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UPDATED: Senator Conroy sets the scene for 700 MHz spectrum auction

UPDATED: Senator Conroy sets the scene for 700 MHz spectrum auction

Price set, and limits increased but Optus says 'unworkable'

Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, has issued directions to the Australian Communications and Media Authority (ACMA) on the settings for the digital dividend spectrum auction.

The ACMA is responsible for conducting the auction, which takes place in April next year, and will soon call for applications.

Conroy directed the ACMA to set the reserve price for 700 megahertz (MHz) spectrum at $1.36 per MHz per population. In setting the price, he said that the Government took on board “expert advice” and consulted with relevant agencies, including the ACMA.

He has also directed an increase to competition limits from two times 20MHz to two times 25MHz for spectrum in the 700 MHz band. This is consistent with advice from the Australian Competition and Consumer Commission (ACCC), and Conroy believes that it will provide a competitive bidding environment.

“These directions provide certainty for industry and confirm that the ACMA will proceed with the auction in April 2013,” Conroy said.

He added that it ensures the best outcome and pair price for industry, consumers, and the Commonwealth.

“This spectrum is seen as the ‘waterfront property’ of spectrum and the Government has made a significant investment to free it up. It is important that we get a reasonable return on this valuable public asset.”

However, Optus has initially rejected the announcement as "unworkable and out of line with international outcomes", according to Vice-President, Corporate & Regulatory Affairs, David Epstein, In a statement Epstein said:

  • The reserve price announced is effectively double the basket of outcomes achieved in comparable advanced economies over the past two to three years.

  • It is likely to have the effect of restricting investment significantly, raising prices as costs are passed through to consumers and reducing consumer choice.

Follow Nermin Bajric on Twitter: @nermin_au

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