Chapter 1


Chapter 1

Introduction

Conduct of the inquiry

1.1        On 30 September 2010 the Senate, on the recommendation of the Selection of Bills Committee, referred the provisions of the Radiocommunications Amendment Bill 2010 to the Environment and Communications Legislation Committee for inquiry and report by 17 November 2010.[1]

1.2        The bill makes various changes to the Radiocommunications Act 1992 (the Act) relating to spectrum licences.

1.3        The committee advertised the inquiry on its website and in The Australian, and also wrote to a range of relevant peak organisations inviting submissions. The committee received no submissions. As a result, the committee decided not to hold public hearings.

1.4        Although this inquiry received no submissions—an indication that the bill is uncontroversial—the committee notes the concerns about aspects of the proposed policy changes raised in submissions to an April 2009 discussion paper on public interest criteria for reissue of spectrum licences. The committee also notes the House of Representatives debate on the bill on 28 October 2010.[2]

Background to the bill[3]

1.5        In the late 1990s the Australian Government commenced auctioning a number of spectrum licences designed to support a market based approach to licensing the radiofrequency spectrum. The licences had 15 year tenure, flexible conditions and were fully tradeable. Australia was amongst the first countries in the world to issue licences on this basis.

1.6        The first of the key spectrum licences will expire in 2013, with the remainder expiring by 2017. These licences are primarily used to provide 2G and 3G mobile phone and wireless services to millions of Australian consumers. Reissue of the licences is an important and complex issue that will provide ongoing and future spectrum for current and next generation communications services.

1.7        Spectrum licences in Australia can only be issued in specific parts of the radiofrequency spectrum that have been either designated for spectrum licensing under section 36 of the Act, or declared for spectrum licensing under section 153B of the Act.

1.8        Under the Act there is a presumption that when a spectrum licence expires it will be reallocated by the Australian Communications and Media Authority (ACMA) via a price based mechanism (e.g. auction) unless it is in the public interest to do otherwise.[4]

1.9        A licence may be reissued to the incumbent on public interests grounds under either of two circumstances:

  • the ACMA is satisfied that special circumstances exist so that it is in the public interest for the licensee to continue to hold the licence;[5] or
  • the minister has determined a class of services for which reissue to incumbents would be in the public interest, and the licence was used to provide a service that falls within that class.[6]

1.10      The Act gives the ACMA the power to vary the core conditions of spectrum licences that it reissues, even where the licences are reissued to the incumbent.[7]

1.11      As to which licences may be renewed under these provisions, the government has indicated that 'renewal will be offered to those telecommunications incumbents who are already using their spectrum licences to provide services to significant numbers of Australian consumers, or who have in place networks capable of providing services to significant numbers of consumers, provided they also meet public interest criteria.'[8]

1.12      The government has indicated support for the following public interest criteria supported by the majority of stakeholder responses to an April 2009 discussion paper:

  • promoting the highest value use for spectrum;
  • investment and innovation;
  • competition;
  • consumer convenience; and
  • determining an appropriate rate of return to the community.[9]

1.13      The government has indicated the following approach to renewal:

  • any decisions to renew licences will be made considering all the public interest criteria;
  • licences reissued in accordance with the public interest criteria will be subject to an agreement on price;
  • the government will seek a fee that reflects the scarcity and value of the resource;
  • renewal is not a certainty simply because a carrier services a significant customer base; and
  • an auction process remains a genuine option where the minister is satisfied that renewal is not in the public interest.[10]

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