No spectrum for Maori as govt sets timeframe for 4G auction

ICT minister Amy Adams has named a rough date for the government's 700MHz spectrum auction: the third quarter of this year.

Telecom, Vodafone and 2degrees will be among the bidders for the airwaves, which are being freed up by the switchover to digital TV.

The 700MHz spectrum will allow for so-called 4G mobile networks, which would offer much mobile faster internet browsing than the 3G technology used today. It also means more capacity, raising the tantalizing prospect you might actually be able to use your cellphone at a big rugby game, new year's or a concert.

Beads, blankets Digital fund
In a statement, Ms Adams said there would be no special allocation of 4G spectrum for Maori.

There is a kiss-off for iwi, in the form of a new $30 million information, technology and communications development fund  development fund, to be "focused on the way government can assist Maori leverage the potential benefits from new technologies, and promote and support the language and culture in a digital world."

For now, the government is merely "investigating" whether to throw money into the fund. Translation: behave and you'll get the cash.

It will now be a matter of wait-and-see in terms of whether the fund will be enough to peel away support from WAI 2224 - a claim on spectrum under Article Two of the Treaty of Waitangi.

Although widely ridiculed, the claim has been given legs by dint of support from the Maori Council and, more keenly, the Maori Party - giving it leverage with coalition partner National.

The last major auction of airwaves, held by Labour in 2000, saw 3G spectrum reserved for the Hautaki Trust, which in turn parlayed the spectrum for a minority shareholding in the US-controlled 2degrees (which controls that spectrum today).

Telecommunications Users Association head Paul Brislen says that was at least a clean solution. "Perhaps a chunk of spectrum could have been given to the [Hautaki Trust in order to shore up its shareholding in the company that runs 2degrees, thus ensuring strong competition from our newest telco," he wrote in s snap reaction piece this afternoon.

Instead, the government has opened the auction to a challenge to the spectrum sale through the courts and potentially the Tribunal itself, Mr Brislen says.

"That could delay the auction."

Or it might not. Peviously, we've seen the government win over The Maori Party to support the Ultrafast Broadband (UFB) and Rural Broadband Initiatives (RBI) through the establishment of the vague but well-manned Nga Pu Waea - mollifying anger over the Maori-backed Torotoro Waea consortium losing the RBI tender, and allowing National to push ahead with the twin fibre schemes without the full support of ACT.

Little detail
Mr Brislen's lobby group has previously pushed for creative solutons such as spectrum going free to a telco that pledged an immediate rollout - particularly in rural areas.

Instead, there's not such "beauty contest" element. The government is going for what he describes as a straightfoward auction - at least as far as he can tell.

Mr Brislen complains that although we now have a broad timeframe, and the government says it will hold the auction according to the Asia Pacific Telecommunity band plan, "There's no word on how many [spectrum] blocks there will be, how big they'll be or indeed how the auction will run."

2degrees holding out for hand out
With detail of the auction still vague, 2degrees seems to be holding out hope it will get a chunk of auction at a special price (or a "fair price" as it has previously termed it).

“It’s important that this spectrum is allocated at a price, and with conditions, that promote competition and investment in the transition to 4G services. We look forward to seeing the proposed detail of the allocation – including the reserve price - over the coming months which we hope will ensure all three players can continue to compete actively for kiwis’ business," CEO Eric Hertz said in a statement this afternoon.

As in interesting footnote, Mr Hertz added that 2degrees bought a 1800MHz block of spectrum from Telstra for $15 million (Vodafone proposed selling some of TelstraClear's spectrum be made available to other market players last year as it announced it had entered an agreement to buy Telstra's NZ subsidiary, heading off likely Commerce Commission qualms on that front.)

UK 4G auction disappoints
Results of the British 4G spectrum auction came in overnight.

The government raised a total of £2.34 billion, less than the anticipated £3.5 billion.

Lower bids mean less for Crown coffers, but also more money in the pot for phone companies to (hopefully) spend on their networks, hopefully leading to lower cost 4G data plans.

A figure of $200 million has been bandied around for the NZ 4G spectrum auction (and I think we can already guess where $30 million of that is going), but today Ms Adams told NBR ONLINE she was still seeking expert advice on he amount that could be raised.

A starry-eyed government report earlier claimed there would be $2.4 billion in flow-on economic benefits from the move to 4G.

Telecom, Vodafone to go early?
The 4G auction has suffered a series of delays, perhaps tied to National's need to keep the Maori Party onside (it was originally scheduled for late last year), although we have also seen 2degrees angling for a special allocation to help it compete against the spectrum-rich Telecom and Vodafone, and Kordia argue for a special allocation for emergency services.

In any case, 700MHz spectrum won't be completely freed up until the digital TV switchover is completed late this year.

Last week, Telecom formally launched a 4G trial, involving a number of companies, and utilising 1800MHz and 2100MHz spectrum (which can also be used for 4G - although CEO Simon Moutter has told NBR that 700MHz is the most economically efficient option). However, the company has also said it has not allocated capex for a wider rollout this financial year, ending June 30. But from July 1, it'll be interesting to watch.

Vodafone has also run trials. There is speculation the carrier will launch a 4G service soon. The company has only said to NBR that 4G is important to its future.
 

RAW DATA: Amy Adams statement

Next-generation mobile technology a step closer

Communications and Information Technology Minister Amy Adams has confirmed that it is the Government’s intention to allocate the digital dividend radio spectrum in the third quarter of this year.

The allocation of the 700 MHz band of spectrum will allow the building of fourth generation (4G) mobile networks using the spectrum freed up by the switchover to digital television, enabling mobile broadband speeds up to ten times faster than today’s speeds.

Cabinet has agreed that the spectrum will be allocated through an auction, and that the spectrum will be organised in blocks according to the Asia Pacific Telecommunity band plan. Using this band plan will give New Zealanders access to a wide variety of phones and equipment.

The exact design of the auction will be confirmed in the next few months following technical consultation, and the reserve price informed by independent expert advice.

The reallocation of the 700 MHz band of the radio spectrum is a once-in-a-generation opportunity, Ms Adams says.

“Indications are that by using the spectrum for 4G mobile networks, we can expect economic benefits for New Zealand of up to $2.4 billion over the next twenty years.

“The use of mobile broadband services is growing at an enormous rate in New Zealand. Fast, reliable access to mobile broadband is enabling improvements in productivity and ease of business, and providing new applications for consumers.”

The Government has also confirmed that no specific allocation of 4G spectrum will be set aside for Māori stakeholders. Instead, the Government is investigating the establishment of a $30 million ICT development fund, focussed on the way government can assist Maori leverage the potential benefits from new technologies, and promote and support the language and culture in a digital world.

“The Government recognises the importance of Māori having opportunities to participate in the ICT sector, however, in keeping with the view of successive governments that spectrum is not a taonga, in our view it does not follow that Māori require further spectrum to be set aside in order to meet our shared objectives of the protection of language and culture.”

The establishment and final form of the fund will be considered by Cabinet following the successful completion of the auction.


Question and Answers

Will the new networks be rolled out to rural areas?

As part of the Rural Broadband Initiative (RBI), the Government has ensured that all new towers built under the RBI are 4G-ready and that new 4G services will start to be deployed in rural areas as they are deployed in urban centres.

Will I need a new handset when the new mobile technology becomes available?

To take advantage of the new 4G technology, a new handset or device will be required but older devices will continue to work while existing networks are maintained.

Mobile operators are expected to roll out new 4G networks alongside their old 2G and 3G networks.

When will the 700MHz spectrum band be available?

The 700 MHz spectrum band will be available following the switchover to digital television. The switchover is scheduled to finish on 1 December 2013. The Government intends new rights to the spectrum to commence in January 2014, but rights-holders may be able to negotiate early access to the spectrum.

The Government has already provided some temporary licences to enable mobile operators to test 700 MHz band services.

How does New Zealand compare with its neighbours for access to these new technologies?

The decisions announced today means New Zealand is on track to be one of the first in the region to clear and reallocate the 700 MHz band for new uses and technologies.

Australia is likely to auction rights to their 700 MHz band before New Zealand, however, the spectrum in this band is unlikely to be available for use before mid-late 2014.

While some countries in the Asia-Pacific region have started to launch 4G services in other spectrum blocks, the 700 MHz band will be integral for deploying widespread services beyond major cities.

How does the selection of the Asia Pacific Telecommunity band plan align with international developments?

The Asia Pacific Telecommunity band plan has been adopted by the International Telecommunications Union.

Countries that have already committed to or are likely to adopt the band plan include Australia, Japan, Korea, India, South America and the United Arab Emirates.

Europe is also likely to consider options to enable compatibility with this band plan as part of their second digital dividend in a few years.

By aligning with the APT band plan, New Zealand has further potential to tap into larger economies and access a wide variety of handsets and network equipment at lower cost.

Has any spectrum been set aside for an emergency services mobile broadband network?

The emergency services providers have now indicated they prefer spectrum in the 800 MHz band, to better align with international developments. The exact needs will be considered at a later date.