Annex 2 (ARCHIVED)

• A: Competition policy should incorporate both a facilitative component and a preventative component
• B: Spectrum caps to be applied with more rigorous scrutiny, and only to restrain dominant incumbents not new entrants
• C: MED to consider applying other competition safeguards, namely an access regime or annual fees, but not "use it or lose it" (UILI) provisions
• D: The role of the commerce commission in relation to the radio spectrum be reviewed
• E: MED improve the availability and transparency of information relating to the radio spectrum market, particularly on its website
• F: MED review the slow pace of conversion of spectrum to the rights-based regime, including spectrum used by government agencies
• G: MED establish or sponsor a spectrum trading exchange
• H: MED review the framework and management of the rights-based regime
• I: MED Increase its skills base in auction design and consider using combinatorial auctions
• J: Conduct a full economic costing of any social policy allocation
• K: Introduce perpetual management rights

A: Competition policy should incorporate both a facilitative component and a preventative component

(36) Competition Policy should incorporate both a facilitative component and a preventative component. 
 

B: Spectrum caps to be applied with more rigorous scrutiny, and only to restrain dominant incumbents not new entrants

(23) The Radiocommunications Act and the MED's policies be amended so that a decision to apply bidding caps be preceded by formal consultation with the public and with the Commerce Commission and that this consultation process undertaken publicly and transparently

(24) That a recommendation to impose bidding caps only be made after the MED has sought appropriate auction design, technical, market and competition related advice.

(25) Bidding caps only be applied to advance specifically articulated public policy objectives

(26) The MED engage expert technical consulting advice as part of any public consultation process to obtain an understanding of the implications of various cap models on business, markets, technology and the competitive environment

(27) Legislation be amended to provide for bidding caps so that they may be applied differentially to different market participants.

(28) Bidding caps not be used to engineer particular market outcomes because of the risk of not being able to properly define the appropriate market or technological requirements inherent in private business plans.

(37) The MED in assessing the validity of applying competition safeguards should as much as possible attempt to achieve as much consistency as possible with the Commerce Commission and in particular to review such safeguards against efficiency principles consistent with the Commerce Commission

(39) In making competition policy decisions the MED should ensure its processes are transparent and possess expert integrity.
 

C: MED to consider applying other competition safeguards, namely an access regime or annual fees, but not "use it or lose it" (UILI) provisions

(40) UILI or BILI clauses are economically inefficient, difficult to administer and unsuitable for a technology neutral, market based regime and as a result should not be used as a competitive safeguard.

(41) The MED review and consider the case for an regular fee for management rights to provide the incentive for an annual review of rights holdings on an open and cash flow basis, especially in conjunction with any review on tenure.

(42) Where the MED has reason to believe that hoarding of spectrum is occurring, MED should consider referring the matter to the Commerce Commission for consideration of declaring a service - provision of access to radiofrequency spectrum in the XYZ band
 

D: The role of the commerce commission in relation to the radio spectrum be reviewed

(23) The Radiocommunications Act and the MED's policies be amended so that a decision to apply bidding caps be preceded by formal consultation with the public and with the Commerce Commission and that this consultation process undertaken publicly and transparently.

(38) The MED undertake a public, open and transparent process to consider and report on technical and industry issues relevant to matters under consideration by the Commerce Commission concerning radiocommunications

(42) Where the MED has reason to believe that hoarding of spectrum is occurring, MED should consider referring the matter to the Commerce Commission for consideration of declaring a service - provision of access to radiofrequency spectrum in the XYZ band
 

E: MED improve the availability and transparency of information relating to the radio spectrum market, particularly on its website

(1) To provide certainty to the scope of the market, the Minister make an annual statement of the Government's intentions regarding the scope of the rights regime, and for a rolling forward program with say a 3 to 5 year outlook with annual review and update to be implemented in accordance with that policy statement.

(30) The MED attach high priority to the continued development of a publicly searchable register of management rights and licences with search functions and GIS interrogation that at the very least cover frequency band, geography and ownership

(32) The MED web site dealing with radiofrequency spectrum management issues, auctions and the secondary market be redesigned to meet the needs of industry users, especially those who might be new to business opportunities in New Zealand.

(33) MED publish on its web site a link to a full consolidated copy of the legislation governing radiocommunications as amended. Further, that a guide to the legislation explaining the legislative framework be published complete with links to all relevant subordinate legislation including any regulations an other instruments
 

F: MED review the slow pace of conversion of spectrum to the rights-based regime, including spectrum used by government agencies

(5) That the MED consider extending the management rights regime to allow central Government agencies (such as Departments of State) to participate in the market and to allow their spectrum to be accessed by the market on terms acceptable to these agencies

(35) That the Government review the impact on competition of... the slow pace of converting spectrum to the property rights regime
 

G: MED establish or sponsor a spectrum trading exchange

(34) The MED consider establishing or sponsoring a spectrum trading exchange with formal rules and using the exchange as a mechanism to release new management rights to the market in place of primary allocation systems
 

H: MED review the framework and management of the rights-based regime

(2) Irrespective of any move towards perpetual rights or statutory presumption of renewal (our recommendation below) that a formal rigorous procedure and rules be established within MED and promulgated widely to facilitate aggregation of adjacent rights.

(6) The MED consider commissioning an expert radiocommunications engineer or team with experience in spectrum property rights to fundamentally review the technical framework that surrounds management rights especially regarding duplex operations such as mobile telephony

(7) The concept of AFELs be abandoned in favour of a requirement that all emissions from all other spectrum users (not just adjacent channel users) be below a nominated threshold of the protection level for a management right.

(8) The concept of power floors be repealed, confirming the right of a management right holder to manager all emissions down to the natural noise floor

(9) That the provisions related to variation of technical conditions in the Act be amended so that uniform technical conditions apply to a whole band, and that any variation sought by right holders within a band apply to all rights issued with that band.

(10) MED invite suitably qualified GIS experts to provide a capability briefing to MED managers and policy advisers on GIS technology and the application of spatial techniques to spectrum management.

(11) That the MED consider implementing a geographically based spectrum management rights approach and a framework for allowing geographical subdivision and aggregation of licences

(12) Broadcasters be issued with geographically and frequency defined management rights to replace their current licences under Crown management rights.

(13) The MED maintain or enhance as appropriate its technical resources to provide investigation, solution and mediation services to right holders who encounter interference across rights boundaries.

(14) The MED shift its policies away from relying unduly on the primacy of definition of "boundaries", "entitlements", "lawful" and "unlawful interference" to one based more on protection of receivers and technical resolution of complex radio problems.

(15) All devices operating under management rights be exempt from device registration (licensing) unless they exceed some specific criteria regarding antenna height and operating power that implies capacity to cause widespread interference

(16) The nomenclature regarding licensing be changed to "device registration", for that is what is being envisaged.

(17) The role of approved engineers be reviewed and the need for an approval by an engineer prior to device registration be removed, allowing a right holder to directly register non-exempt devices directly with the registrar without prior approval by an approved engineer.

(18) Provisions relating to spectrum licences under management rights and the registration of these licences be repealed and existing licences operating under Crown Management Rights be converted to geographically defined management rights.

(19) Rights holders should maintain their own records of devices operating within spectrum they manage and make these records available to authorised MED officers for the purpose of facilitating resolution of interference disputes. Records should also be subject to audit and appropriate sanctions for non-compliance.

(31) The MED move to adopt a true GIS platform to support spectrum management, especially the management of geographic rights as recommended
 

I: MED increase its skills base in auction design and consider using combinatorial auctions

(20) MED both increase its skills base in the application of advanced multi-object auction designs, and outsource or co-source auction design capability.

(21) That MED continue to evaluate its options for price based allocation and include consideration of combinatorial auctions as a solution to complex allocations.
 

J: Conduct a full economic costing of any social policy allocation

(22) The New Zealand Government undertake in consultation with the public using an open and transparent process and a full economic cost benefit analysis of before deciding to withhold spectrum from allocation to pursue social policy objectives and that preferentially, these objectives be pursued using other more transparent and accountable mechanisms than spectrum withholding so that their true costs and benefits can be weighed and their distortionary effect on the market for spectrum can be minimised.

(29) For any band that is released, spectrum not be withheld from the market because of the distortionary effect of uncertainty about the timing and conditions of subsequent release on values in the secondary market

(35) That the Government review the impact on competition of withholding spectrum from the market to meet social objectives...
 

K: Introduce perpetual management rights

(3) The MED consider the practical issues surrounding of the current fixed tenure arrangements for management rights, and move to introduce either perpetual rights as recommended by NERA and favoured by the Australian Productivity Commission or alternatively a mechanism that provides for a statutory presumption of renewal on a five year term (guaranteed periods may apply to initial allocation) and a minimum of 5 years notice of any potential decision not to renew

(4) In conjunction with any move to perpetual rights, a compulsory acquisition process with appropriate public interest criteria and a basis for just and fair compensation be implemented.