On 2 August 2017, the Australian Communications and Media Authority (ACMA) issued a discussion paper on its proposals to auction a number of lots in the 1800MHz, 2GHz, 2.3GHz and 3.4GHz spectrum bands, which it referred to as “multiband residual lots”. ACMA sought views, by 25 August 2017, on both the way in which ACMA proposes to configure the spectrum for the auction and the auction rules and methodology. It is proposed that these lots will be auctioned before the end of 2017.

As noted in our article on that consultation process (see here), an outstanding issue for the proposed auction of the multiband residual lots was whether ACMA, as directed by the Minister for Communications under section 60(10) of the Radiocommunications Act 1992 (Cth), would impose competition limits on the spectrum licences that could be acquired by one entity or group. The Minister sought the advice of the Australian Competition and Consumer Commission (ACCC) on this issue. The ACCC provided that advice on 14 August 2017.

Given its view that the spectrum would most likely be used to provide mobile broadband (including voice) services, the ACCC considered this issue only from the perspective of competition in the mobile sector. In noting that there is currently “signs of reasonably effective competition” in the mobile services market and also that the multiband residual lots are dispersed and the spectrum available is not significant, the ACCC recommended limits only for the lots in the 1800MHz band. In this regard, the ACCC noted that imposing such limits would allow Vodafone or TPG to acquire spectrum in the Mackay area, where neither currently holds any spectrum, that could be used for 4G services. The ACCC advised that, while the recommended limits would significantly restrict the acquisitions that could be made by Telstra and Optus, each of those network operators already holds sufficient spectrum in the 1800MHz band to allow it to compete effectively. In recommending that no limits should be imposed on the acquisition of lots in the 3.4GHz band, the ACCC took into consideration that this spectrum could be used for 5G services but concluded that the small amount of spectrum available meant that a limit would not be appropriate.

The Government has accepted the advice of the ACCC and will therefore impose limits only on acquisitions in the 1800MHz band. These limits will, as recommended by the ACCC, be set at 2X25MHz. This is unchanged from the limits previously put in place as a result of an earlier 2016 auction process.