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Thursday, 28 October 2010
Page: 2011

Mr TURNBULL (10:59 AM) —The Radiocommunications Amendment Bill 2010 was first introduced into this House on 16 June. On 30 September the Senate referred the bill for inquiry and report on 17 November this year. In the late 1990s the Australian government commenced auctioning a number of spectrum licences to support a market based approach to the licensing of radio frequency spectrum. As we know, spectrum is a valuable but finite resource; however, it is instantly reusable. Spectrum licences provide explicit and continuing rights of access to defined parts of the radio frequency spectrum in defined geographic areas for a stated period—normally 15 years. Although there has been limited use of these provisions, spectrum licences are also fully tradeable and can be shared through third-party authorisations.

Australia was among the first countries in the world to issue licences on this basis. Today, many of these licences are being used by telecommunications carriers to provide mobile phone and wireless access services to millions of Australians. The first of the key spectrum licences will expire in 2013, with the remainder expiring by 2017. Because Australia was an early adopter of auctions as a means of allocating spectrum, there is relatively little international experience on the best approaches to spectrum licence reissue.

On 4 May 2010 the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, announced the Australian government’s approach to the reissue of current 15-year radio frequency spectrum licences. In April 2009, the Department of Broadband, Communications and the Digital Economy issued a public discussion paper, Public interest criteria for reissue of spectrum licences. In May this year the department commenced information gathering discussions with a number of spectrum licence holders to inform decisions on possible spectrum licence renewal.

The coalition is in broad agreement with the industry and the government that the majority of the amendments proposed in this bill will lead to greater efficiencies in the issuing of spectrum licences; however, key experts in the industry are concerned with aspects of the amendments, particularly around the coexistence of class and spectrum licences. The first concern relates to the value of a shared spectrum asset. The bill’s explanatory memorandum states:

New and developing technologies have the potential to greatly increase the technical and productive efficiency of spectrum use. These new technologies may be authorised by the ACMA under class licences. Such technological developments will potentially allow devices to share spectrum by utilising a variety of technically sophisticated methods to avoid harmful interference with other services and will be subject to the ACMA being satisfied that:

  • unacceptable levels of interference will not occur to the operation of radiocommunications devices operated, or likely to be operated, under spectrum licences; and
  • it is in the public interest to issue class licences, in spectrum designated or reallocated for spectrum licences, to authorise devices with the new sharing technology.

These changes impact on dozens of telecommunications carriers who provide mobile phone and wireless access services to millions of Australians. Wireless services are what people are gravitating to in great numbers and they are growing at around six or seven times the rate of fixed line services. The market has strong demand for wireless, particularly wireless data services.

The carriers who are servicing this growing demand invest very significant capital for the exclusive but highly competitive use of licensed spectrum, and permitting other users to access that spectrum dilutes the value of these assets. The bill and the explanatory memorandum fail to provide certainty for these carriers about how their assets will be valued if class licences proceed and spectrum is shared.

The industry’s other main concern is that the bill does not go far enough to clarify what is or is not unacceptable interference and how ACMA will manage that interference. The Australian Mobile Telecommunications Association is the peak industry body representing Australia’s mobile telecommunications industry. AMTA is concerned about the terms and conditions of reissued spectrum licences that would permit other uses encroaching on the licensed spectrum assets held by its members. The main issue is that there is a high level of anxiety about possible interference. AMTA summarises the concerns of its members as follows: there is not a sufficiently clear framework of principles and procedures for ACMA to follow when determining what qualifies as unacceptable interference in spectrum that a carrier has purchased; there is no simple mechanism to measure, manage or rectify adverse outcomes of coexistent use; and if adverse impacts occurred, the business impact on the primary licence holder could be significant and long lasting. According to the minister’s second reading speech:

Incumbent licensees have consistently called for greater certainty about licence reissue.

Without such certainty it is claimed that there will be a reluctance to maintain investment in infrastructure and service provision with potential adverse impacts on coverage and service quality.

The government is correct in pointing out the importance of certainty but these two concerns I have raised need to be resolved to provide the certainty that the industry needs before making substantial investments in spectrum, and I respectfully encourage the Senate committee currently conducting its inquiry to look very closely at these matters.

I would also seek to draw the attention of the House, and indeed of the Senate committee, to the changes the bill proposes to make to certain ministerial determinations making them no longer disallowable instruments. The bill amends the act concerning written directions by the minister to ACMA about determinations made by ACMA regarding spectrum access charges. The amendment will specifically provide that such a direction is not a legislative instrument, according to the explanatory memorandum which says:

The intention of this amendment is to protect commercially sensitive pricing information relating to the reissue of 15 year spectrum licences. By giving a written ministerial direction to the ACMA … which is not a legislative instrument and not subject to disallowance, it will protect this information during licence reissue discussions.

Removing parliamentary oversight on ministerial decisions is always a very serious decision for a parliament to make. I look forward to the Senate inquiry and report which I hope will clarify why the government thinks it needs to take this step.

There is no doubt that there is a lot happening in the spectrum space at present. I note that ACMA last week released a discussion paper which aims to provide stakeholders with background information on the digital dividend reallocation, including its close relationship with broadcasting planning, and the proposed steps for the reallocation, both legislative and technical. This consultation offers industry stakeholders the opportunity to shape and inform ACMA’s thinking at an early stage about various aspects of the upcoming digital dividend allocation.

The coalition understands that this area of communications policy is moving very rapidly. We are not interested in delay. As I said earlier, the growth of broadband wireless subscriptions has gone literally off the chart—they have been growing at a much faster rate than anybody expected—and of course the 4G and LTE wireless technologies coming down the track very soon will allow much greater speeds and make wireless an even bigger connectivity competitor. We have moved from an era, not very long ago, when most people would have regarded a fixed line as a necessity and a wireless mobile device as an optional extra. We now have more wireless devices than we have fixed line connections, and increasingly wireless connectivity is becoming the necessity and fixed line is becoming an option that people choose not to take up at all—hence the continuing and accelerating decline in fixed line connections. Wireless spectrum is right at the heart of the information revolution. I note in the context of the debate about broadband that in the United States the focus on greater broadband connectivity is very much directed at the opportunities which 4G and LTE wireless technology offer for ubiquitous, affordable and fast broadband.

We are not interested in delaying this legislation. We have put forward some concerns that have been raised by the industry. I trust the Senate committee will look at them very carefully. We are concerned to ensure that the carriers, the industry, the investors and above all the consumers get the certainty they need to continue to supply and receive better wireless services. We look forward to the report from the Senate committee and we hope the findings of that inquiry will take into account the matters I have mentioned. It may be that there will be some amendments moved in the Senate to reflect these concerns and the conclusions of the Senate committee. Subject to the reservations I have outlined, I commend the bill to the House.