Allocation Plan

7. Cabinet has agreed to allocation of the Crown-managed 3.5GHz spectrum as follows:

1. Allocation will primarily be in the form of area spectrum licences defined by territorial local authority boundaries, which grant licensees the right to establish transmitter sites anywhere within the licence area, subject to rules to prevent harmful interference;
2. Licensees may control spectrum licences for only a limited number of geographic areas, and must intend to use the licences for the purpose of providing fixed wireless access services;
3. Project PROBE suppliers will have priority access to area or site-specific spectrum licences out of any unallocated Crown-managed 3.5GHz spectrum to the extent that:
   1. the spectrum licence will be used to provide a fixed wireless access service specified in a Project PROBE contract or schedule of works; and
   2. the supplier satisfies the Ministry of Economic Development (MED) that it does not control sufficient alternative spectrum rights or a substitutable broadband delivery system which could reasonably be used to provide the specified service;
4. Applications for non-PROBE licences will initially be invited and processed in a number of predetermined allocation rounds;
5. To be eligible for a spectrum licence, a non-PROBE applicant must satisfy MED that it does not control sufficient alternative spectrum rights or a substitutable broadband delivery system which could reasonably be used to provide the proposed service;
6. If two or more non-PROBE applications for the same or a similar geographic area are received in an application round:
7. Competing applicants will be required to seek a negotiated solution between them in first instance; and
8. If the applicants cannot agree within a prescribed period, the spectrum licence(s) will be allocated by auction or tender, with participation limited to the competing applicants;
9. The purchase price for a spectrum licence is either:
   1. the average clearing price for 3.5GHz spectrum rights in the 2002 auction, adjusted pro rata to reflect the total population of the area covered by the licence, the bandwidth utilised, the term and inflation, and subject to a minimum price; or
   2. if an auction or tender is conducted under h, the auction clearing price or highest tender, and in this case the price calculated under i sets the reserve price;
10. Licensees will be required to implement fixed wireless access services under spectrum licences to a level acceptable to MED within two years of allocation, or face revocation of the spectrum licence without compensation;
11. Transfer and sublicensing of spectrum licences will be restricted until the licensee has implemented the fixed wireless access service or two years has elapsed, whichever is later.

8. A process diagram of the allocation plan is set out in the Appendix.

9. Cabinet authorised the Associate Minister of Communications from time to time to approve variations of the allocation plan agreed at 7 above, provided such variations are consistent with the objectives confirmed at 6 above, and to approve such detailed allocation rules and other documentation as may be desirable to implement the allocation plan.