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Auckland City
Submission to The Ministry of Economic Development
In the matter of Radio Frequency Auction: 2.3 GHz and 2.5 GHz Bands Discussion Paper issued by Radio Spectrum Policy and Planning Energy and Communications Branch Ministry of Economic Development August 2007.
From Auckland City Council Economic Development Group
14th September 2007
Auckland City Council is aware that broadband is a key contributor to a more productive economy and achieving the international connectivity necessary for a global city. As a result, Auckland City Council is actively pursuing its vision of ensuring residents and businesses have access to affordable high-speed broadband. This is being enabled by focusing on activities that have a catalytic effect on the manner that the market operates. It is our view that the market will not deliver to this vision without transformational activity at both the local and central government levels. This includes activities that catalyse the market to deliver the vision, such as public / private partnership urban fibre networks and, as is the case with this auction, ensuring that resources are deployed in such a manner that there will be the opportunity for delivery of affordable broadband to all.
We have noted that the crown has the following three policy objectives that it expects the proposed auction will fulfil:
- Efficient use of spectrum and maximum value to society
- Investment in infrastructure, particularly broadband services
- Competition between service providers
From an Auckland City Council perspective, we believe that the current broadband environment is in a state of flux. Market development is being primarily held back by participant capital constraints and a conservative infrastructure investment environment. In addition, market participants are expressing uncertainty around investment returns on infrastructure due to expected regulatory intervention. This is a result, in part, of the package of interventions being pursued by the central government through Digital Strategy initiatives such as the Broadband Challenge Fund, the KAREN network, the Government Shared Network and the package of telecommunications reforms heralded by the amendments to the Telecommunications Act 2001 (the Telecommunications Amendment Bill 2006). We note that many of these interventions are designed and targeted to enable “regions” to participate and play an active role in ensuring that they have affordable broadband in this uncertain environment.
Given this environment, we believe that special consideration must be accorded to the role of 2.3 / 2.5 GHz spectrum for “regional” use. We note that the discussion paper proposed the regime of “Managed Spectrum Park” (MSP) to address this need. However, given the “newness” of the MSP regime, the lack of any international experience and the extent of the details still to be worked out, it is our view that the MSP regime alone may not deliver on the “social and local” needs of the community. In particular, the issue of affordable true broadband is most acutely felt in the social / community sphere where pure commercial interests are not well served.
We note that this spectrum is fundamentally a scarce resource and the demographic / geographic characteristics of New Zealand will require the use of wireless (to at least complement) along with fibre optic, to deliver affordable true broadband. We believe that there is merit in fostering the use of this scarce resource by both national operators (multiple, existing and new) as well as regional operators, albeit at some future date.
Consequently, in addition to the proposed MSP regime, we urge the crown to consider reserving a block (35-40 MHz) of spectrum in the 2.3 / 2.5 GHz range from the potential auction pool, for future use by the “regions”. We acknowledge that neither the crown nor Auckland City Council can state today, what precise use such a reservation will serve. However, such an approach will be consistent with the past auctions (3.5 GHz spectrum) where the reservation was ultimately applied to foster “regional” operators.
Therefore, we submit that the crown must hold some spectrum back for the future. Without such reservation, the “regions” will simply not have an option to take advantage of technological developments and community led initiatives to harness the true power of broadband for social, community and economic development, as intended by the overarching Digital Strategy.
