevelframeworkwithoperationaldetailcontainedinsubordinateregulation.SpectrumusersandtheACMAwouldhaveincreaseddiscretionwhenoperationalisingtheframeworktobettermeetchangingmarketcircumstances,withinaframeworkoflegislativeobjectivesandprinciplesandMinisterialpolicyoversight.TheexpectationisthattheACMAwould,incloseconsultationwithstakeholders,developsubordinateregulationinawaythatappropriatelylimitsitsproliferationandminimisestheregulatoryburden.TheobjectsoftheActwouldbereviewedduringthedevelopmentofthedetailedlegislativearrangementstomakesuretheyareappropriateforthenewframework,includingencouragingefficiency,innovationandcertaintyofinvestmentandensuringregulationdoesnotoverlyconstrainspectrumuseandreuse.Theobjectiveofprovidingadequateprovisionforpublicandcommunityserviceswouldberetained.ThenewActwouldalsobereorderedtoprovideaclearandlogicalstructurethatiseasierforspectrumuserstonavigate.

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Detailaroundhowthisframeworkwouldworkissetoutinthediscussionofrecommendations1(a)(h)below.

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2.2. Recommendation1(a)SinglelicensingsystemEstablishingasinglelicensingsystembasedaroundalimitednumberofparametersofthelicence(forexamplefrequencyband,geographicarea,licencedurationandrenewalrightsofthelicence).RationaleforreformThelicensingsystemneedstobemadesimplerandmoreflexible.TherigidboundariesbetweenthethreelicencetypesandtheprescriptiverightsthatapplyintheRadiocommunicationsActhavelimitedtheACMAsabilitytodesignlicencesthatmeetusersneeds.Someelementsofcurrentlicencedesign,forexamplethelackofcertaintyaroundlicencetenureandthelimitedhomogeneityoflicences,mayactasabarriertosecondarytrading.TheRadiocommunicationsActcontainsover180pagesofrulesrelatingtothethreelicencetypes.Conversionand/orreallocationfromapparatustospectrumlicencesarecomplicatedandlengthyprocesses.Therightsgrantedunderlicensesvaryconsiderablydependingonwhetheranapparatusorspectrumlicencehasbeenissued,yetoftentheuseandgeographicalareasthatapplytothelicencearethesame.AreformedlicensingsystemwouldbetterpositionuserstointeractearlyandconstructivelywiththeACMAtoconfigurelicencesthatcanaccommodatechangesintechnologyandimprovetheircapacitytoengageinsecondarytrading.Itwouldalsoprovidelicenseeswithgreaterclarityaslicenceparametersandrightswouldpredominantlybeprovidedforwithinalicence,ratherthanmostlyresidingindifferentpartsoftheRadiocommunicationsAct.Thisisoneofthekeyderegulatoryreformproposals.Itwouldsimplifythelicensingsystem,reducingthenumberoflicencetypesandassociatedsubordinateinstruments.ProposalThisreformwouldbethecentrepieceofanewspectrummanagementframework.Theintentionistoestablishasinglelicensingsystemtoreplacethecurrenttripartitelicensingsystem.TheprimarylegislationwouldprescribecoreparameterswhichmustbeincludedinalicencebutenablethedetailregardingtheseparameterstobedevelopedbytheACMAinconsultationwithusers,andsetoutinsubordinateinstruments.TheMinisterwouldhaveadirectionandoversightrole,implementedthroughpolicystatementsanddirectionspowersassetoutinrecommendation1(c).TheexpectationisthattheMinisterwouldissueapolicystatementtoguidedevelopmentofthenewlicensingsystem,includingprinciplesfortheACMAtofollowinsettingupthelicensingsystemandtheapproachtorenewaloflicences.Likelycoreparameterswouldinclude:> frequency> geographiclocation

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> duration> whetherthelicenceissubjecttorenewal,andconditionswhentheACMAwouldnot

renew> termsforvaryingand/orrevokinglicences> paymentmechanismandamount.TheDepartmentspreferredapproachistominimisethelistofcoreelementsandnotundulyrestrictthecapacityoftheACMAtotailorarrangementstobestsuitdifferentusers.Aswiththecurrentarrangements,theACMAwouldretaintheabilitytoincludeotherparametersandconditionsconsistentwiththeMinistersoverarchingpolicydirection,forexample,thoserelatingtosharing/exclusiveuseoflicences,thirdpartyuseandregistrationofdevices.ItisanticipatedthattheACMAwoulddevelopanumberofstandardlicenceoptionswithstandardparameters.Thesewouldlikelyincludeoptionsbroadlyequivalenttothelicencetypesinthecurrentlegislation.Stakeholderswantamoreflexiblesystembutalsowantcertaintyinrelationtosomerights,particularlyrenewalrights.Tobalancetheseneeds,theDepartmentspreferredapproachisfortheMinistertoissueapolicystatementprovidingguidanceonrenewal.TheACMAwouldthendevelopanumberofrenewaloptions,includingrenewalprocessesandmethodsfordeterminingprice,andincorporateintotherelevantlicencetherenewaltermsmostsuitableforthatlicence.Thereformdirectionspaperproposedprescribinginthelegislationamaximumlicenceduration,andthatitbefor15years.Somestakeholdershaveadvocatedforalongerdurationorfortheretobenocapinthelegislation.Thisisadifficultissuebecausewhilsttherearebenefitstoextendingthemaximumterm(providingusersofspectrumwithgreatercertaintytoinnovateandinvestwhilstsupportingthedevelopmentofsecondarymarkets),therearealsorisksintermsofreducinggovernmentflexibilityascircumstanceschange.Onbalance,theDepartmentsuggeststhattheprimarylegislationshouldcontinuetospecifyamaximumdurationforlicenses,butthatthedurationbeextendedto20years.AccommodatingclasslicensinginthesinglelicensingsystemTherehasbeensomesupportfromstakeholdersforkeepingclasslicencesseparatefromthesinglelicensingsystem,particularlygiventhelimitednatureofclasslicenseerightsascomparedtothosethatapplytoapparatusorspectrumlicences.Thefollowingoptionshavebeenconsideredinprovidingforcommonsuseofspectrumunderthereformedframework:> mergingapparatusandspectrumlicencesbutretainingclasslicencesasaseparate

licencecategory> excludingclasslicencesfromthesinglelicensingsystembutprovidingforunlicensed

spectrumusethiswouldbeusedtoaccommodatelowpowerorlocalisedapplicationsthatrequirelessprotectionoroversight

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> incorporatingclasslicencesfullyintothesinglelicensingsystem.AcommonsformofregulateduseofspectrumexistsinmostinternationalspectrummanagementframeworksandshouldcontinuetobeprovidedinAustralia.Thisallowsoperationofcertainservicesanddevicesusingcommonfrequenciesonasharedbasiswithnorighttointerferenceprotection.Rulesfortheuseofcommonsspectrumarerequiredtomanagetheriskofinterference(andsonotdiminishtherightsofotherusers)andaddresshealthrelatedconcernsarisingfromelectromagneticemissions.Unlicensedorlicenceexemptspectrumusedoesnotequatetoitbeingunregulated.Consistentwithcurrentclasslicensingarrangementsandotherinternationalframeworks,theDepartmentproposesthattherulesregardingcommonsuseofspectrumbespecifiedinsubordinatelegislationratherthanthroughprimarylegislation.ThequestiontobeexaminedduringthecourseofdevelopingthenewActiswhetheritisbesttoincorporatecommonsregulationthroughlicensingorbyseparateauthorisation.Bothoftheseapproachescanbeaccommodatedundertheumbrellaofasinglelicensingsystem.ConsolidatepricingandtaxationarrangementsThepricingandtaxationarrangementsforlicenceswouldneedtobeconsolidatedaspartofthemovetoasinglelicensingsystem.Thepaymentstructuresandtaxationarrangementsbetweenthelicensingtypescurrentlydiffer.Spectrumlicencesaresubjecttocostrecoverycharges,spectrumaccesschargesandaspectrumlicencetax.Apparatuslicenceshaveacostrecoverychargeplusalicencetaxwhichdiffersdependingonwhetheritisareceiverortransmitterlicence.ThesefeearrangementsaresourcedfromfivedifferentActsaswellassubordinateregulation.Classlicenceshavenofees.ItisproposedtoretainthecurrentflexibilityfortheACMAtosetprices,andthetimingandstructureofpayments,withtheMinistersimilarlyretainingthepowertodirecttheACMAonthesematters.Iftherecommendationsofthisreviewareacceptedthentheintentionwouldbetoundertakefurtherworktoreviewpricingarrangementsforspectrumtoensurethesearesuitableforthenewlicensingsystem(seerecommendation3).

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2.3. Recommendation1(b)Integratingmanagementofbroadcastingspectrum

Integratingthemanagementofbroadcastingspectrum,includingplanning,licensingandpricingintothegeneralspectrummanagementframework,recognisingthatthecurrentholdersofbroadcastinglicencesandthenationalbroadcasterswouldbeprovidedwithcertaintyofaccesstospectrumtodeliverbroadcastingservices.RationaleforreformTheobjectiveistoprovidegreaterflexibilityforbroadcasterstomanagetheirserviceswithintheirspectrumholdings,improvethetradabilityofspectrumandtopromoteefficiencyandconsistencyinspectrummanagementacrossdifferentplatforms.Historically,theplanning,allocation,licensingandpricingofbroadcastingservicesbandspectrumhasbeenconducteddifferentlyfromspectrumforotheruses.Thiswasputinplacetoaccommodatetheuniquerequirementsofbroadcastingservices,includingcontentandrelatedpublicinterestobligations,tomanagecoverageandreceptionofservices,andtoallowaregulatedprocesstodeterminethenumberandcharacteristicsoftelevisionandradioservicesgiventheiruniqueroleinsociety.AsidentifiedintheDepartmentsDigitalTelevisionRegulationConsultationPaper(January2015)technologicaldevelopmentsandincreasingcompetitionforcontentserviceswillrequirebroadcasterstocontinuetoinnovate.Inthisenvironmentitisimportantthatbroadcastersabilitytooffernewservicesandmanagetheircosts,throughtheuseofmorespectrallyefficienttechnologiesand/orsharedinfrastructurearenotconstrained.ProposalItisproposedthatovertimebroadcasterswouldtransitiontothenewarrangementsonthesamebasisasotherapparatuslicenseessothatthesamebroadandflexiblespectrumprocesseswouldbeappliedtouseofbroadcastingservicesbands.Underanewframeworkbroadcasterswouldhavegreateropportunitytomanagetheirownservicearrangementswithintheircurrentchannels,orincollaborationwithotherbroadcastersorprovidersofcontent.Subjecttothetermsofthelicencetherewouldalsobescopeforbroadcasterstradingspectrumforalternateuses.ArangeofregulatoryandotherissuesassociatedwiththeseproposalsarecanvassedintheDigitalTelevisionRegulationConsultationPaper.Thetransitiontoanynewarrangementwouldrequireconsiderationofarangeofpolicy,regulatoryandtechnicalissues,includingspectrumpricingandlicencetenure,andthelinkbetweenspectrumallocationandpublicinterestobligationsonbroadcasters.Theallocationofbroadcastingandapparatuslicencestofreetoairbroadcastersiscurrentlylinked,andtechnicalandinterferenceconsiderationsarelikelytomeanthatuseofanysparespectrumfornonbroadcastingpurposeswouldrequiresubstantialreplanning.TheGovernmentwouldneedtoworkcloselywiththebroadcasterstomanageanytransitioninawaywhichisconsistentwithcommitmentstoensurethattelevisionand

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radiooperatorscontinuetohaveaccesstoadequatespectrumfortheirservices,andwhichiscognisantoftheneedtomanageimpactsonthepublicwhousebroadcastingservices.ThepricingarrangementsforbroadcastersspectrumlicenceswouldbeconsideredbytheGovernmentthroughtheproposedreviewatrecommendation3andwouldalsotakeintoaccountthepricingarrangementsthatapplytobroadcastersseparatebroadcastingservicelicences.

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2.4. Recommendation1(c)ClarifiedrolesandresponsibilitiesClarifyingtherolesandresponsibilitiesoftheMinisterandtheACMAundertheframeworkby:

i. havingtheMinisterissuepolicystatementsontheGovernmentsstrategyandprioritiesforspectrumwithwhichtheACMAwouldberequiredtoactconsistently

ii. providingtheMinisterwithpowerstodirecttheACMAonspecificmatters(suchasplanning,allocationandreallocation,licensingandpricing),aswellasageneraldirectionspower

iii. requiringtheACMAtoprovidetotheMinisteranannualworkprogram,preparedinconsultationwithstakeholders,includingkeyprioritiesoverathreetofiveyeartimeframe

iv. requiringtheACMAtonotifytheMinisterofintendeddecisionsonspecifiedissues

v. requiringtheACMAtoimproveandmaintaintherange,availabilityandqualityofinformationavailabletothemarket,supportedbyappropriatepowerstocollectinformationfromindustry.

RationaleforreformThepolicyframeworkThekeymethodofMinisterialinterventioninthecurrentframeworkisthegeneraldirectionspowerintheAustralianCommunicationsandMediaAuthorityAct2005(ACMAAct).ThepowersofMinisterialinterventionundertheRadiocommunicationsActareforthemostpartprocessdriven,ratherthanleversforstrategicpolicyintervention.Forclarityandtransparency,policyareaswheretheMinisterwouldwanttodirectlyinterveneinspectrummanagementshouldbeidentified.Stakeholderswantgreatertransparencyandaccountabilityindecisionmaking,andacleardistinctiontobemadebetweentheresponsibilitiesoftheMinister/GovernmenttosetpolicyandtheACMAtoimplementpolicy.Thisincludestransparentdisclosureofdecisionsandthereasoningbehinddecisions,regularupdatesonprocessesandexplanationswhenthingschange.Stakeholdersarealsoseekingclearguidanceonfuturespectrumpolicyandmanagementpriorities.Theproposedreformstothepolicyframeworkwouldsignificantlyimprovedecisionmakingandmakethismoretransparentandaccountable.TheproposedreformswouldallowtheMinistertointerveneinastrategicwayandtoprovidepolicyguidance;andprovidegreaterclarityforusersonroles,spectrummanagementprioritiesandtheACMAsactivities.Essentiallytheapproachrecommendedinthisreviewaimstoimprovethearrangementsfortransparentgovernmentpolicysetting,whilstreducingMinisterialinvolvementinACMAprocesssteps.MakinginformationavailabletosupportthespectrummarketEfficientspectrummanagementandmarkettransactionsrelyoninformationonwhatspectrumisavailable,where,underwhatconditions,andthepricespaid.This

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informationisnotalwaysaccessibletousersandinsomecasestheACMAmaynothavethepowertocollectrelevantinformation.Morereadilyavailableinformationwouldreducetransactioncosts,aidpricedisclosureandsupportspectrumsharing,secondarytradingandnewmarketentry.ProposalThepolicyframeworkTheseproposedreformsareintendedtoprovidethekeymechanismforguidingtheACMAsdiscretion,makingmajorallocationandreallocationdecisionsthatinvolvecompetingusesandundertakingexceptionbasedinterventionsonbehalfofnoncommercialusers.Decisionsneedtobebasedongoodinformation,includingontheeconomicimplicationsofchoices.TheMinistersdecisionmakingwouldbeguidedbytheObjectsofthenewActandanyotherprinciplessetoutintheprimarylegislation.TheMinisterwouldissuepolicystatementssettingoutthegovernmentspolicygoalsforspectrummanagement,orfocussingonaparticularissueorpolicyinitiative.TheACMAwouldberequiredtoactconsistentlywithpolicystatements.Policystatementswouldbeoflimitedornosetdurationandcouldbeupdatedorwithdrawnasneeded.Statementswouldinitiallyguideimplementationofkeyelementsofthenewframework,forexample,thesinglelicensingsystem.TheMinisterwouldalsobeprovidedwithanexpandedrangeofspecificdirectionspowers,allowinginterventioninmostaspectsofthespectrummanagementframework.Examplesofnewdirectionspowersincludetoreservespectrumforparticularpurposes,allocatespectrum,overrideastandardlicensingoptionestablishedbytheACMA,and(asiscurrentlythecase)tosetcompetitionlimitsandspectrumprices.Daytodaymanagementofspectrum,consistentwithgovernmentpolicy,wouldbetheresponsibilityoftheACMA.Itisanticipatedthat,havingsetthepolicydirection,Ministerialinterventionusingspecificdirectionspowerswouldbeonanexceptionbasis.IftheMinisterweretointervene,policystatementsanddirectionswouldbemadepublic,consistentwithcurrentpractice.TheACMAActgeneraldirectionspowerwouldcontinuetobeavailabletotheMinistertodirecttheACMAontheexerciseofitsspectrummanagementpowersandfunctions.TheACMAannualworkprogramwouldclearlysetouttheACMAsprioritiesspecifictospectrum,howthesewouldbeimplementedandtiming.TheACMAwouldusetheworkprogramtoreportimplementationprogressandchangestopriorities.WhenpreparingitsannualworkprogramtheACMAwouldconsultwithstakeholdersonitscontentsbeforeprovidingittotheMinister.TheMinisterwouldhavetheabilitytorequireamendmentstotheworkprogram,requestadditionalinformationandindicateissuesofinterestorwhereMinisterialinterventionmayberequired.Theannualworkprogramwouldbeapublicdocument.TheACMAwouldberequiredtonotifytheMinisterofupcomingmajoractivitiesanddecisions,toprovidetheMinisterwithsufficientopportunitytoassesspolicy

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implicationsandintervenewherenecessary.Thesenotificationswoulddiscusspotentialimpacts,sensitivitiesandrisksandwouldnotberequiredtobemadepublic.MakinginformationavailabletosupportthespectrummarketAspartofitsannualworkprogram,theACMAwouldberequiredtoidentifytheinformationneededtosupportspectrummanagementandthespectrummarketunderthenewframework,followingopendataprinciples.Thiswouldincludemakinginformationthatitroutinelycollectsasaccessible,uptodateandinteractiveaspossible;andassessingtheabilityoftheACMAscurrentlicensingdatabasetomeetuserneeds.TheACMAwouldmakerecommendations,provideanimplementationplanandreportonprogress.Inmakinginformationavailable,theACMAwoulddosoinawaythatenablesthirdpartiestobecomeinvolvedininformationprovisionandinprovidingservicestothemarketbasedontheACMAinformation,forexample,databasestosupportdynamicspectrumaccessorspectrumtradingintermediaries.ThereformdirectionspaperproposedthattheACMAbegivenageneralinformationgatheringpowerundertheActsimilartothatcurrentlyprovidedundertheTelecommunicationsAct1997.Whilestakeholderssupporthighqualityinformationbeingmadeavailable,theydonotsupportabroadinformationgatheringpowerfortheACMAduetothepotentialadministrativeburdenofinformationrequests.Instead,itisproposedtoprovidetheACMAwithaninformationgatheringpowerbutlimitthepowertoonlytargettheinformationgapsnecessarytosupportACMAsspectrummanagementfunctions.

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2.5. Recommendation1(d)TransparentandtimelyallocationprocessesProvidingfortransparentandtimelyspectrumallocationandreallocationprocessesandmethodsby:

i. removingtheMinisterfrommandatedandroutineinvolvementinallocationandreallocationprocesses

ii. authorisingtheACMAtoallocateandreallocatespectrumconsistentwithpolicystatementsorasoutlinedinitspublishedworkprogram

iii. authorisingtheACMAtoallocateandreallocateencumberedspectrum.RationaleforreformAllocationandreallocationprocessesneedtobemadeconsistent,lessprescriptiveandcomplex,whilecontinuingtomeettheobjectivesof:> maximisingthepublicbenefitthroughefficientallocationanduse> providingareturnfortheuseofapublicresource.Thecurrentconversionandreallocationprocessesarehighlyprescriptive,inefficientandrequireinterventionbytheMinisterinroutineprocesseswhichreducestheefficiencyandflexibilityoftheframework.Forexample,reallocatingthedigitaldividend(694820MHz)tookapproximatelythreeyearswith16legislativeinstrumentsbeingissuedbytheMinisterortheACMA.AttachmentCillustratesthestepsandinstrumentsrequiredtoreallocatespectrumunderthecurrentframework.Stakeholdershavehighlightedtheneedforfaster,simplerandlesscostlyallocationandreallocationprocesses.ProposalUnderasinglelicensingsystem,allocationandreallocationprocesseswouldbestreamlinedandmadeconsistent,reducingtheregulatoryburden.Arrangementswouldbalancestakeholdersneedfortransparencyandcertaintywiththeflexibilitytochangespectrumusewhenitisinthepublicinteresttodoso.PlanningallocationandreallocationprocessesTheACMAwouldberequiredtoidentifyplannedallocationandreallocationprocessesthroughitsannualworkprogram.Thiswouldfacilitateearlyengagementwithstakeholders.WhiletheMinisterwouldhavepowerstodirecttheACMAinrelationtothehighleveloutcomesoftheseprocesses,therewouldnolongerbemandatedMinisterialinvolvementintheroutineprocessesassociatedwithallocationandreallocation.TheACMAwouldbeabletoundertakeallocationandreallocationactivitieswheretheseareconsistentwiththeMinisterialpolicystatementoroutlinedinitsworkprogram.Intheinterestsofprovidinglicenseeswithassuranceabouttenure,theACMAwouldspecifytheprocessesgoverningvariationorrevocationoflicencesasalicenceparameteratthetimeofissue.Additionally,theACMAwouldbeexpectedtomanage

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futurevariationorreallocationprocessesbyissuinglicencesofappropriatedurationstoaccommodateplannedreallocationsofparticularbands.AllocationandreallocationprocessesTheACMAwouldberequiredtodetermineallocationandreallocationproceduresinwriting,includingtimingoftheseprocesses.TheACMAwouldhavethediscretiontodeterminetheappropriateallocationorreallocationmechanismsuchasauctions,tendersoradministrativemechanisms.TheACMAwouldhavetheauthoritytoallocateorreallocatespectrumthatisencumbered,toprovidegreaterflexibilityforbothexistingandfuturespectrumusers,facilitateprivatebandmanagementandencouragemoreefficientandintensivespectrumuse.Allocatingandreallocatingencumberedspectrumwouldneedtotakeintoaccountincumbentsexistingrightsandlicencedurations.

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2.6. Recommendation1(e)UserinvolvementinspectrummanagementProvidingmoreopportunitiesforspectrumuserstoparticipateinspectrummanagementby:

i. enablingtheACMAtodelegatespectrummanagementfunctionstootherentitieswhereappropriate

ii. allowinglicenseestoresolveinterferenceanddisputes,including: encouraginglicenseestoaccessalternativedisputeresolution requiringtheACMAtodevelopandpublishguidelinesonitsdispute

managementprocesses expandingrightsoflicenseestotakecivilproceedings.

RationaleforreformDelegatingspectrummanagementfunctionsTheACMAiscurrentlylimitedinthefunctionsitcandevolvetoindustryundertheAct.Otherentitiesmaybeabletoperformthesefunctionsmoreefficientlyandeffectively.Thisproposalcouldprovidegreaterflexibilityandfitforpurposeaccessarrangementsforspectrumusersbybringingspectrummanagementclosertotheuserwhereappropriate.Itwouldalsoallowinnovativemanagementarrangementstodevelop,andpotentiallyresultingreaterefficiencyofspectrumuse.AllowinglicenseestoresolveinterferencedisputesThecurrentarrangementsdonotencourageorincentivisespectrumuserstoresolveinterferenceproblemsthemselves,insteadtheyrelyontheACMAtoaddresstheseissues.ThisplacesanincreasedadministrativeburdenontheACMAwhereusershavethecapacitytoresolveinterferencedisputesbutdonotdoso.Stakeholdershaverequestedtherighttoundertakecivilactiontoenforcetheirrightsofaccess.ProposalDelegatingspectrummanagementfunctionsItisproposedthattheACMAbeabletodelegateitsspectrummanagementfunctionswiththeintentionofenablinggreaterinvolvementofspectrumusersandotherentitiesinspectrummanagementandsoimproveflexibilityandefficiency.Thismayincludeprivatebandmanagementorinvolvementofotherentitiesinspecificpartsoftheframework.TheACMAwoulddesignatewhatrolesorfunctionsweretobedelegatedandanyrequirementsthatwouldapply.Thiscouldincludeplanning,licensing,pricing,feecollection,interferencemanagementanddisputeresolution.Intheinterestsofflexibility,thelegislationwouldnotmandateparticularfunctions.TheACMAwouldberesponsibleformonitoringandoverseeingthesearrangementstoensurethedelegatedfunctionsareperformedeffectivelyandremainconsistentwith

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policyguidanceandspectrummanagementarrangements.TheACMAwouldbeabletowithdrawdelegationsforcertainreasons,forexample,breachesofrequirements.Somestakeholdershaveindicatedconcernaboutthedelegationofparticularfunctions,suchasinterferencemanagementandcomplianceandenforcement.TheDepartmentspreferredapproachistonotlimitthekindsoffunctionsthatcanbedelegated,withtheappropriatenessofdoingsotobeconsideredatthetimeaproposalisputforward.ItisexpectedthattheACMAwouldretainoversightofanyfunctionsdelegated,havingregardtoanyMinisterialpolicystatements.Somestakeholderssuggestedinsubmissionsthatindustrycodesmaybeausefultoolforusersinvolvementinspectrummanagement.Industrycodesaremostlikelytobesuccessfulwheretheydealwithtechnicalissuesandtheindustryisclearlydefinedwithasmallnumberofparticipants.Thespectrumsectorismorefragmented,withalargenumberofdiverseusers,andlesssuitedtoacoregulatoryapproachwherecodesarerequiredtobeagreedbyallorasubstantialsectoroftheaffectedparties.WhilethenewActwouldprovideforindustrycodes,theDepartmentspreferredapproachisforuserinvolvementinspectrummanagementtooccurthroughselfregulationorthedelegationofspectrummanagementfunctionsbytheACMA.AllowinglicenseestoresolveinterferencedisputesTheintentionistoallowspectrumusersindisputeoverinterferencetovoluntarilyattemptresolutiondirectlythemselvesorthroughalternativedisputeresolutionmechanisms,priortoapproachingtheACMA.Incaseswherethisoptionistakenup,theACMAwouldonlybecomeinvolvedwhereareportfromaconciliatorormediatorindicatesthatnoresolutionispossible.Toencouragethisoptiontobeused,theACMAwouldberequiredtopublishguidelinessettingoutitsdisputehandlingprocess,includingtheexpectationthatusersgenerallyattempttoresolveanissuethemselvesbeforecomingtotheACMA.ThesewouldbedevelopedinconsultationwiththeMinisterandstakeholders.TheACMAsguidelineswouldincludetheprocessstepsandoutlinetherolesandresponsibilitiesofallinvolvedinadispute.Theseguidelineswouldformthebasisofastandardapproachtodisputeresolutionandguidetheconductofanyindependentdisputeresolutionprocesses.Interferenceprotectionisaprimaryconcernofstakeholders.Itwillnotalwaysbeappropriateforuserstoresolveinterferenceissuesthemselves.Insomecasestheinterferingpartymaynotbereadilyidentifiableandinterferencemayhaveseriousconsequences.Underausermanagedarrangement,therewouldbeaprocesstoescalateinterferencedisputesforresolutionbytheACMA.Whereinterferenceisparticularlyserious,forexamplewhereitthreatenssafetyoflifeand/orproperty,andforinterferenceofunknownorigin,theACMAwouldremainthemostappropriatebodytoinvestigateandinitiateaction.SpectrumlicenseesarecurrentlyabletoundertakeFederalCourtcivilproceedingsagainstapersoncausingtheminterference.Theproposalwouldexpandeligibilitytoundertakecivilproceedingstoawiderrangeoflicensees.

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2.7. Recommendation1(f)StreamlineddevicesupplyschemesStreamliningdevicesupplyschemesby:

i. authorisingtheACMAtodeveloptargeteddevicesupplyschemescommensuratewithrisk

ii. allowingusersofdevicesthatarenotsubjecttoaspecificschemetomanagetheircomplianceobligationsconsistentwithgeneralinterferencemanagementprinciples.

RationaleforreformSupplyregulationneedstobesimplifiedandmadelessduplicative.Supplyregulationisnecessarytolimitthelikelihoodofnoncompliantdevicesenteringthemarketandcreatinginterferencetoradiocommunications.Currentlyanexanteapproachisusedasitistoodifficultandcostlytoregulateuseafterthefact.Thescopeofregulationisbroad.Itincludesallelectricalandelectronicequipmenttoensuretheirelectromagneticcompatibility,aswellasmandatesspecificperformancecharacteristicsforradiocommunicationstransmitters.ThecurrentActisverydetailedandallowsfortheACMAtomakestandards,labellingandrecordkeepingrequirementsthatareburdensomeforbusinessandtheACMA.ItalsoimposesanAustraliaspecificcomplianceburdenonsuppliersthatcanactasabarriertomarketentryandinternationaltrade.Theglobalisationoftradehasalsomeantthatthecurrentframeworkfailstocaptureallrelevantpartiesinthesupplychainsuchassomeparallelimportsanddropshipments.12SimplifyingcomplianceispartoftheAustralianGovernmentsIndustryInnovationandCompetitivenessAgenda13toassistsmallandlargebusinesses.Reducingthehighlydetailedrequirementswhereappropriatewouldreducecostsanddelaysforbusinesses,increasethesupplyofproductsintotheAustralianmarketandallowregulatoryauthoritiestofocusonhigherpriorities.ProposalItisproposedthatthedetailintheRadiocommunicationsActaroundlabellingandrecordkeepingrequirementsberemovedandtheACMAauthorisedtodevelopdevicesupplyschemesinsubordinateregulationthatarecommensuratewithrisk.TheprimarylegislationwouldspecifytheobjectivestobeconsideredbytheACMAindevelopingandapplyingsupplyschemes,andamendthedefinitionofsuppliertocaptureallpartiesinthesupplychain.Generalinterferencemanagementprinciples/requirementscouldbespecifiedintheprimarylegislationorinagenerallyapplicabledevicesupplyscheme.Apreferredapproachwouldbedevelopedthroughthe12 Drop shipping is the supply of items where local traders act as an intermediary between an overseas supplier and the consumer.

13 Industry Innovation and Competitiveness Agenda: A lower cost, business friendly environment - Reducing the regulatory burden, October 2014. www.dpmc.gov.au/pmc/publication/lower-cost-business-friendly-environment-reducing-regulatory-burden

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draftingprocessinconsultationwithstakeholders.Consistencywithotherlegislationwouldalsobeconsideredwhendraftingthenewarrangements.TheACMAwouldberequiredtodevelopdevicesupplyschemesthat:> areappropriatetothelevelofriskposedbytheequipmentintermsofriskof

interferenceand/orriskstohealthandsafety> aretargetedtoensurecomplianceobligationsaremetbythemostappropriateparty

inmodern,complexandglobalisedsupplychains> definethepartybearingthecomplianceburdenforaparticularsupplychainto

mitigateindustryconcernthatambiguityofresponsibilitycreatesregulatoryburden.DevicesupplyschemesdevelopedbytheACMAmayincludeelementsofcurrentrequirementswheretheACMAconsidersthisisnecessarybasedontheriskposed.Supplierswouldbefreetochoosehowtheycomplywithgeneralinterferencemanagementprinciples/requirementsunlesstheACMAhassetoutspecificobligationsinadevicesupplyscheme.Forexample,ifasystem,serviceorproducthasbeenapprovedunderatrustedinternationalstandardorriskassessment,thentheACMAshouldnotimposeanyadditionalrequirementsforapprovalinAustralia,exceptincaseswheretheneedforuniqueAustralianregulationscanbedemonstrated.

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2.8. Recommendation1(g)ImprovedcomplianceandenforcementImprovingcomplianceandenforcementbyintroducingproportionateandgraduatedenforcementmechanismsforbreachesofthelegislativeframework,including:

i. enablingtheACMAtoimposecivilpenalties,issuerecallsorinterimbansandissueremedialdirectionsandformalwarnings

ii. applyingstrictliabilityprovisionsandinfringementnoticestoabroaderrangeofoffences.

RationaleforreformTheACMAneedsabetterrangeofcomplianceandenforcementtools.TheRadiocommunicationsActisreliantoncriminalsanctionswhichappliesahigherstandardofproofthanforcivilactions.ItistheACMAsresponsibilitytocollectevidencethatmeetsthestandardofproofrequiredtoprosecuteanoffence.Therearestrictliabilityprovisionsbuttheseapplytoalimitednumberofoffences.Intheeventofabreachofaspectrumlicencecondition,theACMAislimitedtosuspendingorcancellingthelicence,ratherthanusingmoregraduatedtoolssuchasremedialdirectionsandformalwarnings.TheACMAalsohaslimitedflexibilityintermsofitstechnicalregulation.Incontrast,electromagneticcompatibilitynoncomplianceiscommonlymanagedthroughrecallsinNorwayandSwedenandbansintheUnitedKingdom.Stakeholdersareseekingamoreeffectiveapproachtocomplianceandenforcement.ProposalTheproposalistointroducegraduatedcomplianceandenforcementarrangements.Thiswouldenablemoretargetedresponsestobreachesoftheframeworkandapathwayofescalation,enablingtheACMAtotakeactionwhichismorecommensuratewiththeseriousnessoftheconduct.AdditionalenforcementpowersandanexpandedrangeofpenaltieswouldbetteraligntheACMAsenforcementcapabilitieswiththoseofotherAustralianregulators.CriminaloffenceswouldbereviewedtotakeaccountofdevelopmentsinpolicyandcontemporarypracticeontheframingandoperationofCommonwealthoffences.Specificproposalsinclude:> reviewing(inconsultationwiththeAttorneyGeneralsDepartment)whatcriminal

and/orcivilpenaltiesshouldapplyunderthereformedframeworkcivilpenaltiesareavailabletootherregulatorsinAustraliaandoverseas,includingmeasuresavailabletotheACMAundertheTelecommunicationsAct1997andtheBroadcastingServicesAct1992

> applyingstrictliabilityprovisionsandinfringementnoticestoabroaderrangeofoffencesthiswouldreducetheevidentiaryburdenandenableminoroffencestoberespondedtoandresolvedmorequicklyandefficiently

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> enablingtheACMAtoissueremedialdirectionsandformalwarningstheseareusefulintermediarystepsandwouldenhancetheACMAscapacitytopreventorremediateinterferenceandothernoncompliancematters

> enablingtheACMAtoseekcourtorderssuchasinjunctionstorestrainexistingorfutureconduct,orrequiringrespondentstoundertakecertainactionincludingpublishingnoticesabouttheirconduct

> empoweringtheACMAtoissuerecalls,interimbans,formalandpublicwarningsand/orrequireconsumerwarninglabelsthiswouldgreatlyassisttheACMAinitsmanagementofthesupplyofnoncompliantdevices,forexample,whenaproductposesaninterferenceriskandthesupplierisnotpreparedtorecallthegoodsvoluntarilyorasuppliercannotbefound.

ConsultationwiththeAustralianCompetitionandConsumerCommissionandStateandTerritoryfairtradingagencieswouldbeundertakeninrespecttothefinalproposaltoensurethereisnooverlapwithexistinglegislativeframeworksregardingconsumerproductsafety.

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2.9. Recommendation1(h)TransitionalarrangementsEnsuringthattherightsofexistinglicenceholdersarenotdiminishedinthetransitiontothenewframeworkby:

i. providingthatallocationandreallocationprocessesunderwayatthetimethenewActcomesintoeffectwouldcontinueunderthecurrentarrangements

ii. allowingexistinglicencestocontinueundertheoldlicensingarrangementsuntilexpiry,whilealsoallowingtheselicencestotransitionearlieratthelicenseesdiscretion

iii. providingcertaintyforcurrentholdersofbroadcastinglicencesandnationalbroadcastersthattheywouldhavecontinuedaccesstospectrumforthedeliveryofbroadcastingservices.

RationaleforreformTransitionalarrangementswouldneedtobeworkedthroughcarefullywithstakeholdersandthefulltransitiontothenewframeworkwouldtakeplaceoveranumberofyears.Inadditiontothenewlegislationcomingintoeffect,significantworkwouldberequiredtoprepareforimplementationofthenewframework,includingthedevelopmentofnewstandardlicenceoptions.Indevelopingthesearrangements,ongoingassuranceforexistinglicenseesandcloseengagementwithstakeholderswouldbeparamount.ProposalReplanningandallocationactivitiesAsageneralprinciple,anyprocesses,includingallocationandreallocationactivities,underwayatthetimethenewActcommenceswouldcontinueundertheoldframework.AnyallocationorreallocationactivitiesthatbeginaftertherelevantpartofthenewActcommenceswouldbeconductedunderthenewframework.PriortothenewActcommencingtheACMAwouldbeexpectedtohaveregardtotheoutcomesofthisreviewwhenconsideringimplementationofanyreplanningorreviewsofbandsthatareunderway.ExistinglicencesAllexistinglicenceswouldcontinueunderthecurrentframeworkwiththeircurrentlicenceconditionsuntilexpiry(orrevocationinthecaseofclasslicences).However,oncethenewframeworkcommencesnonewlicenceswouldbeissuedundertheoldlicensingsystem(otherthandesignatedprocessesunderwayatthetimeofcommencement).Theconsequencesforexistinglicenseeswouldbe:> Apparatuslicencestransitiontothenewarrangementsasexistinglicencesexpire,

however,alllicenseeswouldbegivenatleast12monthsnoticeofthetransition.> Spectrumlicencesthesewouldbegrandfatheredandcontinueuntilexpiryunless

usersvoluntarilytransitiontothenewframework.

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> ClasslicencesthesewouldcontinueuntilrevokedbytheACMA.Ingeneral,revocationwouldoccurwhenanappropriatereplacementlicenceorregulationisavailableunderthenewarrangements.

Thegrandfatheringofspectrumlicenceswouldresultinaprotractedtransitionperiod(upto15years)duringwhichbothframeworkswouldoperateinparallel.Thereforeconsiderationwouldbegiventoappropriatearrangementstoencourageexistinglicenseestomovetothenewsystempriortoexpiryoftheirlicence.Anyearlymigrationwouldbeatthelicenseesdiscretion.LicencesforbroadcastingserviceprovidersBroadcasterswouldtransitiontothenewarrangementsonthesamebasisasotherapparatuslicensees,thatis,theywouldcontinuetooperateundercurrentarrangementsuntiltheirlicencesexpire.Theywouldthenbeissuedlicencesunderthenewarrangementswiththetechnicalfeaturessimilartotheircurrentlicences.ThepricingarrangementsforbroadcastersspectrumlicenceswouldbeconsideredbytheGovernmentthroughtheproposedreviewoutlinedatrecommendation3andwouldalsotakeintoaccountthepricingarrangementsthatapplytobroadcastersseparatebroadcastingservicelicences.

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2.10. Recommendation2GovernmentspectrumuseRecognisingthathowpublicsectoragenciesaccountforanddealwithassetsisaseparatepolicymatterforGovernment,thefollowingapproachescouldbeconsidered:

i. requiringpublicsectoragenciesthatholdspectrumtoregularlyreportthevalueoftheirholdings

ii. permittingagenciestoeitherleaseorsellthespectrumandretainthebenefitofdoingso.

RationaleforreformGovernmentusersofspectrumprovideservicesthatoffersignificantbenefitstosocietybeyondapurecommercialreturn.Theseuserscurrentlyreceivemostoftheirspectrumadministratively,andshouldtheyachieveefficienciesinitsusearegenerallyunabletofullyrealisethesebenefits.TreatmentofGovernmentassetsisamatterofGovernmentpolicy.However,fromtheperspectiveofanewframework,thepolicyobjectiveofimprovingefficiencyandtreatingspectrumusersconsistentlywouldbesignificantlyenhancedifGovernmentusersareabletobenefitfromtradingandleasingofspectrum.ProposalItisproposedthattheGovernmentconsideritspoliciesregardinghowpublicsectoragenciesaccountforandarepermittedtodealwithassets,suchthatagenciescanbenefitfromboththeadditionalflexibilityprovidedinthenewframeworkandmoreefficientuseoftheirspectrumholdings.Thiswouldincludeconsidering:> requiringpublicsectoragenciesthatholdspectrumtoregularlyreportthevalueof

theirholdings,and> permittingagenciestoeitherleaseorsellthespectrumandretainthebenefitof

doingso.

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2.11. Recommendation3SpectrumpricingThattheDepartmentreviewthearrangementsforpricingofspectrum(includingexemptions,concessions,administrativechargesandtaxes)sothattheseareconsistent,transparentandsupportefficientuseinsecondarymarkets.

i. ThisreviewwilltakeintoaccountanyrelevantoutcomesoftheReviewofAustralianGovernmentCharging.

RationaleforreformIftheproposedchangestothelegislationandlicensingareagreed(recommendations1and1(a)),thenpriceschargedforspectrumwouldneedtobereviewedtoensuretheyareappropriatetothenewarrangements.Forexample,changestolicenceconfigurationandaccessrightsmayrequireadjustmentstopricing.Currentpricingarrangementsarecomplexandmaynotalwaysprovideanincentiveforefficientuse.Theapproachtoprovidingpricingdiscountsisunclearandneedstobeexamined.ProposalItisproposedthatthisreviewwouldconsiderthepricingoptionsandvaluationapproaches(forexample,opportunitycostpricingorotherformsofadministeredincentivepricing)whichshouldbeappliedtospectrumunderanynewarrangements.Itwouldalsoconsiderrelatedpricingissuessuchastaxescharged,theapplicationofconcessionalratesandrecoveryofadministrativecosts.ThereviewwouldcommencefollowingGovernmentsapprovalofanewlegislativeframeworkandwouldreporttotheMinisterinattheendof2015.Theoutcomesofthereviewwouldinformthechargesforlicencesallocatedunderthenewframework.

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3. Financialimplications3.1. SinglelicensingsystemimplicationsforchargingandrevenuesThecurrentlicencetypeshavedifferentpaymentstructures.Amovetoasinglelicensingsystemthatprovidesforgreaterpaymentflexibility,whilenotaffectingcurrentlyissuedlicencesandtheirassociatedpaymentarrangements,hasthepotentialtoprovidegreatercertaintyaroundrevenueforecasts.Asnotedinrecommendation3,movingtoasinglelicensingsystemwouldalsonecessitateareviewofspectrumpricingarrangements.Charges,pricingandimplicationsforGovernmentrevenuewouldbereportedtotheMinisteraspartofthatreview.3.2. CompensationCompensationiscurrentlypayableundertheRadiocommunicationsActtospectrumlicenseesiftheACMAresumespartorallofalicence(section93).TheACMAmustnotcompulsorilyresumealicencewithouttheMinistersapproval.Statutorycompensationisnotavailabletoapparatusorclasslicensees.ItisproposedthattherighttocompensationwouldcontinuetobealastresortinlimitedcircumstancesandsimilarlyrequireMinisterialapproval.Stakeholdershaveaskedforcompensationand/orfinancialassistancetocoverthecostsofrelocationwhenbandsarereplanned.TheDepartmentproposesthatfinancialassistanceforrelocationnotbeprovided.Replanningwouldcontinuetobemanagedthroughnoticeperiodsandtheprovisionofinformationtoassistaffectedstakeholders.AnyassistancewouldbeconsideredonacasebycasebasisbytheGovernmentasoccurredwiththerecentdigitaltelevisionswitchoverandrestackprocess.3.3. CostsofimplementationTheintentionoftheproposedchangesistosimplify/streamlineadministrationofspectrumregulatoryarrangements.Costofregulationisthereforeexpectedtodeclineovertimealthoughtimingofthis,includingprovisionforanytransitionalcosts,wouldneedtobeassessed.ItisproposedthatthisoccurthroughnormalGovernmentbudgetaryprocesses.TheACMAhasindicatedaneedfortransitionalfundingtoundertakeworksuchasreviewingadministrativeinstruments,implementingenhancedcomplianceandenforcementrequirements,stakeholderengagementanddevelopingsystemsandsupportforthesinglelicensingarrangementsandchangesinchargingandpricing.

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4. ImplementationWereGovernmentpolicyapprovaltoimplementtheproposedreformstobeannouncedbymid2015,thenthebroadactivitiesandindicativetimingforthemajorworkstreamstobecompletedbylate2016are:1.Newlegislationandrelatedlegislativechanges.

> DetailedstakeholderconsultationanddevelopmentofdraftlegislativeproposalsannouncementtoSeptember2015.

> ReleaseofconsolidatedlegislativereformpackageSeptember2015.> Passageoflegislativepackagebyearlytomid2016.

2.Initialpolicystatementsandsubordinateregulation.a) PolicyprioritiesandthedevelopmentoftheACMAannualworkprogram.

- Consultationonscopeanddetailofpolicystatementmidtolate2015.- Releaseofpolicystatementfollowingpassageoflegislativepackage.- ACMAcommencesformalconsultationondraftannualworkprogram,

includingtransitionarrangementsmid2016.- Firstannualworkprogramfinalisedmid2016.- Singlelicensingsystem:

Initialexamplesofmodellicencespreparedforreleasewithexposuredraftoflegislationfrommid2015.

Consultationonthedetailofthesinglelicensingsystemmid2015toearly2016.

Releaseofpolicystatementfollowingpassageoflegislativepackage. ACMAcommencesformalconsultationondraftlicensingoptionsmid

2016. ACMAcommenceprogressiveimplementationofnewlicensingsystem

late2016.b) Furthermeasurestofullyoperationalisethenewframeworkincludingallocation

andreallocationprocesses,technicalregulationandcomplianceandenforcementmeasurestotakeplaceduringthecourseof2016and2017.

3.Reviewofpricingarrangements.> Consultationandpreparationofreportonrevisedarrangementsmid2015tolate

2015.> Outcomestoinformimplementationofdraftlicensingoptionsmid2016onwards.

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AttachmentsA. SpectrumreviewprocessB. CurrentspectrummanagementframeworkC. Currentspectrumreallocationprocess

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AttachmentASpectrumreviewprocessOverviewTheDepartmentundertookextensiveconsultationduringthisreview.Thisincludedthereleaseoftwodiscussionpaperstowhichover80submissionswerereceived,over40meetingswithindustry,Governmentandcommunitystakeholdersbothbilaterallyandinfocusgroupsandconductingastakeholderworkshopwithover100attendees.Eachoftheseconsultationactivitiesandkeyoutcomesareoutlinedfurtherbelow.IssuesPaperOn23May2014,theMinisterannouncedthereview.Atthesametimeanissuespaperwasreleasedwhichoutlinedthetermsofreferenceforthereviewanddiscussedtheirbroadercontext.TheDepartmentreceivedatotalof38submissionstotheissuespaper,ofwhich35werepublishedontheDepartmentswebsite.Theremainingthreewereconfidential.ConsultationontheIssuesPaperindividualandgroupmeetingsTheDepartmentconsultedwithover30stakeholderseitheronanindividualbasisoringroupmeetings.Thesediscussionsallowedthestakeholderstohighlightconcernsandofferproposalsregardingthedirectionandscopeofthereview.IndustrygroupsandassociationsTheDepartmentheldindividualmeetingswithover15keyindustrystakeholders,including:> telecommunicationscompanies(Telstra,Optus,Vodafone,theCommunications

AllianceandtheAustralianMobileTelecommunicationsAssociation)> broadcasters(FreeTVAustralia,allthreecommercialbroadcasters,theABCandSBS,

theAustralianSubscriptionTelevisionandRadioAssociationandCommercialRadioAustralia)

> specificserviceproviders(AustralianCommercialandEntertainmentTechnologiesAssociation,AustralianRadioCommunicationsIndustryAssociation,BroadcastAustralia,SatelliteIndustryAssociationofAustralia,andtheWirelessInstituteofAustralia).

Mostofthesestakeholderswereinvolvedinsubsequentengagementactivities(suchastheWorkshop)andmadesubmissionstothereview.

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InterdepartmentalGovernmentMeetingsAninterdepartmentalmeetingwasheldinAugust2014whichbroughttogether17AustralianGovernmentagenciestodiscussaspectsofthereview.Separatemeetingswerealsoheldwiththecentralagencies:theDepartmentofPrimeMinisterandCabinet,theTreasuryandtheDepartmentofFinance.ScientificstakeholdersMeetingswerealsoheldwithscientificstakeholdersfromtheAustralianMaritimeSafetyAuthority,CivilAviationSafetyAuthority,DepartmentofInfrastructureandRegionalDevelopment,andGeoscienceAustralia.MinistersKeynoteAddressattheACMAsRadCommsConference2014On10September2014,theMinisterprovidedakeynoteaddressattheACMARadComms2014conference.Thisspeechprovidedmorecontextforthereviewandidentifiedthreeareasofpotentialreform:> aclearerandsimplifiedpolicyframeworktoensuretransparencyandaccountability

indecisionmaking(forexample,bywayofGovernmentpolicystatementsandspecificMinisterialpowersofintervention)

> asimplifiedandmoreflexiblelicensingsystembasedonaparameterbasedsinglelicensingframework(asopposedtothecurrentthreetypesoflicences)

> introducinggreaterflexibilityintothecurrenttelevisionbroadcastingframeworkthroughavarietyofmeasures.

PotentialReformDirectionsPaperOn11November2014,theMinisterannouncedthereleaseoftheSpectrumReviewPotentialReformDirectionspaper.Thepaperoutlinedfivereformprinciplesand11potentialreformproposalsandinvitedcommentsfrominterestedparties.TheDepartmentreceived46submissionstothispaperofwhich38arepublishedontheDepartmentswebsite.Theremainingeightsubmissionsareconfidential.ConsultationindividualandgroupmeetingsFollowingthereleaseofthePotentialReformDirectionsPaper,theDepartmentundertookadditionalconsultation(includinganinterdepartmentalmeetinginDecember2014andacentralagenciesmeetinginJanuary2015)toupdatestakeholdersonprogressinthereviewprocessandtoprovideanopportunityforstakeholderstoaskquestionsandmakefurthercomment.

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StateandTerritoryGovernmentsMeetingswerealsoheldwithrepresentativesfromtheNewSouthWales,Queensland,Tasmanian,VictorianandWesternAustralianGovernments,includingarepresentativefromtheNationalCoordinationCommitteeforGovernmentRadiocommunications.StakeholderWorkshopOnWednesday28January2015,theDepartmentconductedafulldaystakeholderworkshoponthereview.Theworkshopwasconvenedtoprovidefurtherinformationonproposalstostakeholdersandgatheradditionalfeedbackbyallowingstakeholderstodiscussproposals,askquestionsandraisenewissuesinanopenforum.Therewere103attendeesattheworkshop,representing57organisations.TheworkshopheardpresentationsfromtheParliamentarySecretary,theHonPaulFletcherMP,and12speakersfromindustry,otherstakeholdersandGovernmentwhodiscussedopportunitiesandideaspresentedbythereformprocess.

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AttachmentBCurrentspectrummanagementframeworkAustraliasspectrummanagementframeworkisestablishedundertheRadiocommunicationsAct,relatedlegislationandsubordinateinstruments.TheobjectsoftheRadiocommunicationsActbroadlyoutlinetheframeworksobjectives,includingmaximisingthepublicbenefitthroughspectrumsefficientallocationanduse,makingadequateprovisionforpublicandcommunityservicessuchasdefence,securityandemergencyservices,andpromotinginternationalharmonisationinAustraliasinterests.TheroleoftheRadiocommunicationsActTheRadiocommunicationsActintroducedmarketbasedarrangementsofspectrumallocationandpricingtooperatealongsidetheexistingadministrativeframework.Thesemarketbasedarrangementsweredesignedtopromotemoreefficientallocationandusethroughtheuseofauctionstoallocatespectrumaccessrights,aswellasallowingsecondarytradingofthoserights.Thishybridadministrative/marketmodelpreservesthecentralroleofGovernmentinplanningandadministeringspectrumwhileallowingforamarketbasedapproachinareasofcommerciallydrivendemand.TheRadiocommunicationsActdefinesthreeseparatelicencecategoriesforspectrum.> Spectrumlicencesauthoriseexclusiveuseofspecificportionsofspectrumina

particulargeographicarea(includingnationallicences).Spectrumlicencesaffordthemostprotectionfrominterference,andbecauseofthisandtheirtechnologicalneutrality,theyaregenerallymoresuitabletotrading.Spectrumlicencesareissuedusingapricebasedmethod,throughauction,tenderorpredeterminedorprenegotiatedprice,foraperiodofupto15years.

> Apparatuslicencesauthoriseapersontooperateaspecifiedtransmitterorreceiverinadefinedpartofthespectrum,inaccordancewithlicenceconditions.Theselicencesaregenerallyissuedforuptofiveyearsandarerenewableuponexpiry,subjecttotheACMAsconsent.

> Classlicencesauthoriseusersofdesignatedsegmentsofspectrumtooperatealowpowerorlocalisedservice(suchWiFinetworksorcordlesstelephones),providedthedevicecomplieswiththelicenceconditions.Classlicencesestablishpartsofthespectrumascommons,donotinvolvelicencefeesandprovideuserswithnoprotectionfrominterference.

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SpectrummanagementUndertheRadiocommunicationsAct,theMinisterhascertainpowerstomakespecificdecisionsandinputtoprocesses.Inthiscontext,theDepartmentprovidesadvicetoGovernmentonthepolicyaspectsofspectrummanagementandintheexerciseofthesepowers.TheACMAistheindustryregulatorresponsibleforregulationofradiocommunicationsconsistentwiththeRadiocommunicationsAct(aswellasspectrumforbroadcastingpurposesconsistentwiththeBroadcastingServicesAct1992).TheACMAsspectrummanagementfunctionsaresetoutintheACMAAct,theyinclude:> performingitsfunctionsundertheRadiocommunicationsAct,whichinclude

planning,licensing,allocationandreallocationofspectrum> advisingandassistingthespectrumcommunity> reportingto,andadvising,theMinisterinrelationtothespectrumcommunity> managingAustraliasinputintothesettingofinternationalstandardsfor

radiocommunications> givingadviceandmakinginformationavailabletothepublicaboutthespectrum

community,includingconductingpubliceducationalprograms> undertakingfunctionsconferredontheACMAthroughthespectrumrelatedtax

Acts.TheACMAalsopreparesadvicetoGovernmentandthemarketonfuturespectrumactivitiesandissues,includingthrough:> TheAustralianRadiofrequencySpectrumPlan,whichisastatutoryinstrumentunder

theRadiocommunicationsActthatoutlinesAustraliasinternationalspectrumharmonisationobligations;identifiesvariationstointernationalallocations;andinformsusersaboutthevarioustypesofservicesthatcanbeoperatedineachfrequencyband,andtheconditionsattachedtotheiroperation.ItisusuallyupdatedaftereachWRCmeeting.

> TheFiveYearSpectrumOutlookwhichprovidesarollingfiveyearsnapshotofACMAsspectrumdemandanalysisandindicativeworkprogram.

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AttachmentCCurrentspectrumreallocationprocess

1. ACMAmustpublishanoticeandconsultondraftrecommendationfortheMinisterto

makeaspectrumreallocationdeclaration(SRD)(s153G).

3. TheMinistermakesaSRD(s153B)butonlyiftheACMAmakesrecommendationwithintheprevious180days(s153E).TheActprescribeswhatmustbeincludedinaSRD(s153B).

4. TheMinistermustgiveacopyoftheSRDtotheACMA(s153C(1)).

6. ACMAmustprepareamarketingplan(s39A).Thisplanspecifiesthespectrumtobeallocated,howitistobeallocatedandconditionsthatmayapply.

8. ACMAmustallocatethespectrumbeforethereallocationdeadlineotherwisetheSRDistakentoberevoked(s153K).

7. ACMAmustdeterminetheprocedurestoapplyforallocatingthespectrum(s60).Beforedeterminingtheseprocedures,theACMAmustconsultwithACCC(s60(14)).ACMAmustnotimposecompetitionlimitsunlessdirectedbytheMinister(s60(9)).

12. ACMAmustissuelicencetopersontowhomallocatedonpaymentofcharges(s62).ACMAmustcomplywithrequirementsofmarketingplaninissuinglicence(s63).

9. TheMinistermustnotrevokeorvarytheSRDoncetheACMAhasbeguntheallocationprocess(s153J).

10. Attheendofthereallocationperiod,anyapparatuslicencesaffectedareautomaticallycancelled(s153H),notingsomeexceptionsforbroadcasting.

11. ACMAmustdeterminespectrumaccesscharges (s294).

5. ACMAmustissueapublicnoticethatSRDhasbeenmade(s153C(2)).

2. ACMArecommendstotheMinistertomakeaSRD(s153P).