Spectrum for Maori – hand it over says Tex

On the face of things, and in fact from any angle, the WAI 2224 Treaty Claim on spectrum seems a hard sell.

Radio waves weren’t utilised in pre-colonial times and it was quite some time before the first Motorola handset came on the scene. But the Te Huarahi Tika submission on the government’s forthcoming spectrum auction makes a pragmatic point.

The last major spectrum auction was in 2000, when the government auctioned off 3G airwaves.

The fourth Labour government’s special allocation of 25% of 3G-friendly spectrum to iwi helped shake up the mobile market and usher in a new era of competition, the pan-tribal Te Huarahi Tika argues. Through its commercial arm, Hautaki Ltd, the trust parlayed its spectrum into a stake in NZ Communications, the company that became 2degrees.

The results have been pretty mixed for Hautaki. 2degrees has yet to make a net profit (although it turned ebitda positive last year). And Hautaki has gone millions into hock to US company Trilogy International Partners in its bid to keep up with new rights issues. It still hasn’t been able to buy enough of the new shares to prevent its holding being diluted. And the Seattle-based Trilogy now owns a majority of 2degrees and that spectrum.

But there is no doubt the average consumer, or business, is better off for 2degrees’ presence in the market.

2degrees founder Tex Edwards sees no problem repeating the manoeuvre with the 4G auction.  “Why wouldn’t the Ministry of Business consider an allocation to pan-Maori interests in a similar fashion to the 2100Mhz [auction],” he tells NBR. “It’s a well-worn path to solving their claims and Maori have developed their 2100MHz spectrum into a meaningful asset for all of New Zealand.”

Regardless of the merits of using a Treaty of Waitangi claim to goose competition, it doesn’t look as though the government will go down that path. The WAI 2224 claim has been a key reason for delays to the 4G auction, which was originally scheduled for late 2012. The claim – and by extension a special 4G spectrum allocation – has been given oxygen by dint of support from National’s governing partner, the Maori Party.

In February ICT Minister Amy Adams announced there would be no special allocation of spectrum before the auction.  And it’s a development the Maori Party seems happy to live with. The beads and blankets trade-off is a $30 million technology fund for iwi.