Australia: Spectrum reform: Consultation progresses...

Last Updated: 22 May 2017
Article by Angela Flannery

Most Read Contributor in Australia, August 2018

Radiofrequency spectrum is essential infrastructure, necessary for the delivery of broadcasting, telecommunications and many other services. Use of spectrum in Australia is currently regulated by the Australian Communications and Media Authority (ACMA) under the Radiocommunications Act 1992 (Cth).

In May 2014 the then Minister for Communications, now Prime Minister, Malcolm Turnbull announced a review of Australia's spectrum policy and management framework. This framework is over 20 years old and is no longer fit for purpose, given the rapid changes in the communications sector. That review, undertaken by the Department of Communications and the Arts and ACMA, concluded that the current framework has substantial deficiencies. The review made 3 core recommendations, as set out in a May 2015 report, namely that:

  1. The current legislation should be replaced with outcomes focussed legislation, that facilitates timely allocations, greater flexibility in the use of spectrum (including by allowing sharing and facilitating transfers) and improved certainty.
  2. The management of broadcasting spectrum, currently largely dealt with in the Broadcasting Services Act 1992 (Cth) (BSA), should be incorporated in the framework. In addition, better integration of public sector agencies should be provided for, including by requiring reporting of their spectrum holdings and allowing those agencies to lease, sell or share that spectrum.
  3. Spectrum pricing arrangements should be reviewed to make these both consistent and transparent. This would support efficient use of spectrum and facilitate secondary markets.

The review supported a rewrite of the existing legislation to address these issues and also to simplify and streamline the regulation, including by the adoption of a single licensing system to replace the 3 categories of spectrum, apparatus and class licences.

The Government announced its agreement to implementation of the recommendations of the review in August 2015. As a next step, in early March 2016, the Government released a Legislative Proposals Consultation Paper on its proposed approach to the rewrite of the legislation. Consistent with the review recommendations, that consultation paper noted that the approach of the new draft legislation would be to:

  1. Simplify regulatory structures for planning, licensing and equipment regulation.
  2. Streamline regulatory processes.
  3. Clarify the roles of the Government and ACMA, and also spectrum users.
  4. Bring broadcasting spectrum into the general spectrum framework.
  5. Provide for graduated and proportionate enforcement and compliance tools.

A further year has passed since that consultation closed and the Government has now released a partial exposure draft of the Radiocommunications Bill, together with consultation papers on broadcasting spectrum, transitional arrangements, spectrum pricing and Commonwealth held spectrum. The theme of the draft Bill and consultation papers remains consistent with the recommendations of the review, with a focus on modernising and simplifying Australia's spectrum management framework. Key points include:

  1. As expected, the draft Bill provides for a move to a single licensing system. ACMA will design and implement this system. Licences will be able to be issued in response to written applications, where the Minister provides a direction to issue or in accordance with a licence issue scheme established by ACMA. Class licences will be replaced with a spectrum authorisation mechanism allowing particular transmitters to be used for particular purposes on specified terms.
  2. The maximum term of a licence will be extended to 20 years. Licensees will have more certainty in relation to renewal, with licences required to state whether there is a right to renewal (or no right of renewal) or whether renewal is within the discretion of ACMA.
  3. The Minister's role will be strategic, without involvement in operational decisions. The Minister will set strategic priorities to guide ACMA in its spectrum management regulatory functions, and will also have direct oversight of decisions with significant public policy implications.
  4. The regime for broadcasting spectrum is likely to remain fairly complex. Proposals that are being consulted on include abolishing the broadcasting services band (BSB) concept, with ACMA to have responsibility for spectrum designations and high-level planning decisions. In making decisions, ACMA will be required to take into account objects and criteria similar to those in section 23 of the BSA. The decision on the licence fees that will be paid by broadcasters has already been made by the Government, as announced as part of the proposed media reform package (see here).
  5. ACMA will be required to publish an annual 5 year spectrum management work program. It will need to undertake consultation with both the Minister and the public in respect of each plan. It is hoped this will improve transparency, as stakeholders will have visibility of ACMA's priorities and ACMA's proposed spectrum planning and other decisions processes.
  6. On pricing, the Government is currently proposing that ACMA should publish guidelines on its approach to pricing, the Government and ACMA should "endeavour" to charge users of similar spectrum the same rate and reasons should be published if fees are determined other than by auction or an administered pricing formula.
  7. It is currently proposed that a "hybrid" approach will be adopted to transition, allowing the elements of the new regime to be implemented over a 5 year period. Ultimately, ACMA will be responsible for implementing transition.

The Australian Competition and Consumer Commission is likely to be disappointed with the powers given to it under the Bill. The Bill provides for ACMA to consult with the ACCC on competition limits, but does not give the ACCC the more extensive rights it suggested might be appropriate in its recent draft decision on the declaration of mobile roaming services (see here).

Public submissions are due by 30 June 2017. The Government will also conduct sessions for interested stakeholders, explaining the draft Bill and the associated consultation papers before the completion of the consultation period.

ACMA has released additional material on these proposals. ACMA's material is intended to provide information on how ACMA believes the Bill would operate (if it is passed by the Parliament).

Finalisation of the reform – and the introduction of the new legislation into Parliament – will not occur for some time. The Government will issue another exposure draft for consultation before the legislation is introduced into Parliament. As noted above, transition to the new regime may take up to 5 years.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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