Mobile industry lobbies to keep spectrum renewal fees low

Stuart Corner
Tuesday, 14 December 2010 09:23

IT Policy - Government Tech Policy

With the 15 year spectrum licences under which Australia's mobile networks operate coming up for renewal, the Australian Mobile Telecommunications Association (AMTA) has wheeled out a leading economist to lobby the government for 'conservative' renewal fees.

The licences are due to expire at various times between 2013 and 2017 and in March this year communications minister, senator Stephen Conroy, set in train the renewal process saying: "Spectrum licence renewal will be offered to those telecommunications incumbents who are already using their spectrum licences to provide services to significant numbers of Australian consumers, or who have in place networks capable of providing services to significant numbers of consumers, provided they also meet the public interest criteria."

Earlier, in 2009, his department had released a discussion paper with a list of public interest criteria against which the future of the spectrum would be determined: promoting the highest value use for spectrum; investment and innovation; competition; consumer convenience; and determining an appropriate rate of return to the community.

Conroy said: "While each of these criteria is equally weighted, one very important consideration will be price. Accordingly, the Australian Government will seek a fee that reflects the scarcity and value of this important resource.

"The Department will soon be approaching certain stakeholders to commence discussions on the possible renewal of their spectrum licences. Auction of these licences remains an option if I am not satisfied that renewal is in the public interest." Last month Parliament passed the Radiocommunications Amendment Bill 2010 that, Conroy said, would facilitate the renewal process.

In a bid to keep prices as low as possible, AMTA has commissioned Dr Chris Doyle, head of UK consultancy Apex Economics, to produce a report advocating a conservative approach to pricing.

According to AMTA, in addition to producing the report, Doyle is presently in Australia for meetings with senior government officials "to advise on the need for a conservative approach based on economic efficiency when choosing the right spectrum price."
Doyle said: "There is a worry in the current fiscal climate that government may be tempted to set a fee at the higher end of estimates. This would run the risk of inefficiency by causing scaled-back investment and higher customer prices for mobile services.
The knock-on effect would pose a serious risk to digital productivity objectives."

Doyle has an impressive track record in spectrum pricing. In 2003 he was a key member of the team retained by the UK regulator Ofcom to review opportunity cost based spectrum pricing methods and more recently he has been advising Ofcom on its continuing review of spectrum pricing.