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Focus: Digital dividend spectrum reallocation discussion paper released

27 October 2010

In brief: The Australian Communications and Media Authority has released a discussion paper on the configuration and allocation of the spectrum in the 700MHz digital dividend band following the switch-off of analogue television broadcasting. Partner Ian McGill (view CV) and Lawyers Valeska Bloch and Alicia Moody report.

How does it affect you?

  • The configuration of the digital dividend spectrum will impact on potential uses of the digital dividend spectrum, as it will determine the frequency, geographic area, duration and technical framework of the new spectrum licences.
  • The Australian Communications and Media Authority (the ACMA) indicates that it is likely to recommend that the digital dividend spectrum be configured to deploy mobile telecommunications services, and will consider the timing of the digital dividend auction in relation to the auction of the 2.5GHz band.
  • The ACMA intends to allocate the digital dividend spectrum by way of an online auction system.
  • The ACMA envisages achieving international harmonisation with countries in ITU Region 3 (Asia Pacific and parts of the Middle East); however, this is still subject to consultation.
  • Submissions on the discussion paper are due by 6 December 2010.

Background

Analogue television in Australia is being progressively switched off through a staged process, scheduled to be completed by 31 December 2013. As a result of the switch from analogue to digital television signal transmission, significant amounts of radiofrequency spectrum will become available. The digital dividend refers to the benefit of using this freed-up spectrum.

In order to fully realise the benefit of the digital dividend, existing broadcasting services in the UHF band will need to be 'restacked' to clear a contiguous block of spectrum. The spectrum will then need to be configured based on potential uses for the band, before the vacant spectrum can be reallocated. The process of configuration will require the ACMA to determine the optimum licence type, frequency and geographic boundaries for the digital dividend spectrum, and the technical arrangements for using it.

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Realising the digital dividend

On 9 July 2010, the Minister for Broadband, Communications and the Digital Economy released the Australian Communications and Media Authority (Realising the Digital Dividend) Direction 2010, directing the ACMA to clear 126MHz of spectrum in the frequency band 695-820 MHz, known as the 700MHz band. This is the size and frequency of the digital dividend spectrum.

The discussion paper indicates that the ACMA will take three key steps in undertaking this process:

  • the conversion of analogue television broadcasting to digital transmission (switchover);
  • the clearance of a contiguous block of vacant spectrum (restack); and
  • the allocation of the cleared spectrum (reallocation).

The discussion paper focuses on the reallocation process, but also discusses the other two steps.

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Switchover and restack

The progressive switch-off of analogue television broadcasting began in mid-2010, and the Green Paper, released by the Federal Government in January 2010, flagged the Government's intention to restack broadcasting services to enable a contiguous block of spectrum at the upper end of the broadcasting services band portion of the UHF Band V to be freed up for allocation and re-use.

For more information on the impact of restacking and potential uses of the digital dividend considered in the Green Paper, see our Focus: Digital Dividend Green Paper released.

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Reallocation

The first step in the reallocation process is the determination of the optimal licence type, frequency and geographic boundaries for the digital dividend.

Licence type

The Radiocommunications Act 1992 (Cth) permits three types of licences authorising the use of spectrum: apparatus licences, class licences and spectrum licences. Only the Minister is empowered to issue spectrum licences, and must consult with the ACMA and consider any recommendations provided by the ACMA in doing so.

The discussion paper sets out the ACMA's current thinking about the optimal licence type for the digital dividend. The ACMA's likely recommendation is that the Minister specify spectrum licensing as the primary licence type because the characteristics of the 700MHz band make it suitable for building a network over medium to large geographical areas, and because of the flexibility offered by a spectrum licence in planning and operating communications networks.

Frequency and geographic boundaries

The UHF band of the digital dividend spectrum is highly valuable because of its propagation characteristics, which make it particularly useful for the delivery of mobile telecommunications and broadband and fixed wireless broadband. The ACMA indicates its likely recommendation to configure the digital dividend spectrum to deploy mobile telecommunications services, as a result of submissions to the Green Paper, but indicates that it will aim, as far as practicable, to develop technology-flexible frameworks to permit the use of other services in the 700MHz band. The ACMA indicates that it is seeking submissions from stakeholders as to their plans relating to use of the digital dividend spectrum, to assist in packaging the spectrum for sale. The information sought by the ACMA includes the services that interested parties are planning to deploy in the digital dividend band, the technological requirements (in terms of spectrum usage) of these services, the geographic regions and the licence design that would best suit interested parties.

The discussion paper acknowledges that the potential for aligning frequency boundaries with international arrangements is an important consideration. To date, the ACMA has focused its efforts for international harmonisation on countries within ITU Region 3 (Asia Pacific and parts of the Middle East); however, this is also subject to consultation.

Allocation process

Once the optimal licence type, frequency and geographic boundaries for the digital dividend spectrum are determined, the ACMA will develop the process for allocation of the spectrum licences. The ACMA intends to follow the process for allocation set out in Part 3.6 of the Radiocommunications Act. This is a process intended for use when the relevant spectrum is already in use by incumbents who need to be cleared before the incoming users can be allocated the spectrum. Because of the high level of demand expected for the digital dividend spectrum, the ACMA intends to allocate the licences by way of online auction.

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Timing

In each licence area, analogue television services must be switched-off before the restack process can be commenced. Similarly, new spectrum licensees will not be able to operate in the digital dividend band until the restack process has caused the relevant spectrum to be vacated. In the discussion paper, the ACMA indicates its intention to minimise the period in which the digital dividend spectrum is unused by conducting the reallocation process simultaneously with the switchover and the restack process. As a result, the digital dividend spectrum will be reallocated while some parts of the digital dividend spectrum are still in use by broadcasters.

The Minister has stated an expectation that the auction of digital dividend spectrum will occur in late 2012. Impacting on the timing of the auction will be the length of the reallocation period, which is the period within which the ACMA must complete the restacking of the 700MHz band so that the digital dividend spectrum is available for use by the new licensees.

The exact timeframe for the reallocation period will be determined by the Minister, as recommended by the ACMA. The reallocation period must begin within 28 days of the Ministerial determination, and must run for at least two years. The first auction of digital dividend spectrum must occur at least 12 months before the end of the reallocation period. In the discussion paper, the ACMA flags the possibility that the reallocation period will be longer than the statutory minimum because of the complexity of the switchover and restack process.

The ACMA is considering sequencing the timing of the digital dividend auction with the allocation of the 2.5GHz band in 2012-13 and is seeking stakeholder views on the relative merits of this approach versus a separate auction approach.

Before making its recommendation to the Minister on the reallocation period, the ACMA must prepare a draft recommendation setting out the frequency and geographic area of the spectrum to be allocated, and suggesting a reallocation period. The ACMA has indicated that it will undertake wide public consultation on this draft recommendation, before preparing its final recommendation.

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Looking forward

The discussion paper seeks public comment on the upcoming reallocation of the digital dividend spectrum. Submission on the paper are due by 6 December 2010. This consultation is progressing alongside the recently published reviews of the 2.5GHz band and long-term arrangements for electronic news gathering and is likely to be followed by consultation on various other aspects of both the digital dividend and spectrum licence reallocation process.

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