Communications Minister Malcolm Turnbull has released a draft ministerial direction to the Australian Communications and Media Authority which would ask it to license some of the broadcast spectrum in the 3.5 GHz range to NBN Co, allowing it to connect outer suburban areas using fixed wireless technology.
Fixed wireless will allow NBN Co to connect areas on the fringes of major cities much sooner and at a lower cost to taxpayers than it could with optical fibre. The draft direction would require ACMA to complete the process by April 30, 2015, and is open for consultation until September 22.
NBN Co’s Fixed Wireless and Satellite Review, released in May, notes that:
“Although NBN Co holds 2.3GHz and 3.4GHz spectrum rights in regional areas, Optus holds the same spectrum in metro areas and the surrounding metro fringe which extends a significant distance from each city. As alternative spectrum has not been secured, NBN Co has a spectrum gap in the urban-fringe zone around Canberra and the five mainland State capital cities.”
About 80,000 premises are affected by NBN Co’s spectrum gap. According to the review, if these urban fringe areas had to be served with optical fibre, they would not be connected until the later stages of the rollout and NBN Co would incur hundreds of millions of dollars in extra costs.
In the draft, Turnbull also directs ACMA to figure out an amount of tax that would reflect a “market price” for the spectrum rights, because NBN Co would not be competing against other bidders in an auction process.
In regard to determining the spectrum’s value, a statement accompanying the draft direction explains:
“In determining a market price for the particular apparatus licences, it is worthwhile to note that in the Radiocommunications (Spectrum Access Charges) Direction 2012, the then Minister specified $0.03/MHz/population of a licence area as being the amount he considered to be the value of the spectrum in relation to any spectrum licences issued for the 3.4 GHz parts of the band (3425–3492.5 MHz and 3542.5–3575 MHz). In reaching that conclusion, the Minister was informed by way of expert advice from a leading international firm, an inter-Departmental Evaluative Committee as well as consultations with licensees.”
NBN Co’s use of the relevant part of the spectrum would affect amateur radio enthusiasts who currently use it, but an ACMA spokesperson said the regulator would work to find an alternative for them.