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Title

Spectrum auction another Labor bungle

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07-05-2013

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2427093

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7 May, 2013

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Spectrum auction another Labor bungle



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THE HON. MALCOLM TURNBULL MP FEDERAL MEMBER FOR WENTWORTH SHADOW MINISTER FOR COMMUNICATIONS AND BROADBAND

7 May 2013

Spectrum Auction Another Labor Bungle

Today's results from the 'Digital Dividend' auction reveal only $2 billion has been raised from the sale of radiocommunications spectrum - $1 billion less than the Gillard Government's target.

The Government's latest failure to reach a revenue goal comes despite the extraordinary intervention by Communications Minister Stephen Conroy in December, when he set an unprecedented reserve price for the 700Mhz spectrum.

Yet again, Labor has failed against a key fiscal target it set for itself.

And yet again, the end result will be more public debt.

The revenue shortfall is merely the latest in a lengthy series of missteps and bungles.

The Digital Dividend auction (which involves the sale of license over spectrum freed by the switch to digital TV, which will be used for next-generation 4G mobile services) was originally due to take place by November 2012.

But in June 2012 the Government announced the auction would have to be pushed out to April 2013 to allow more time for preparations.

Then in December Senator Conroy set a reserve price for the 700 Mhz spectrum that was extremely costly by global standards - sacrificing the long-term economic benefits of a more competitive and robust mobile telecommunications market in favour of near-term revenue to prop up Labor's pursuit of a Budget surplus, only for the Prime Minister and Treasurer to summarily dump that objective barely a week later.

When Senator Conroy realised there was a chance nobody might turn up to his auction , he fiddled with the process yet again, switching the maximum block size bid from 2x20Mhz to 2x25Mhz in an attempt to extract more cash from the telcos.

Given the politicised management of the spectrum sale up to now, it is welcome that the Government plans to make a clear commitment regarding the one third of the 700 Mhz spectrum that was not sold.

While Senator Conroy's intervention in the auction process means Digital Dividend spectrum worth $1 billion that belongs to taxpayers is left on the shelf, winning bidders are entitled to expect that the unsold spectrum not be brought back to market in the near-term.

ENDS

Media Contact: Jon Dart 0457 999 879