On 14 December 2012, directions from the Minister for Broadband, Communications and the Digital Economy on the digital dividend auction requires the ACMA to:
- set the reserve price for lots in the 700 MHz band at $1.36/MHz/pop
- set the reserve price for lots in the 2.5 GHz band
- commence the auction no later than 30 April 2013.
In the directions, the minister also:
- increased the competition limits for the 700 MHz band from 20 MHz paired to 25 MHz paired
- amended the definition of ‘associate’ by removing the term ‘business partner’ and clarifying the types of agreements to be covered under ‘relevant agreements’.
The ACMA is required to implement these directions and will include them in the auction rules that form part of the Applicant information package (AIP).
You can view the directions from the Comlaw website:
For the reserve prices and auction date:
- Australian Communications and Media Authority (Allocation Procedures—Reserve Prices) Direction No. 2 of 2012
For the competition limits and definition of ‘associate’:
- Radiocommunications (Spectrum Licence Limits) Direction No. 1 of 2012 (Amendment No. 1 of 2012)
- Radiocommunications (Spectrum Licence Limits) Direction No. 2 of 2012 (Amendment No. 1 of 2012)
The minister has directed the ACMA to set the reserve price for lots in the 700 MHz band at $1.36/MHz/pop.
The direction specifies the reserve price as a unit amount in $/MHz/pop, which the ACMA must apply—based on the size in MHz of each lot and the population of the geographic area—when determining a starting price for each lot in the 700 MHz band.
The direction also requires the ACMA to set the reserve price for lots in the 2.5 GHz band.
The ACMA intends to announce the reserve price for lots in each of the bands, as well as the lot ratings and the dollar value of each eligibility point, in January 2013.
In setting the reserve price, the minister has been mindful that the relevant spectrum is highly valuable and that it is important for the evolution of mobile networks in Australia. The 700 MHz and 2.5 GHz bands have been harmonised internationally for the use of long term evolution technology.
The minister has also taken into consideration expert advice on the value of the spectrum and has been guided by the objectives of the Radiocommunications Act 1992. The minister has decided that it is appropriate to direct the ACMA on the reserve price for the 700 MHz band and for the ACMA to be responsible for setting the reserve price for the 2.5 GHz band.
The minister has directed the ACMA to commence the auction no later than 30 April 2013.
We have reviewed the time required to implement the minister’s directions and to deliver the auction. The revised auction timeline indicates that it will commence on 16 April 2013.
To enable prospective bidders to get a head start on their auction preparations, the ACMA will publish the following elements of the AIP before Christmas:
- allocation instruments and the accompanying explanatory statements
- technical instruments and the accompanying explanatory statements
- application form
- deed of acknowledgement
- deed of confidentiality
- deed of financial security
- statutory declarations for the purposes of sections 4.9 and 4.12 of the allocation determination
- statement form for the purposes of section 6.3 of the allocation determination.
The instruments and the accompanying explanatory statements will be registered on the Federal Register of Legislative Instruments on 20 December 2012.
The minister has amended his direction to the ACMA on the maximum amount of spectrum any bidder can acquire in the 700 MHz band.
The amended competition limits are 2×25 MHz paired in the 700 MHz band. Previously, the limit was 2×20 MHz paired. The competition limits for the 2.5 GHz band remain unchanged at 2×40 MHz paired.
The minister has imposed competition limits to prevent the spectrum being monopolised. The quantum of the competition limits has been amended to enable greater flexibility in terms of different market scenarios, without precluding a new entrant. The amended limits will continue to ensure an appropriate balance is maintained between competition in the downstream markets and economic efficiency.
Definition of ‘associate’
The minister amended the definition of ‘associate’ by removing the term ‘business partner’ and clarifying the types of agreements to be covered under ‘relevant agreements’.
In amending the definition, the minister considered the submissions the ACMA received in response to consultation on the draft auction rules. The minister has also consulted the ACMA on the intended scope of the term ‘associate’.
Further information on the definition can be found in the direction and the explanatory statement.
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