2.1 Cabinet decisions

9. The decision to hold the 2.3/2.5 GHz auction in December 2007 followed consideration of submissions on a discussion paper on lot and auction design for a proposed 2.3 GHz auction. This paper was released in April 2007. It is available on the Ministry of Economic Development’s (MED) radio spectrum website along with a summary of submissions.²
10. In May 2007 the Minister of Communications reported to Cabinet on consideration of submissions and recommended the joint 2.3/2.5 GHz auction³. The key decisions of Cabinet were as follows [highlighting added]:

• agreed that 2.3 GHz and 2.5 GHz spectrum (both of which are suitable for wireless broadband applications) be auctioned together in December 2007, following decisions of the World Radio Conference (WRC) in November 2007;
• agreed that the combined auction should be designed to:
  

1. allow each bidder to acquire approximately 30 MHz plus guardbands (which would allow up to six nationwide service providers);
2. • provide for a managed spectrum park of at least 30 MHz (and potentially up to or exceeding 50 MHz) in the 2.3 GHz and/or 2.5 GHz bands to enable easy access for regional and rural service providers, including Maori service providers;

• agreed that current holders of radio licences in the 2.5 GHz band, which is principally for itinerant video/TV links, should be transitioned out of the band by offering new licences in the available 2.7 GHz band (or elsewhere), with the aim of revoking existing 2.5 GHz licences by December 2008;
• authorised the Minister of Communications to consult with interested parties and make decisions on design details for the auction within the parameters agreed above, including (but not limited to):
  

1. size, location, configuration and usage rules for a managed spectrum park (including whether the frequencies should be contiguous);
2. the details of lot sizes and acquisition limits (including duration of the period before trading is permitted)
3. how to implement ‘use or lose’ provisions, including specifications and penalties; and
4. auction format (e.g. outcry or simultaneous ascending auction or other options).

11. The auction is being conducted after the ITU World Radio Conference in November 2007 so that bidders can take into account information and decisions affecting technology developments arising from the conference. Decisions by the WRC are not expected to be such that the auction should be re-configured, but they may assist some parties with their decision-making.
12. This discussion paper is for the purpose of consulting with interested parties on auction design and the managed spectrum park. It also considers the 2.5 GHz transition plan. It takes into account earlier submissions on the discussion paper on the proposed 2.3 GHz auction.

² Radio frequency auction no 9

3 Radio frequency auction no 9