New auction proposed for WiMax-suitable radio spectrum

By NZPA

Thursday 31st May 2007

A new proposal for the auctioning of radio spectrum suitable for WiMax wireless broadband services will fast-track the rollout of the technology, Communications Minister David Cunliffe says.

The Government had proposed the auction of spectrum for the 2.3 GHz band this month but announced a fortnight ago it had deferred the process while submissions on the proposal were considered.

Cunliffe today announced the 2.3 GHz spectrum auction was being combined with one for 2.5 GHz, which was being brought forward, and would be held in December.

It seemed likely WiMax-type equipment would be widely available in both frequency bands within a year, so it made sense to look for a faster overall expedited allocation process, Cunliffe told the Telecommunications Users Association's (Tuanz) conference in Wellington.

It was expected the process would lead to about six nationwide blocks of spectrum being available, along with space for local and regional players such as iwi and local government initiatives.

A strict acquisition limit would be in place so no one player could own more than one nationwide set across both blocks of spectrum, and use-it-or-lose-it provisions would apply to deter spectrum hoarding, he said.

Making so much spectrum available at any one time meant the auction would not maximise revenue for the Crown.

"That is deliberate. It is a roll-out maximising policy to accelerate the provision and use of wireless broadband."

Cunliffe also assured today's conference that he was determined to see a robust separation of Telecom implemented as soon as practicable.

The Government said in December it wanted Telecom to split into three units --- network, wholesale and retail operations.

Telecom said this was too costly and impractical and put up an alternative of selling its network assets to the Government or private investors.

Today, Cunliffe said submissions sought on Telecom's proposal had been largely consistent. Structural separation, while seen as having some potential advantages, must not divert the Government from implementing operational separation and ensuring robust equality of access.

Officials would report to him soon on the submissions, but in the meantime the process for operational separation continued with further advice expected from Ministry of Economic Development officials "in the reasonably near future".

That did not rule out some form of structural separation.

"But we must be confident that any form of structural separation better meets the objectives of the (Telecommunications Amendment) Act and is overall better for New Zealand," Cunliffe said.

"Consideration of structural separation must not be allowed to derail or unduly delay the operational separation process."

In April, Telecom said the Government's separation plans would limit its ability to invest in infrastructure and it said if the plan went ahead it would invest only $500 million of the $1.5 billion needed to upgrade the nationwide copper phone network.

Telecom chief executive Theresa Gattung, entering her last month in the job, repeated that theme.

But Cunliffe told the gathering he continued to expect significant new investment, from Telecom and from other industry players, to flow as a result of the reforms.

"Unlike some, but interestingly, not some other, members of the Opposition, I will not seek to crowd out this investment with untimely prognostications on taxpayer contributions."

Another step taken by Cunliffe today was the naming of the successor to Telecommunications Commissioner Douglas Webb, who leaves the position in July.

His replacement is New Zealand lawyer Ross Patterson, now working at Sydney firm Minter Ellison Lawyers where he heads the competition and regulatory practice.

Patterson has a PhD in commercial law, and is president of the Australia New Zealand Business Council. His appointment is for five years.

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