Rules set for Australian auction of 3.4GHz band

Competition in the telecommunications market will be boosted as a result of the Government's decision to release for auction spectrum in the 3.4GHz band, the Minister for Communications, Information Technology and the Arts, Senator Richard Alston, said today.

'The sale of spectrum licences encourages further competition in telecommunications services, and with greater competition, consumers can expect greater access to a wider range of services at a lower cost. Industry sources have indicated that this spectrum is most likely to be used for high speed internet services and/or traditional voice services.' Senator Alston said.

'The auction will provide another opportunity for new players to enter Australia's dynamic telecommunications market and compete with existing players on choice of products, service quality and price.'

The competition limits are designed to ensure that no one player dominates the provision of telecommunications services in the 3.4GHz band, especially in the provision of wireless local loop services. Telstra has a number of existing and proposed technologies capable of delivering high speed internet and traditional voice services to consumers and therefore Telstra has been excluded from bidding for 3.4 GHz spectrum in major population centres.

The 3.4 GHz spectrum to be auctioned comprises:

· 35 MHz of A Block spectrum (ie 3425-3442.5 MHz and 3475-3492.5 MHz) in the major population areas of Adelaide, Albury, Bendigo, Brisbane, Cairns, Canberra, Hobart, Launceston, Melbourne, Perth, Rockhampton, Sydney, Toowoomba and Townsville; and

· 65 MHz of B Block spectrum (ie 3442.5-3475 MHz and 3542.5-3575 MHz) on a nationwide basis except in north-western Australia.

The competition limits for the 3.4 GHz band auction involve:

(a) a zero limit on Telstra for major population areas (A and B Blocks) and a 22 MHz limit in each of the 3442.5 - 3475 MHz band and the 3542.5 - 3575 MHz band (B Block) for each auction lot area which is outside the major population areas; and
(b) a 67.5 MHz limit (A and B Blocks) on each other bidder for each auction lot area in a major population area (no other restriction will apply to such bidders in areas other than major population areas).

The effect of these limits is to exclude Telstra from both the A and B Blocks in major population areas but enable it to bid for a total of 44 MHz of spectrum in regional areas. All other bidders will be restricted to 67.5 MHz in major population areas, with no limit in regional areas.

The Australian Communications Authority, the government agency that will conduct and administer the auction, will shortly advertise for potential bidders to lodge applications to bid in the auction. This will set the scene for an auction of this spectrum as soon as is practicable.

'This is further good news for competition and consumers. Under the Government's open telecommunications regime consumers are already benefiting from significant reductions in prices, while experiencing greater choice and improved service standards,' Senator Alston said.

The rules were determined after consultation with the Australian Competition and Consumer Commission (ACCC), and are designed to minimise any possible breach of the anti-competitive provisions of the Trade Practices Act.

The competition limits are set out in a Direction from the Minister to the Australian Communications Authority, made under subsection 60(10) of the Radiocommunications Act 1992. A copy of the Direction and the related Regulation Impact Statement is available on the website of the Department of Communications, Information Technology and the Arts at www.dcita.gov.au

Media contact: Sasha Grebe, Minister's office, 02 6277 7480

Website: www.richardalston.dcita.gov.au or visit www.australia.org.nz

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