In this article, we provide a summary of some recent developments in mobile spectrum in Australia. This article was published in the May 2010 edition of Communications Law published by the International Bar Association.
Deployment of advanced mobile services
Australia continues to be a world leader in the deployment of advanced mobile services:
- During 2008, Telstra Corporation Limited (as the incumbent Australian carrier) was the first mobile carrier in the world to launch HSPA+ services over its 3G network, providing peak mobile downlink speeds of up to 21Mbit/s. HSPA+ deployment was completed during 2009.
- In February 2010, Telstra upgraded its HSPA+ services to 'dual carrier' technology. As a result, peak downlink speeds of 42Mbit/s are now achievable by enabling wireless data to be sent and received using two channels simultaneously.
- In March 2010, Telstra announced trials of "Long Term Evolution" (LTE) technologies involving Motorola, Nokia Siemens, and Ericsson, beginning from May 2010.
However, a deterrent to further investment by Telstra is raised by the Australian Government's current legislative proposal to ban Telstra from using radiofrequency spectrum to supply services in certain key LTE frequencies (namely 520MHz-820MHz and 2.5GHz-2.69GHz). The ban would apply until such time as Telstra 'voluntarily' implemented full structural separation of its fixed network wholesale and retail businesses. As at March 2010, the relevant legislation to implement that ban is currently being debated in Australia's Parliament.
Any such ban would not apply to the two other principal mobile carriers in Australia, namely SingTel Optus ("Optus") and Vodafone Hutchison Australia ("VHA"). Both of these carriers have indicated an interest in deploying LTE and are currently also proposing to undertake trials during 2010. VHA was formed by the merger of Vodafone and Hutchison's operations in Australia in 2009 and is currently 50:50 owned by Hutchison and Vodafone.
Absence of spectrum
However, as with other jurisdictions, the deployment of LTE in Australia is impeded by an absence of sufficient radiofrequency spectrum. For this reason, significant attention in Australia is now focused on spectrum reallocation issues.
In January 2010, the Australian Department of Broadband, Communications and the Digital Economy issued two important papers to address these issues:
- a 'Green Paper' identifying a 'digital dividend' in the 700 and 800 MHz radiofrequency bands that may arise from the closure of analogue television services (Green Paper); and
- a Discussion Paper reviewing the 2.5 GHz radiofrequency band and the long term arrangements for electronic news gathering (Discussion Paper).
This article outlines the conclusions from both papers.
700MHz and 800MHz bands
As with other nations, Australia will progressively migrate end users from analogue television to digital television. Analogue transmission will be progressively switched off in successive regions following expiry of analogue-digital 'simulcast' periods. Such 'switchover' will be completed by December 2013. Upon switchover, Australia will 'restack' the current spectrum designated for broadcasting services in order to achieve more efficient use of spectrum.
The resulting surplus UHF spectrum constitutes a 'digital dividend' which will be used for the delivery of new radiocommunications services. Australia has set a target 'digital dividend' of 126 MHz in the upper UHF band (694 – 820 MHz or UHF channels 52 to 69). Such spectrum has the ability to carry signals over long distances, penetrate buildings and carry large volumes of data. Accordingly, it is regarded as 'premium' spectrum by the market and likely to be in high demand.
The Green Paper analyses the types of services that the digital dividend spectrum could be used to deliver:
- As the spectrum can carry signals over long distances it will be ideal for delivering cost effective mobile telecommunications to regional and remote Australia.
- Wireless broadband services may be used for coverage infill for those end users that cannot be directly connected to the Australian Government's proposed new fibre-to-the-home 'National Broadband Network'.
- The spectrum can be used for mobile television and multimedia, via unicasting, multicasting or broadcasting. It can also be used to improve the quality and scope of existing broadcast services. For instance, by providing more services in high definition TV or extending the terrestrial coverage of existing digital TV services.
Given these potential uses, the Green Paper documents the Government's proposal to realise the full value of this spectrum. Specifically, the Green Paper identifies the following key principles to guide the future allocation of this 'digital dividend' spectrum:
- As future uses of spectrum cannot be accurately predicted, market mechanisms should be used to determine the optimal spectrum allocation.
- Large contiguous blocks of spectrum are economically optimal.
- Australia needs to align its spectrum allocations with other major developed countries;
- As there is a trade off between efficiency and disruption to current spectrum users, the benefits of clearing a contiguous block of spectrum should be weighed against the costs of re-stacking broadcasting services (including any adverse impact on the future delivery of broadcasting services due to reduced size broadcasting services bands).
Based on the analysis set out in the Green Paper, it is likely that the digital dividend spectrum in the 700MHz and 800MHz bands will be subject to auction. The timing for any such auction is presently unknown, but is anticipated to occur in 2012.
2.5 GHz band
In Australia, the 2.5 GHz band is primarily used by commercial free-to-air broadcasters for electronic news gathering (ENG). The Discussion Paper examines these current uses in light of the international trend to use this band for wireless access services. The Discussion Paper identifies that the annual license fees for licenses may not necessarily reflect the current value of the band and re-allocation may therefore be required.
The Discussion Paper canvasses four principal options for the future of the 2.5 GHz band, namely to:
- continue with the existing apparatus license arrangements;
- review current pricing arrangements so that they accurately reflect opportunity costs;
- provide more flexibility to incumbent licenses in the use of the relevant spectrum; or
- re-allocate the band and issue technology-neutral spectrum licenses.
The Discussion Paper concludes that a combination of the third and fourth options would result in an optimal outcome. Accordingly, ACMA proposes to retain part of the 2.5 GHz band for continued ENG operation and to reallocate the remainder of the band (up to 190 MHz) to wireless access services via a spectrum auction.
While the 2.5GHz spectrum will most likely be subject to auction, the timing for that auction remains unclear. Current speculation is that it may occur at the same time as the 700MHz and 800MHz spectrum auctions, most likely during 2012.
While the Green Paper and the Discussion Paper propose solutions to the many issues faced in the reallocation of spectrum to facilitate LTE services, Australia still faces some interesting challenges. By way of example:
- Effect on broadcasters: Both the 2.5 GHz band and the digital dividend spectrum are used by television broadcasters. This raises two important issues:
- First, the reallocation of the digital dividend spectrum and 2.5 GHz spectrum should occur simultaneously. As both papers are silent on any timetable for allocation, this has created uncertainty for broadcasters in spectrum planning. This issue is complicated by historic licensing decisions given that parts of the 2.5 GHz spectrum are encumbered by apparatus licenses until February 2013.
- Second, the reallocation process will reduce the size of BSBs. Australia will therefore need to ensure that broadcasters have sufficient spectrum to provide existing and planned new services. Allocating less spectrum to the broadcasters may conflict with broadcasting policy objectives.
- Scope of Minister's power: The Green Paper anticipates that the digital dividend spectrum will be reallocated away from use by BSBs. Accordingly, the Minister will need to change the designation of the relevant spectrum so that it can be reallocated for other uses. However, it remains unclear at this stage the extent to which the Minister has sufficient statutory power to enable this re-designation to occur.
- Impact of restacking: The restacking of channels will lead to some inconvenience for end users. When viewers install digital television reception equipment they scan for channels. If those channels subsequently change due to a restack, a further scan is required. Although digital set top boxes have the capability to rescan, this often requires manual intervention. As such, a consumer education campaign will be required.
Each of these issues are currently the subject of further industry consultation.