Commspace, Worldnet, KC Internet and PlaNet

Submission from principals of WorldNet, KC Internet, PlaNet and Commspace to MED in respect Of 2.3 & 2.5GHz frequency allocation December 2007

Background

This submission is made on behalf of the above cooperative of companies, the latter of which, Commspace, is a jointly owned by Alan Marston and Thomas Lee and which was established 20 months ago specifically for the purposes of researching, building, maintaining and improving a locally owned nationally provided wireless broadband service as an alternative to the ADSL monopoly-owned and controlled service of Telecom NZ. The tone and tenor of the below submissions needs to be contexed within a commercial environment that has for 12 years and to this day penalises all users and suppliers of internet/data services in NZ excepting Telecom and which despite recent Government regulatory moves it is apparent from the discussion document on the issue in question that the NZ Government still has not questioned the terminological axioms upon which the internet (and other businesses) function in NZ and which invisibly are setting the agenda to the detriment of all but an extreme minority. These contextual axioms are:

• Public goods are `scarce assets’
• The supply of internet and other data services is just another `market’
• Government must be `efficient’
• Cooperation is seen as `collusion’ against the optimal condition, `competition’
• Investment is all about money

The terms asset, market and efficient were coined by and are exclusively applicable to commerce and revolve around the commodification of language which in turn makes bottom-line accounting the final arbiter. We respectfully submit that public goods, which in this case is radio spectrum frequency rights, are not scare assets to be sold to the highest bidder but are to be allocated as abundant public goods for public good. That duty of care for the greater good is the bottom line of government not exclusively the commercial gain of this or that privately owned company or the gain of the government’s own financial accounts. That health and well-being is the currency of government which includes but is not restricted to commercial measurement standards and practises. That cooperation is not the resort of the unviably weak colluding against the strength of self-reliance but on the contrary is a far more evolved relationship than survival of the rich by financial competition. That investment is not to be equated with finance where equity-partners `cooperate’ to buy/sell `assets’ but is instead also and mainly about human skill, effort and enterprise within a social boundary and environment.

It is in the above context that the following submission has we believe the force of reason on its side.

Q&A

The discussion paper states some policy which it is implied are not debatable. We question this. Then the paper gives some specific questions which it implies need to be answered by the submitter, which we do where we feel and answer is required.

First, in respect of policy, we submit that there are no technical reasons to greatly limit spectrum allocation and that policy therefore needs to accept the fundamental fact that there is enough spectrum for all those who can demonstrate that they have a need for it to further the provision of internet and data services on a case-by-case model AS IS DONE NOW for local spectrum licenses. In short, remove the concept of scarcity (which is false) which latter is exploited by `owners’ to maximise commercial gain and minimise cooperation. On this basis we question the assumption that an auction is necessary at all, but if the Government is to proceed to auction of spectrum, that this auction does, as suggested in the discussion paper, restrict one company – and its affiliates and associates – to one frequency band each and that if there is `over-subscription’ then more bands are made available within 6 months. And, that trading of bands is NOT permissible within a 5 year period, this latter being essential to remove `scalpers’ from the arena. And that if a band cannot be demonstrated as being available for use over at least 25% of a potential client base within 5 years, the band be re-allocated.

Second, in respect of specifics, we submit the following. Where a question is asked by the discussion document and not answered here that can be taken to mean affirmation by the submitters.

Do you agree with the considerations discussed in this chapter concerning lot design?

a. Expected technical developments and likely demand.

Only one thing is certain in the wireless data industry, more capacity will be required before it was anticipated. Thus the proposed 35MHz bands (TDD, being the chosen path of IP applications, which is where we believe the future lies – as does British Telecom) will quickly be too small and provision must be made before the Dec07 allocation to allow for uptake of 100Mbs bands and if this means re-division of spectrum then this must be done before Dec07 or the allocation delayed or the current allocation proceeds but with clear indications before Dec07 as to the allocation of future 100Mbs wide bands in the 2 to 5 GHz spectrum so that existing and future wireless providers can plan on a realistic basis. After all, the question `expected technical developments’ is an oxymoron, another terminology problem. Existing uses of such spectrum for broadcast and/or communication is we submit on the way out if for no other reason than IP is a protocol demonstrably superior for all information packet-delivery services as compared to the currently used and now historical radio and video protocols, which are and will continue to be phased out and which must not be allowed to slow-down the movement to EoIP by wireless, which latter may well overtake current FDD cell-phone services.

b. Size and location of the managed spectrum park or parks, including:

• whether two MSPs should be provided for in the 2.5 GHz band in order to allow for FDD (including CMAR) uses.
  

See above.

c. Acquisition limits.

See above.

d. Technical issues such as:

• accommodating TDD and FDD technologies;
• guard-bands;

TDD is well-tested and works for all IP applications, including VoIP. Guard bands will we believe eat further than 5MHz into the allocated spectrum and places more emphasis on the need for re-division of spectrum to allow for 100MHz band allocation.

Option A, B or C?

Option A, with the caveats above on future-proofing, un-scarcing, and un-scalping.

Acquisition dates and payments?

We submit that these problems are an artefact of the auction of scarce assets approach and will disappear to the extent our recommendations are adopted by Government (specifically allocation of more bandwidth, more bands, no-resale for 5 years and use-or-lose within 5 years).

Managed Park?

Heartily supported by submitters, with the proviso that at least 3 bands should be available and that at least one of those bands be over 50MHz with the others being down to 20MHz. RFM has experience in frequency allocation and it would be very poor policy management to not use and extend this valuable experience into the managed park and the allocation of nationwide frequency rights.

In summary we submit that the number and capacity of nationwide frequency rights (TDD) and managed park rights be greatly increased and that the mode of allocation be based on as-and-when justifiable as adjudged by existing and extended RSM allocation procedures and that the scarcity model and its attendant commercial axioms be contextualised in a broader social goods frame.

Yours sincerely,

Thomas Lee (WorldNet, Commspace)

Alan Marston (KCI, PlaNet, Commspace)