Scorch Communications

SUBMISSION on Discussion Paper “Radio Frequency Auction: 2.3 GHz and 2.5 GHz Bands” August 2007

Thank you for the opportunity to provide input on this subject. Access and use of these bands are a definitepart of our plan for the future of our business. We welcome the chance to contribute to a successful and fruitful allocation of this spectrum that will benefit our customers.

Question 1: Considerations Relating to Lot Design

Do you agree with the considerations discussed in this chapter concerning lot design? Please provide any comments under the following headings:

1. Expected technical developments and likely demand.

2. 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.

3. Acquisition limits.

4. Technical issues such as

   • accommodating TDD and FDD technologies;

   • guard-bands;

   • other.

5. Preferences regarding auction type.

6. Other.

We believe the best use and the only use these bandwidths should be considered for is WIMAX. Singular technology should be the distinguishing feature of this spectrum. There should be a singular focus on adopting the WIMAX protocols with TDD transmissions.

FDD should not be considered for this spectrum. There is more than enough spectrum already available to FDD without creating problems with a new joint allocation. RSM has allocated other bandplans to accommodate FDD style services. FDD doesn’t need to be included.

Managed Spectrum Parks are critically important to our business plan, however we vehemently oppose reservation of MSP for use by FDD. MSP must be available in all areas. The best opportunity for encouraging investment by niche providers (such as ourselves specialising in supplying the rural broadband market) is access to MSP.

Guard bands will be necessary between TDD band allocations unless a total network synchronisation plan is adopted. Otherwise if no guard bands are nominated the bandwidth allocations would have to reflect occupier choice to set their own guard bands by shaping use across their bandwidth (ie be more spacious).

Finally we believe the SAA auction would be the best method.

Question 2: Proposed Lot Design

Do you prefer Option A, B or C for the lot design? Please explain why. If you prefer Option C is your preference for C(i) or C(ii)? Why? If there is an alternative option you prefer please specify it and explain why it would be preferable.

We believe there should be no options for FDD as outlined in the previous question:

• We believe the best use and the only use these bandwidths should be considered for is WIMAX. Singular technology should be the distinguishing feature of this spectrum. There should be a singular focus on adopting the WIMAX protocols with TDD transmissions.

FDD should not be considered for this spectrum. There is more than enough spectrum already available to FDD without creating problems with a new joint allocation. RSM has allocated other bandplans to accommodate FDD style services. FDD doesn’t need to be included.

Managed Spectrum Parks are critically important to our business plan, however we vehemently oppose reservation of MSP for use by FDD. MSP must be available in all areas. The best opportunity for encouraging investment by niche providers such as ourselves specialising in supplying the rural broadband market is access to MSP.

We are concerned that submissions to reserve spectrum for non WIMAX applications within this spectrum are spoilers—attempts to restrict competition by unnecessary reservation of bandwidth.

Question 3: Maori Interests

What provision should be made regarding allocation of spectrum in the 2.3 GHz and 2.5 GHz bands for use by Maori (i.e. Maori service providers)? What provision should be made regarding allocation of spectrum in the 2.3 GHz and 2.5 GHz bands for use for Maori (i.e. Maori as service consumers, or in the interests of Maori language and culture)? What terms and conditions should apply to this spectrum?

NO COMMENT.

Question 4: Eligibility to Bid

Do you agree that no restrictions should be placed on the eligibility of parties to bid for lots?

NO. We believe there should be definite restrictions on eligibility. Bidders need to demonstrate an existing working wireless broadband network and capacity today (ie before the bid) in order to qualify. This is in addition to the Use It Or Lose It rule. It is really critically important to prevent speculation by people with either no interest or no knowledge of the bandwidth. If there are no qualified bidders under such a restriction it would be better to have everything as a MSP — at least the bandwidth would be used.

Question 5: Duration of Acquisition Limits

Do you consider the expiry of acquisition limits 1 year before the (December) use or lose date to be satisfactory? Do you prefer a different acquisition limit date? Please explain reasons for your view? Do you have any other comments on the time for acquisition limits to expire?

We agree with this.

Question 6: Use or Lose Provisions

Do you prefer a date of December 2012, 2014, or 2016, for applying the use or lose test? If not what alternative date would you prefer to implement the Cabinet decisions on use or lose? Please explain. Do you prefer Option A or Option B or some other option regarding the test for ‘use’? If you do not agree with the proposals, what ‘use or lose’ provisions do you propose? Should financial consequences result from not using rights, either in addition or as an alternative to loss? How should the amount of any financial consequence be calculated?

As previously stated in our answer to Question 4 - Bidders need to demonstrate an existing working wireless broadband network and capacity today (ie before the bid) in order to qualify.— Given that qualification we believe the use or lose it test should apply as soon as possible after the date of first access. If any bandwidths are available in Dec 2007, 12 months later we believe should be the lose it date. At the complete outside limit bidders should not have longer than two years to get themselves organised. Two years can be half a lifetime in technology terms—occupants of bandwidths should not have more than two years opportunity to unnecessarily restrict access to others with existing infrastructure and investment. We believe Option C should be the test for use.

Question 7: Settlement

Do you agree with the proposed settlement terms (30 days following completion of the auction)? If not, what other factors do you see as relevant?

We believe it is unfair to expect payment for something that may not be available for two years. A settlement date that matched the date of availability would seem a fair option.

Question 8: Managed Spectrum Parks: Proposed Allocation Procedures and Usage Rules

1. Do you agree with the suggested eligibility criteria for access to a MSP?

2. Do you agree with the suggested core technical and usage requirement?

3. Of the three options outlined above, which is your preferred method for implementing a MSP? Why?

4. Are there better alternatives or variations on these implementation options?

5. What incentives for gaming arise under the various options, and what measures, if any, could be taken to minimise such incentives?

6. What fees or resource charges should be levied (particularly for your preferred option)?

We agree with the suggested eligibility criteria.

Thank you for the opportunity to make this submission.

Sincerely
Clare Ryan
Co-ordination Manager
SCORCH Communications