The Way Ahead - Decisions and Implementation Options for the 400 Mhz Band

The Way Ahead – Decisions and Implementation Options for the 400MHz Band

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© Commonwealth of Australia 2010 This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to the Manager, Communications and Publishing, Australian Communications and Media Authority, PO Box 13112 Law Courts, Melbourne Vic 8010.

Published by the Australian Communications and Media Authority Contents

Executive summary 1 Submissions 3 Publication of submissions 3

1 Introduction 4 1.1 Background 4 1.2 Purpose 5 1.3 Structure of the paper 5 1.4 Scope 5 1.5 Legislative and policy framework 6 1.6 Review objectives 8 1.7 Strategies 9 1.8 Process for new arrangements in the 400 MHz band 10 1.9 Other relevant ACMA activities and papers 11

2 Overview of new arrangements 12 2.1 The new 400 MHz Plan 12 2.2 Assessment of new arrangements against the objectives of the review 13

3 Identification of a harmonised government band 18 3.1 Background 19 3.2 Original ACMA proposal 20 3.3 Stakeholder feedback 20 3.4 The ACMA’s response to feedback 21 3.5 Final decision 26 3.6 Proposed transition arrangements 27

4 Changes to arrangements in 450–470 MHz 28 4.1 Background 28 4.2 Original ACMA proposal 28

acma | iii Contents (Continued)

4.3 Stakeholder feedback 29 4.4 The ACMA’s response to feedback 29 4.5 Final decision 30 4.6 Proposed transition arrangements 31

5 UHF Citizen Band Radio Service 34 5.1 Background 34 5.2 Original ACMA proposal 34 5.3 Stakeholder feedback 34 5.4 The ACMA’s response to feedback 35 5.5 Final decision 35 5.6 Proposed transition arrangements 35

6 Expiry of 500 MHz spectrum licences 36 6.1 Background 36 6.2 Original ACMA proposal 36 6.3 Stakeholder feedback 37 6.4 The ACMA’s response to feedback 37 6.5 Final decision 38 6.6 Proposed transition arrangements 39

7 Measures to address congestion 40 7.1 Reduction in channel bandwidth 40 7.2 Assignment and coordination rules 44 7.3 Pricing 47

8 Proposed transition to new arrangements 51 8.1 Proposed transition plan for the 400 MHz band 51 8.2 Proposed incentives and assistance program to

iv | acma Executive summary

This paper frames the way ahead for the 400 MHz band (403–520 MHz). It sets out a range of decisions for future arrangements in the band and puts forward implementation plans and timeframes to achieve these key objectives: > reduced congestion > harmonised spectrum for government > support for new technologies.

One of the key achievements of the review is the provision of harmonised spectrum for use by government agencies. The Australian Communications and Media Authority (the ACMA) believes strongly that dedicated harmonised spectrum of appropriate size and structure is critical to enabling interoperable radiocommunications between national security, law enforcement and emergency services. The spectrum arrangements put forward in this paper are likely to mark the beginning of a new era in government radio networks, with the emergence of large, efficient networks that provide a greater level of support for emergency services and other vital government objectives than is currently the case. The new arrangements create a significant and rarely delivered opportunity for government organisations to develop a nationally harmonised and interoperable system of government radio networks able to deliver effective radiocommunications on a national scale.

Under the new arrangements, several segments in 403–470 MHz have been identified for the exclusive use of government, primarily to support national security, law enforcement and emergency services, but also available to support broader government use once these requirements are met. The ACMA has developed these arrangements in close consultation with individual stakeholders, relevant committees and peak industry groups. The final arrangements complement the objectives developed by these groups and the Council of Australian Governments (COAG) agreed national framework for improved radiocommunications interoperability.

Another key outcome of the review is an increase in the technology options able to be supported in the band. Changing the frequency duplex arrangements in the 450– 470 MHz band and changing the channelling scheme opens up options for technologies requiring such arrangements. These systems were not supported under previous arrangements.

The ACMA also undertook to improve the allocative, technical and dynamic efficiency with which spectrum in the 400 MHz band is allocated and used, by reviewing the relevant frequency assigning and licensing mechanisms (including Band Plans, licensing instructions, licensing options and pricing). The proposed changes update technical arrangements to accommodate current and expected future technologies and offer greater flexibility in the way spectrum can be used.

In order to implement these changes, some clear spectrum will be required to aid transition as services are required to relocate. The most readily available clear spectrum lies within the upper segment of the 400 MHz band (referred to as the 500 MHz spectrum licences).

Given the current underutilisation of the 500 MHz spectrum licences and the need for clear spectrum the ACMA believes that the overall public benefits derived from this

acma | 1 piece of spectrum will be improved if the band was made available to support transition for services displaced by the other changes in the 400 MHz band. This transition will be facilitated if this 500 MHz band reverted to apparatus licensing.

The ACMA remains committed to extending spectrum licensing in the future. In this case the ACMA believes that reversion to apparatus licensing will assist in optimising the overall public benefit derived from use of the entire 400 MHz band. It has accordingly made a recommendation to the Minister to revoke the relevant spectrum licence designation notice.

As well as substantial changes to the overall structure of the band through the creation of harmonised government spectrum and revised frequency splits, the outcomes of the review include improvements to underlying technical arrangements in the band. This includes a reduction in channel bandwidths and updates to the assignment and coordination rules. Draft Radiocommunications Assignment and Licensing Instructions (RALIs) are included as part of this paper for stakeholder comment on the implementation of high level decisions announced in this paper. The use of 12.5 kHz channels for land mobile systems and improved assignment and coordination procedures are fundamental to these changes. It is envisaged that these changes will assist in reducing congestion, which will allow expanded use of the band.

It is proposed that fee arrangements in the 400 MHz band be amended to reflect opportunity cost principles. This would involve a threefold increase in the spectrum tax for high density areas (Sydney, Melbourne and Brisbane). Over the same timeframe the ACMA would reduce spectrum taxes in rural and remote areas where the spectrum is under-utilised once sufficient analysis has been completed. Under this new model, users will potentially be able to reduce their outlays by reducing channel bandwidth to counter licence tax increases.

The ACMA is also reforming arrangements for the UHF citizen band, which is part of the 400 MHz spectrum. This primarily involves increasing the number of channels available through a reduction in channel bandwidth. This will improve the utility of the band, while balancing future flexibility against the impact on existing users of this service.

This paper also details the proposed process for transition to the new arrangements. The ACMA is proposing to finalise transition by 31 December 2015 in high and medium density areas and by 31 December 2018 outside of these areas. The ACMA is proposing to split the transition process into three phases, some with a number of stages, to simplify the process for affected users and to facilitate the completion of transition by the proposed deadlines. The phases include the relocation of commercial users out of—and government users into—harmonised government spectrum, as well as change in duplex frequency split arrangements in 450–470 MHz and the implementation of measures to address congestion. The transition plan also details some proposed measures to assist users with the transition to the new arrangements. This includes a proposal for fee relief incentives for those users which undertake the necessary changes earlier than the mandated timeframes.

Overall, while acknowledging the short to medium term disruption caused by these decisions, the ACMA believes that the new arrangements minimise these disruptions and will improve the efficiency and effectiveness with which services are delivered in the band over the longer term. The new arrangements will enable expanded use and flexibility, which will in-turn maximise the public benefit arising from use of this spectrum.

2 | acma Submissions The ACMA is seeking commentary on the implementation plans set out in this discussion paper. Submissions should be made: By email: [email protected]

By mail: Manager National Interest Planning Section Australian Communications and Media Authority PO Box 78 Belconnen ACT 2616 The closing date for comments is 6 June 2010.

Media enquiries should be directed to Donald Robertson on 02 9334 7980 or by email to [email protected].

Any other enquiries may be directed to Bridget Lally on 02 6219 5203 or by email to [email protected]

Electronic comments in Microsoft Word or Rich Text Format are preferred.

Publication of comments Generally, the ACMA publishes all submissions it receives. However, the ACMA will not publish submissions that it considers contain defamatory or irrelevant material.

The ACMA prefers to receive submissions which are not claimed to be confidential. However, the ACMA accepts that a submitter may sometimes wish to provide information in confidence. In these circumstances, submitters are asked to identify the material over which confidentiality is claimed and provide a written explanation for confidentiality claims.

The ACMA will not automatically accept all claims of confidentiality. The ACMA will consider each claim for confidentiality on a case-by-case basis. If the ACMA accepts a confidentiality claim, it will not publish the confidential information unless required to do so by law.

When can the ACMA be required by law to release information? The ACMA may be required to release submissions by law under the Freedom of Information Act 1982 (Cth) or for other reasons including for the purpose of parliamentary processes or under court subpoena. The ACMA will seek to consult submitters of confidential information before that information is provided to another body or agency, but the ACMA cannot guarantee that confidential information will not be released through these or other legal means.

Sharing of information Under the Australian Communications and Media Authority Act 2005, the ACMA is able to disclose submissions to the Minister, the Department including authorised officials, Royal Commissions and certain Commonwealth authorities such as the Australian Competition and Consumer Commission and Australian Securities and Investments Commission.

If information is accepted by the ACMA as confidential, the ACMA will seek to consult with the submitter of the information where the ACMA intends to share that information.

acma | 3 1 Introduction

The 400 MHz band is vitally important to the Australian community. It carries radiocommunications for a diverse range of industry and government organisations that deliver essential public and private services.

The band is one of the most heavily used parts of the spectrum and is congested in major cities. The ACMA has determined that the overall benefit gained from this band can be significantly increased through the introduction of reforms.

The way forward detailed in this paper will provide improvements in the efficiency and effectiveness with which the 400 MHz band is used. The measures will assist in relieving congestion, especially in the major capital cities. New arrangements will not only allow existing users to expand networks, but allow new users to enter the band. Additionally, some technologies previously precluded from using the 400 MHz band will now be able to operate in the band. The opportunities created through the reforms will maximise the public benefit arising from the use of this spectrum.

Perhaps the most significant change to come out of the review of the 400 MHz band is the identification of harmonised government spectrum. The need to improve radiocommunications interoperability between certain government agencies is just one of the benefits that the identification of harmonised spectrum for government will bring. Harmonised spectrum identified for government will provide certainty of access to government users, as well as incentives for consolidation and more efficient use of government spectrum. By consolidating government (the largest user of the 400 MHz band) into a block of spectrum, and providing incentives for them to use the band efficiently, spectrum efficiency dividends will be created that will benefit all users of the band, including commercial users.

The review of the 400 MHz band has been a challenging but necessary task. While the ACMA is fully aware of the impacts that changing to new arrangements will have on existing users of the band, the ACMA believes that the transition plan proposed in this paper achieves a balance between cost to users and implementing new arrangements in a reasonable timeframe. Additionally, the ACMA has designed an incentives and assistance program to support users as the band is transitioned to the new arrangements. The transition plan and incentives and assistance program will together ensure the timely implementation of the new arrangements, while working to reduce the impact on existing users as much as possible.

1.1 Background The first formal step in the review of the 400 MHz band took place on 18 April 2008, when the ACMA released the discussion paper, Spectrum Options: 403–520 MHz— Initial consultation on future arrangements for the 400 MHz band (the Options Paper). The purpose of the Options Paper was to stimulate discussion and gather information from stakeholders to assist the ACMA to develop future arrangements. The Options Paper also included detailed background material and is a useful source of additional information when considering the decisions detailed in this paper.1 The ACMA received 75 responses to the Options Paper.2

Subsequent analysis of the responses and additional work carried out by the ACMA resulted in the development of the refined options and proposals set out in the Spectrum Proposals: 403–520 MHz—Proposals for future arrangements in the 400

1 www.acma.gov.au/WEB/STANDARD/pc=PC_311117 2 www.acma.gov.au/WEB/STANDARD/pc=PC_311375

4 | acma MHz band (the Proposals Paper), released on 2 April 2009. Sixty-one responses were received by the ACMA to the Proposals Paper.3 The ACMA released a summary of the responses received to the Proposals Paper to provide stakeholders with a broad insight into the submissions received.4

1.2 Purpose This paper is the third step towards establishing new arrangements in the 400 MHz band. Its purpose is to detail high level decisions from the review of the band and consult on their implementation, including associated transition strategies.

While the key decisions are detailed in this paper, the ACMA seeks stakeholder comment on how they will be implemented in the associated planning and licensing documents, such as the various Radiocommunications Assignment and Licensing Instructions (RALIs) used in this band. The ACMA is also seeking stakeholder comment on transition and implementation strategies detailed in this paper. Comments received in response to the paper will be used to refine the implementation of decisions and transition strategies where appropriate.

1.3 Structure of the paper An overview of the new arrangements, including the new 400 MHz Administrative Band Plan, is provided in Chapter 2.

Chapters 3 to 6 discuss the major changes to the band. Chapter 3 outlines the arrangements for the identification of harmonised spectrum for government; Chapter 4 describes changes to the duplex frequency splits in 450–470 MHz; Chapter 5 outlines new arrangements for the UHF Citizen Band service; and Chapter 6 details the ACMA’s intentions for the future of the currently spectrum-licensed spectrum in the 500 MHz band.

Chapter 7 outlines the decisions on measures to address congestion, namely reduction in channel bandwidth and changes to assignment and coordination procedures.

Chapter 8 summarises the migration and transition process to new arrangements, which will also be discussed in respective chapters.

1.4 Scope 1.4.1 In scope Arrangements for services allocated within the bands 403–430 MHz and 440–520 MHz are within the scope of this paper, with exceptions noted below.

The 440–450 MHz band (out of scope in the Proposals Paper) is within the scope of this paper. This band is included as an option to assist in the transition to a 10 MHz duplex frequency split in the 450–470 MHz band, as discussed in Chapter 4.

1.4.2 Out of scope Changes to arrangements in the ranges 380–400 MHz, 406–406.1 MHz, 430– 440 MHz and UHF television channel 27 (520–526 MHz) are not within the scope of this paper.

3 www.acma.gov.au/WEB/STANDARD/pc=PC_311790 4 www.acma.gov.au/webwr/_assets/main/lib310903/ifc8-2009_summary_of_responses.pdf

acma | 5 The potential for changes to the 380–400 MHz band is not within the scope of this discussion paper. The complexities and challenges associated with expanding the use of the 380–400 MHz band are significant. In the interest of timeliness, and given the current degree of uncertainty with 380–400 MHz, the ACMA is pursuing options for the future use of this band separately to the overall review of the 400 MHz band.

The 406–406.1 MHz range is used worldwide for Emergency Position Indicating Radio Beacons (EPIRBs). In undertaking the review of the 400 MHz band, the ACMA will ensure that EPIRB use will retain an appropriate level of protection from interference.

The 430–440 MHz range is used for defence purposes and by the amateur service, including amateur satellite, in line with internationally harmonised allocations. In addition, the Australian Radiofrequency Spectrum Plan specifies that the fixed and mobile services may only be used for the purposes of defence in this range and hence there is currently limited scope for general use of these services in this band.

The issue of UHF television channel 27 was within the scope of the Proposals Paper. The ACMA sought comment from wireless microphone and biomedical telemetry users potentially operating devices in the 520–526 MHz range under the Radiocommunications (Low Interference Potential Devices) Class Licence 2000. Responses received indicated that there is only very limited use of the 520–526 MHz band for wireless microphones, and no reported use for biomedical telemetry devices.

The ACMA will maintain Embargo 455 in 518–520 MHz to provide flexibility for future decisions on the potential use of UHF television channel 27 as a 7 MHz channel associated with digital dividend considerations.

1.5 Legislative and policy framework The issues discussed in this paper and the options presented in it are consistent with the object of the Radiocommunications Act 1992 (the Radiocommunications Act) and informed by analysis against the Total Welfare Standard (TWS) and the Principles for Spectrum Management.

The Australian Communications and Media Authority Act 2005 (the ACMA Act) sets out the spectrum management functions of the ACMA including: > to manage the radiofrequency spectrum in accordance with the Radiocommunications Act 1992 (the Radiocommunications Act) > to advise and assist the radiocommunications community.

1.5.1 The object of the Radiocommunications Act 1992 Consistent with the spectrum management functions set out in the ACMA Act, the object of the Radiocommunications Act is provide for management of the radiofrequency spectrum in order to achieve a number of goals,6 including: > maximise, by ensuring the efficient allocation and use of the spectrum, the overall public benefit derived from using the radiofrequency spectrum > make adequate provision of the spectrum: > for use by agencies involved in the defence or national security of Australia, law enforcement or the provision of emergency services > for use by other public or community services > provide a responsive and flexible approach to meeting the needs of users of the spectrum

5 www.acma.gov.au/webwr/radcomm/frequency_planning/spectrum_embargoes/embargo45.pdf 6 The object of the Radiocommunications Act is to provide for the management the radiofrequency spectrum. The purposes of the objects are set out in paragraphs 3 (a) through (h).

6 | acma > encourage the use of efficient radiocommunication technologies so that a wide range of services of an adequate quality can be provided > support the communications policy objectives of the Commonwealth Government.

The decisions detailed in this paper have been made with consideration to the increase in overall public benefit that will result from the changes to the 400 MHz band. In light of the objects identified above, this paper details measures to improve arrangements in the band and considers strategies for transition to these new arrangements that minimise the impost on users of the band, to the extent possible.

1.5.2 Principles for Spectrum Management The ACMA has developed a series of Principles for Spectrum Management (the Principles) to guide its decision-making on spectrum management. The Principles are intended to guide the ACMA’s management of spectrum within its existing legislative responsibilities and government policy settings.

The Principles aim to: > promote consistency, predictability and transparency in the ACMA’s decision- making regarding spectrum > provide guidance for major planning and allocation decisions to be made over the next few years > increase the ACMA’s ability to respond to challenges, including the impact of new technologies and increasing demand for spectrum for advanced services.

The Principles recognise that a band’s highest value use is not determined solely by an economic assessment, but also by consideration of the broader public good or social benefit achieved by that use. Therefore, a key theme of the Principles is to optimise the use of market mechanisms with minimal regulatory intervention to maximise the public benefit.

The Principles are: Principle 1—Allocate spectrum to the highest value use or uses Principle 2—Enable and encourage spectrum to move to its highest value use or uses Principle 3—Use the least cost and least restrictive approach to achieving policy objectives Principle 4—To the extent possible, promote both certainty and flexibility Principle 5—Balance the cost of interference and the benefits of greater spectrum utilisation

The ACMA has also considered a range of other factors in addition to the Principles, as identified in its spectrum management decision framework. Technology developments and government policy are key factors in the decisions detailed in this paper. The decision making framework is set out schematically in Figure 1.

In terms of the general approach, the release of this discussion paper represents the commencement of the ACMA’s public consultation ‘filter’. The ACMA used this framework, including the Principles, to develop the proposals detailed in the Proposals Paper and to reach the decisions detailed in this paper.

acma | 7 Figure 1 Spectrum management decision framework

1.5.3 The Total Welfare Standard In determining what actions maximise the public benefit, the ACMA uses the Total Welfare Standard (TWS). The application of the TWS enables the ACMA to adhere to a consistent conceptual framework when assessing the public interest impact of the regulatory proposals it considers. The TWS requires consideration of the total benefit (economic surplus) of a regulatory decision. The approach that results in the greatest net benefits is regarded as the approach that best promotes the public interest. The impact of a decision on particular groups should be evaluated as part of the analysis; but issues associated with the distribution of benefits and costs between different parties should be addressed as a separate and distinct policy question.

This paper provides a high level consideration of the overall public benefits associated with the changes to the 400 MHz band. The decisions detailed are considered by the ACMA to be in the public benefit and will be considered further throughout the paper in the analysis of the decisions against the Principles for Spectrum Management.

1.6 Review objectives The broad objectives of the review of the 400 MHz band, as detailed by the ACMA in the Proposals Paper, are to implement measures to: > improve the harmonisation of spectrum use by certain government agencies to assist in radiocommunications interoperability objectives and the development of efficient government networks > improve the allocative, technical and dynamic efficiency with which spectrum in the band is allocated and used, by reviewing the relevant frequency assigning and licensing mechanisms (including band plans, licensing instructions, licensing options and pricing) > facilitate new technologies and possible complementary uses of the band > implement arrangements that take advantage of the different spectrum management requirements and challenges between different geographic areas

8 | acma > minimise the requirement for ongoing ACMA intervention in the band. 1.7 Strategies At the commencement of the review, the ACMA used the Principles for Spectrum Management to develop a number of strategies in the review of the 400 MHz band, which intended to achieve the objectives of the review in the most efficient way. These strategies and how they relate to some of the specific proposals are set out below.

Use both economic and technical tools to achieve highest value use A key objective of the review is to improve the allocative, dynamic and technical efficiency with which the band is used. Achieving these efficiencies should result in each part of the band being used for its highest value use with the maximum public benefit being derived from the band.

This objective has been achieved in the decisions detailed through enabling improved technical efficiency in the band by facilitating a reduction in bandwidth of narrowband channels to 12.5 kHz and 6.25 kHz. Transition arrangements for reducing existing licence bandwidth will be supported by proposals for more appropriate pricing of the band, based on the opportunity cost of the spectrum. The ACMA believes this will encourage users to select the bandwidth that delivers the best outcome in terms of technical and economic efficiency.

Improvements in the efficiency of spectrum use in this band will be greatly facilitated by a more rapid uptake of narrower bandwidths. As well as the obvious cost benefits, a range of technical measures will help encourage users to move to narrower bandwidths more rapidly. The faster move to narrower bandwidths will create free channels in most segments of the band, which will help facilitate the re-coordination required to achieve other objectives of this review.

The combination of economic incentives and technical planning rules to move equipment to narrower bandwidths is designed to enable and encourage users to move spectrum to its highest value use. These mechanisms have been designed to achieve the broad policy objective of more efficient use, whilst minimising the burden (including cost) on users.

Provide a harmonised government band A key outcome of the review is the ACMA’s decision to consolidate government security, law enforcement and public safety operations into a harmonised government band. This is to facilitate both the efficient use of the spectrum and interoperability, and therefore gain higher value from use of the spectrum. The arrangements surrounding the identification of harmonised spectrum for government will provide certainty to government users and provide incentives for the consolidation and efficient use of government spectrum. Additionally, by consolidating government security, law enforcement and public safety operations—some of the largest users of the 400 MHz band—into a block of spectrum, and providing incentives for them to use the band efficiently, spectrum efficiency dividends will be created that will benefit all users of the band, including commercial users.

The ACMA received extensive feedback to proposals related to the harmonised government band in response to the Proposals Paper. In preparation for its final decision, the ACMA undertook targeted consultation on alternative options for the harmonised government band with the Radiocommunications Consultative Committee (RCC) Working Group for the Review of the 400 MHz band, the National Coordinating Committee for Government Radio (NCCGR) and the Law Enforcement and Security Spectrum Committee (LESRSC). As a result, the ACMA has decided to consolidate government security, law enforcement and public safety operations into a ‘split’ harmonised government band, as detailed in Chapter 3. The ACMA believes that this

acma | 9 option will support interoperability and efficiency objectives, while minimising costs and restrictions on other users of the band. Provide flexibility Another key strategy for the band is to provide the maximum flexibility in choice of equipment, particularly between 450–470 MHz, where the widest range of different technologies is available. This gives maximum opportunity for users to move spectrum to a higher value use, and satisfies the principle of facilitating the lowest cost and most flexible solution in spectrum management.

In the 450–470 MHz band, the current 9.5 MHz frequency split precludes the use of some technologies. The ACMA’s decision to change to a 10 MHz split will increase the range of technologies that can be used in the band. The availability of more choices of technology would enable users to increase the value of spectrum use.

Provide sufficient time for transition In order to provide the least cost approach to achieve policy objectives, the ACMA will allow time for users to adjust their use of the spectrum. The proposed increase in apparatus licence taxes would be phased in over a number of years and incentives are proposed to be offered for users who make necessary transitions early. Users outside of the major capital cities will be given additional time to make the transition, and in some cases, will not be required make changes to their systems.

Recognise geography and demographics In the 400 MHz band, the areas of Sydney and Melbourne are considered highly congested. The Brisbane area is also considered to be increasingly congested. Congestion is less of a problem in other areas. As a result, some of the changes proposed in the review of the 400 MHz band vary according to region. The ACMA is of the view that this will result in the lowest cost implementation for each region.

Optimise technical assignment and coordination rules To enable the ACMA to balance the cost of interference and the benefits of greater spectrum utilisation, the ACMA has detailed draft changes to the various RALIs that support the use of the band.

1.8 Process for new arrangements in the 400 MHz band Changes to arrangements in the 400 MHz band will be made in two phases: review and implementation. This approach recognises the distinction between identifying the necessary revisions to existing arrangements and determining the required steps to take to implement those revisions.

1.8.1 Review phase The release of this paper marks the completion of the review phase. This paper details the decisions resulting from the review and consults on the detailed implementation of these decisions (e.g. draft RALIs).

1.8.2 Implementation phase The implementation phase will begin later in 2010 when the new RALIs come into effect. The changes identified in the review phase will be implemented over a period of time in line with the ACMA’s proposed transition plan, detailed in Chapter 8.

Revised or new embargos will be put in place prior to the formal commencement of new arrangements to facilitate new planning arrangements.

10 | acma 1.9 Other relevant ACMA activities and papers The ACMA, along with other government agencies, are undertaking concurrent activities that relate to the 400 MHz band.

Opportunity cost pricing The 400 MHz band is the ACMA’s first implementation of pricing on an opportunity cost basis. This decision follows a separate consultation process which included an ACMA discussion paper on opportunity cost pricing, with a detailed case study on the 400 MHz review, and from which the new prices for the band have been derived. For more information on this and more detail on the 400 MHz case study, please refer to the ACMA’s consultation paper on Opportunity Cost Pricing of Spectrum.7

Government digital dividend considerations The government has announced that the switch-off of terrestrial analog television services will be completed by the end of 2013. This will free up a significant portion of the spectrum, which will either create opportunities for alternative users, or the enhancement of existing services or coverage. The opportunity to introduce new or improved services is known as the ‘digital dividend’. As discussed in section 1.4.2, this will have an impact on the future of parts of the 400 MHz band.

The Department of Broadband, Communications and the Digital Economy (DBCDE) is undertaking work on the digital dividend, and released a discussion paper on the issue in January 2010.8

7 www.acma.gov.au/WEB/STANDARD/pc=PC_311707 8 www.dbcde.gov.au/consultation_and_submissions/digital_dividend/digital_dividend_green_paper

acma | 11 2 Overview of new arrangements

The 400 MHz band is vitally important to the Australian community and is one of the most heavily used parts of the radiofrequency spectrum. The band is used by industry to support a range of transport, dispatch and other activities, and by government to deliver vital services to the public, including emergency services such as police, fire and ambulance.

The replanning of this band is a unique opportunity, and given its importance and heavy use, a reform of the band is urgently needed. This band is predominantly used for the land mobile service, but also accommodates other services, including the fixed (point-to-point and point-to-multipoint), radiolocation and amateur services.

2.1 The new 400 MHz Plan Arrangements for the use of the 400 MHz band are set out in a number of Radiocommunications Assignment and Licensing Instructions (RALIs). The principal document outlining arrangements in the 400 MHz band is the 400 MHz Plan (RALI MS22). The current version of the 400 MHz Plan specifies arrangements for radiocommunications services in the two bands 403–420 MHz and 450–520 MHz, advising the service allocations in the two bands, specifying the segment frequency limits applicable to these allocations, and the channelling arrangements within these segments.

A draft revision of the 400 MHz Plan is provided in Attachment 1. The scope of the document has been expanded to include the 420–430 MHz band. This plan will implement a number of the major structural changes in the band, namely: > harmonised government spectrum, which is further discussed in Chapter 3 > the change to a 10 MHz duplex frequency split in parts of the 450–470 MHz band, which is further discussed in Chapter 4 > creation of a 6.25 kHz compatible channel raster, which is further discussed in Chapter 7.

Given the complexity of the changes being made to the 400 MHz band, the ACMA believes that the flexibility offered by an Administrative Band Plan such as RALI MS 22 is the most appropriate way to effect these changes. However, if during the implementation of the review’s outcomes it becomes clear that the legislative force of a Frequency Band Plan under section 32 of the Act is necessary, the ACMA will consider the development of such a Band Plan.

As well as the substantial structural changes articulated in the Band Plan, a number of improvements to the underlying assignment and coordination arrangements in the band are discussed in Chapter 7. Changes relating to the land mobile service are implemented in RALI LM8—Frequency assignment requirements for the land mobile service, provided in Attachment 2. Similarly, changes related to the fixed service are implemented in RALI FX16—Point-to-multipoint fixed services in the 400 MHz and 900 MHz bands and RALI FX17—Frequency assignment requirements for narrowband single channel two-frequency point-to-point services in the 400 MHz and 900 MHz band, provided in Attachments 3 and 4, respectively.

12 | acma While the high level decisions implemented in these draft RALIs have been made, the ACMA is seeking stakeholder comment on the implementation of the decisions in the draft RALIs.

2.2 Assessment of new arrangements against the objectives of the review As detailed in section 1.6, five broad objectives of the review of the 400 MHz band have been identified. The ACMA believes that the changes detailed in this paper— along with the proposed transition plan—achieve the objectives of the review. The ACMA also believes that the changes are in line with the Principles for Spectrum Management.

Objective 1: Improve the harmonisation of spectrum use by certain government agencies to assist in radiocommunications interoperability objectives and the development of efficient government networks Chapter 3 details arrangements for the identification of harmonised spectrum for use by certain government agencies. A number of segments throughout the 403–470 MHz band have been identified for government use.

The ACMA believes that the spectrum identified will provide the necessary spectrum management pre-requisites for interoperability. However, as discussed in the Proposals Paper, the ACMA acknowledges that there are other requirements for improved interoperability beyond just spectrum harmonisation. Government agencies are working towards addressing such requirements through the development of the National Framework to Improve Government Radiocommunications Interoperability (the National Framework). The National Framework was endorsed by the Council of Australian Governments (COAG) on 7 December last year. The purpose of the National Framework is to provide the guiding principles and key areas of work for jurisdictions to achieve radiocommunications interoperability. This includes encouraging jurisdictions to adopt the same technology and operating procedures across their networks.

Additionally, the ACMA believes that the spectrum identified will allow for the development of more efficient government radio networks. The arrangements allow two-frequency land mobile government networks that are already established in 403– 430 MHz to continue operation, and provides sufficient spectrum for the expansion and consolidation of these networks. Additionally, an allocation of 2  2.4875 MHz of spectrum in 450–470 MHz provides government organisations with greater technology options into the future.

The identification of harmonised spectrum for use by certain government agencies directly addresses a number of the aspects of the object of the Radiocommunications Act, detailed in section 1.5.1, namely: > to make adequate provision of the spectrum: > for use by agencies involved in the defence or national security of Australia, law enforcement or the provision of emergency services > for use by other public or community services > to support the communications policy objectives of the Commonwealth Government.

The ACMA is guided by its Principles for Spectrum Management in fulfilling the objectives of the 400 MHz review. In particular:

acma | 13 > Principle 1—Allocate spectrum to the highest value use or uses: Harmonised government spectrum will be used by government agencies to facilitate radiocommunications interoperability. The ability to interoperate adds considerable value, not only in the day to day activities of government agencies, but most importantly in response to major incidents. Additionally, consolidation of spectrum use by government, the largest users of the 400 MHz band, and facilitation of integrated government radio networks, will result in spectrum dividends that will benefit users across the entire 400 MHz band. > Principle 3—Use the least cost and least restrictive approach to achieving policy objectives: The split band approach detailed in Chapter 3 addresses a number of the concerns expressed by affected stakeholders in response to the harmonised government band put forward in the Proposals Paper. The ACMA believes these arrangements are the lowest cost and least restrictive approach to achieving the policy objective of harmonised government spectrum, without compromising interoperability objectives or government’s ability to establish large government radio networks. > Principle 4—To the extent possible, promote both certainty and flexibility: By setting aside spectrum exclusively for certain government agencies, the ACMA is promoting certainty for government users. Additionally, the split band approach provides government with the flexibility to use a range of technologies, and minimises the number of non-government organisations that would otherwise need to migrate.

Objective 2: Improve the allocative, technical and dynamic efficiency with which spectrum in the band is allocated and used, by reviewing the relevant frequency assigning and licensing mechanisms (including Band Plans, licensing instructions, licensing options and pricing) A number of changes have been identified to improve the allocative, technical and dynamic efficiency with which spectrum in the 400 MHz band is used. Firstly, after extensive consultation with stakeholders and detailed consideration, the ACMA has determined that it will recommend to the Minister that the spectrum currently designated for spectrum licensing in the upper segment of the 400 MHz band (referred to as the 500 MHz spectrum licences) revert to an apparatus licensing regime. The ACMA believes that this will result in the overall public benefit derived from the efficient use of this spectrum being maximised. The ACMA will accordingly make a recommendation to the Minister to revoke the relevant spectrum licence designation notice, as discussed in Chapter 6.

The ACMA does not make its recommendation lightly and remains committed to the use of spectrum licensing where it is considered the best tool to achieve the objects of the Act. Consistent with this, the ACMA will further explore the use of spectrum licensing to authorise use of the government-dedicated segments in the band once transition to new arrangements has been completed. It will also continue to investigate the concept of band management in the non-government segments of 450–470 MHz once overall transition to the new arrangements has been completed. Spectrum licensing could be one of the tools used to further this concept. The ACMA will also pursue the use of spectrum licensing to authorise use of a 2  400 kHz segment of spectrum currently predominantly used by the rail industry, as discussed in Chapter 3. Given the current dominant use of this spectrum by a single user group which is seeking increased surety of access, spectrum licensing is considered a potentially useful way forward.

In addition to this change in licensing arrangements, a number of improvements to the underlying technical arrangements in the band have been identified, including reduction in channel bandwidths and updates to the assignment and coordination

14 | acma rules. As discussed, draft RALIs implementing these improvements are attached to this paper for stakeholder feedback. The ACMA believes that these reforms will improve the technical efficiency with which the band is allocated and used.

As part of the ACMA’s implementation of opportunity cost pricing of spectrum, a revision of fee arrangements in the band has been undertaken. As discussed in section 7.3, the spectrum tax in high density areas (Sydney, Melbourne and Brisbane) will be increased three-fold over five years commencing in April 2011. Additionally, the ACMA has committed to reduce fees in the same timeframe in some remote areas. The ACMA believes that these changes in the pricing arrangements in the band will better reflect the value of the spectrum in this band and the demand for this spectrum in different areas. This more effective pricing regime will assist in improving the efficiency of spectrum use in the band.

The ACMA has also identified a number of reforms in the UHF Citizen Band, which is part of the 400 MHz spectrum. As further discussed in Chapter 5, these changes primarily involve increasing the number of channels available through a reduction in channel bandwidth. The ACMA believes this will improve the utility of the band while balancing future flexibility with the impact on existing users of this service.

In identifying measures to improve the allocative, technical and dynamic efficiency with which spectrum in the 400 MHz band is allocated and used, the ACMA has considered the Principles for Spectrum Management and is of the view that the changes identified best meet the Principles. In particular: > Principle 1—Allocate spectrum to the highest value use or uses: The ACMA believes that reversion of the segments in the 400 MHz band currently issued under spectrum licences to an apparatus licensing regime will maximise the public benefit derived from the use of this spectrum and allow spectrum to be allocated to its highest value use. > Principle 2—Enable and encourage spectrum to move to its highest value use or uses: By facilitating the use of narrowband and other spectrally-efficient technologies, the ACMA is enabling spectrum to be used more efficiently. > Principle 3—Use the least cost and least restrictive approach to achieving policy objectives: The improvements identified achieve a balance between the cost to users and improving the utility of the 400 MHz in a timely manner. The phased approach to transition, as discussed in Chapter 8, allows users to implement new technical measures over time and simultaneously with other changes. This decreases costs to users as they only have to modify their systems once. > Principle 4—To the extent possible, promote both certainty and flexibility: New technical arrangements, namely the facilitation of 6.25 kHz channel bandwidths, provide flexibility for users to adapt to changing technology. Additional flexibility has also been provided in assignment and coordination instructions regarding the use of terrain in the assignment process enabling licences to be issued that may not be able to be issued under current arrangements. > Principle 5—Balance the cost of interference and the benefits of greater spectrum utilisation: Changes to the assignment and coordination rules will facilitate greater spectrum utilisation which is balanced against the risk of increased interference in the band.

Objective 3: Facilitate new technologies and possible complementary uses of the band Chapter 4 describes arrangements for a 10 MHz duplex frequency split in the two- frequency land mobile segments of the 450–470 MHz sub-band. Under these new arrangements, the use of technologies previously precluded from the band will be enabled. These technologies include the trunked land mobile system TETRA.

acma | 15 Additionally, the facilitation of 6.25 kHz channel bandwidth, as discussed in Chapter 7, will encourage the use of spectrally-efficient technologies.

The ACMA has considered the Principles for Spectrum Management in facilitating new technologies and possible complementary uses of the 400 MHz band. The ACMA is of the view that the changes detailed in this paper best meet the Principles. In particular: > Principle 2—Enable and encourage spectrum to move to its highest value use or uses: By implementing a 10 MHz duplex frequency split in 450–470 MHz, existing technologies will be able to continue use of the band as well as new technologies being facilitated. In collaboration with pricing arrangements detailed in section 7.3, these arrangements will enable and encourage the use of spectrally-efficient technologies and therefore maximise the public benefit derived from the use of this spectrum. > Principle 4—To the extent possible, promote both certainty and flexibility: A 10 MHz duplex frequency split will provide maximum flexibility for users, enabling them to choose the preferred technology for their systems, and allow the implementation of new technologies.

Objective 4: Implement arrangements that take advantage of the different spectrum management requirements and challenges between different geographic areas The new arrangements detailed throughout the paper, and the corresponding transition plan consolidated in Chapter 8, vary across geographic areas. In areas outside of high and medium demand areas, where the 400 MHz band is less congested, less restrictions and longer timeframes are proposed in the transition plan.

Recognising geographic and demographic differences across the country has been a strategy of the ACMA throughout the review of the 400 MHz band. In designing the transition plan especially, the ACMA has developed different arrangements in different geographic locations with a view to decreasing the costs to users where possible.

The ACMA has considered the Principles for Spectrum Management in implementing arrangements that take advantage of the different spectrum management requirements and challenges between different geographic areas. It is the belief of the ACMA that the arrangements detailed best fulfil the Principles, including: > Principle 3—Use the least cost and least restrictive approach to achieving policy objectives: By taking into account varying demographics in new arrangements, costs and restrictions are minimised in areas which not congested. Extended timeframes for transition outside of high and medium demand areas are a particular method of minimising costs while ensuring policy objectives will be implemented.

Objective 5: Minimise the requirement for ongoing ACMA intervention in the band A number of major changes have been identified to be implemented in the 400 MHz band over the coming years. While these changes will have a large impact on current users of the band, the ACMA believes that the new arrangements will serve the community for many years into the future and minimise the requirement for ongoing ACMA intervention in the band.

In particular, accommodating 6.25 kHz equipment, which was requested by some stakeholders in response to the Options Paper, will allow new generations of technology to be used in the band. Additionally, the improved assignment and coordination arrangements rectify a number of the issues that have been identified

16 | acma throughout the course of the review and will improve the utility of the band by addressing existing limitations, restrictions and omissions.

In minimising the requirement for ongoing ACMA intervention in the band, the Principles for Spectrum Management has been considered by the ACMA. Particularly relevant to this objective of the review are: > Principle 2—Enable and encourage spectrum to move to its highest value use or uses: By facilitating the use of narrowband and other spectrally-efficient technologies, the ACMA is enabling spectrum to be used more efficiently into the future as these technologies become more widely available without the need for further changes to the band. > Principle 3—Use the least cost and least restrictive approach to achieving policy objectives: By making significant rather than incremental changes, the ACMA believes cost and disruption to licensees will be reduced in the long run. While some of these changes will still have a major impact, the ACMA believes that ‘future proofing’ this band for the longer term is more efficient and would have less impact than reviewing the band again in the medium term. Additionally, by not mandating the use of 12.5 kHz or lower channel bandwidth outside high and medium density areas, the ACMA is minimising the cost of changes to users by facilitating the move to more spectrally-efficient systems over time. > Principle 4—To the extent possible, promote both certainty and flexibility: The ACMA is facilitating 6.25 kHz channel bandwidth in all areas, however use of 12.5 kHz or less channel bandwidth is only being mandated in high and medium demand areas. This promotes flexibility for users outside high and medium demand areas to move to more spectrally-efficient equipment over time without further ACMA intervention.

acma | 17 3 Identification of a harmonised government band

A major objective of the review of the 400 MHz band has been to improve the harmonisation of spectrum use by certain government agencies to assist in radiocommunications interoperability objectives and the development of efficient government networks.

There is a longstanding and widely acknowledged requirement for improved radiocommunications interoperability between federal, state and territory national security, law enforcement and emergency service agencies. The need for improved interoperability, while important in day to day activities, becomes paramount in the response of government agencies to major incidents including natural disasters and terrorist attacks.

The ACMA has broad spectrum management powers of relevance to interoperability. The identification of harmonised spectrum for government needs is an important enabler of interoperability, although, as acknowledged by the ACMA in the past, harmonised spectrum arrangements alone do not lead to a complete interoperability solution. Broader support, guidance and commitment from Australian governments and individual government agencies is essential for comprehensive interoperability objectives to be realised.

This commitment has occurred since the release of the Proposals Paper through the development of a National Framework to Improve Government Radiocommunications Interoperability (the National Framework) by the National Coordinating Committee for Government Radiocommunications (NCCGR). The National Framework was agreed to by each of the members of the NCCGR and subsequently endorsed by the Council of Australian Governments (COAG) on 7 December 2009.9

The ACMA was closely involved in the development of the National Framework and believes that this nationally agreed document provides the necessary commitments, and when combined with the complementary ACMA spectrum management arrangements, provides the nation with a genuine opportunity to achieve improved interoperability that has so far proved elusive.

Improved radiocommunications interoperability is not the only objective that the identification of harmonised spectrum for government is aiming to achieve. The arrangements surrounding the identification of harmonised spectrum for government will provide certainty to government users and provide incentives for the consolidation and efficient use of government spectrum. In addition, by consolidating government users (the largest group in the 400 MHz band) into a block of spectrum, and providing incentives for them to use the band efficiently, resulting spectrum efficiency dividends will benefit all users of the band, including non-government users.

To address these objectives, the ACMA has decided that several segments in 403– 470 MHz will been identified for the exclusive use of government, primarily to support national security, law enforcement and emergency service, but available to support broader government use once these requirements are met. Government users will be permitted to continue to operate in some other parts of the 403–470 MHz band

9 www.coag.gov.au/coag_meeting_outcomes/2009-12-07/docs/20091207_communique.pdf

18 | acma (trunked use can continue but not expand and fixed use may continue as per existing arrangements).

These arrangements will provide 20.5625 MHz of dedicated spectrum to support government land mobile requirements, almost all of which is immediately useable for two-frequency land mobile networks and 4.975 MHz of which will be available in the medium term for networks requiring a 10 MHz frequency split. Government users will be expected to concentrate in the dedicated government segments over a number of years, to ensure that their spectrum use is consistent with efficiency and interoperability objectives.

These arrangements have been developed in close consultation with stakeholders, and complement objectives developed by the relevant committees and COAG-agreed National Framework. The ACMA believes that through the provision of technically compatible spectrum within the normal tuning range of systems, and the planning certainty offered by dedicated spectrum, these arrangements will better facilitate interoperability and the deployment of efficient government radio networks.

3.1 Background The 400 MHz band is heavily used by government in the provision of land mobile services for federal, state and territory government national security, law enforcement and emergency services. Radiocommunications interoperability, defined as the ability of users to communicate by radio, with whom they need to, when they need to, when authorised, is a key capability for these agencies.

A number of committees and working groups have been established to consider government agency interoperability and related spectrum issues. These include the: > National Coordinating Committee for Government Radiocommunications (NCCGR)10 > Law Enforcement and Security Spectrum Committee (LESRSC)11 > Australian Government Radiocommunications Working Group (AGRWG).12

The NCCGR and LESRSC in particular are well established committees that have completed strategic plans which are relevant to the identification of a government band and particular interoperability requirements. The ACMA’s work towards identifying a government band is closely linked with the ongoing work of these committees, within which the ACMA is an active participant.

Improving the harmonisation of spectrum use by these government agencies is a major driver of the review of the 400 MHz band. The Options Paper raised the prospect of harmonising government spectrum use in the 403–430 MHz band, along with the already identified 420–430 MHz band, and discussed how this spectrum might be managed. Respondents to the Options Paper generally supported a block of spectrum for government use, whether it is in 403–420 MHz or elsewhere in the 400 MHz band. However, a majority of respondents supported the use of 403– 430 MHz as an exclusive government band.

10 The NCCGR reports to the Council of Australian Governments (COAG) through the National Counter Terrorism Committee (NCTC) on counter-terrorism radiocommunication matters and through the jurisdictional First Minister’s representatives for radiocommunication matters of broader national importance. 11 The LESRSC reports to COAG through the Ministerial Council for Police and Emergency Management. 12 The AGRWG reports to the Australian Government Counter-Terrorism Policy Committee.

acma | 19 A number of objectives were identified in the Proposals Paper to guide the ACMA’s consideration on this issue: > improve radiocommunications interoperability between government security, law enforcement and emergency services > maximise technology and equipment options for governments/agencies > maximise long term certainty in spectrum access for government users > minimise restrictions on the federal, state and territory government use of the band, provided certain minimum requirements are met supporting the needs of security, law enforcement and emergency services > provide incentives for the consolidation of government spectrum use in the identified band and to use that spectrum efficiently > provide sufficient transition time and appropriate transition arrangements to ensure continuity of access to spectrum and therefore provision of government services > maximise the overall benefits to the broader Australian community that the formation of harmonised government spectrum in 400 MHz brings.

3.2 Original ACMA proposal In the Proposals Paper, the ACMA proposed: > the 403–430 MHz band (less Defence and EPIRB segments) be identified for the exclusive use of federal, state and territory governments > this band be primarily used to enable interoperability between government agencies providing security, law enforcement and emergency services (defined as tier 1 users) > other federal, state and territory government users (referred to as tier 2 users) be permitted to use the band, contingent on the requirements of security, law enforcement and emergency services uses being adequately supported. This use of the spectrum would be determined and prioritised by the states/territories individually without ACMA prescription. > a segment of this band be identified for federal agency use, provided interoperability between government agencies providing security, law enforcement and emergency services can be demonstrated > the entire block of spectrum should be made available on a state or territory-wide basis as a single licence, with fees payable at an annual amount, independent of the number of devices operated under the licence > that apparatus licensing be continued to be used to authorise use of the band initially and that spectrum licensing be explored later > that existing non-government licensees in the 403–430 MHz band transition out of the band within five years in high and medium density areas, and eight years in the rest of the country > that existing government arrangements outside of the 403–430 MHz band be removed no sooner than in five years time > relevant national committees, primarily the NCCGR and LESRSC, determine solutions for interoperability and identify mechanisms that can be used by the ACMA to further enhance interoperability objectives via spectrum management arrangements.

3.3 Stakeholder feedback Many stakeholders, mainly government users, supported the proposals detailed in the Proposals Paper. However, there was significant opposition to the proposal from incumbent commercial users. In particular, users of fixed and trunked segments in the proposed government band objected to the proposal due to a lack of immediately

20 | acma available alternate fixed and trunked spectrum elsewhere in the band, and the costs that would be incurred to undertake a transition to new spectrum. One response suggested that minimising the impact on these users should be an additional objective for the ACMA in determining a government band (particularly since these systems are using spectrally efficient 12.5 kHz trunked systems).

Some potential tier 2 users of dedicated government spectrum, particularly the rail industry, were concerned with the definition of tier 1 access. These users considered it important that they be provided dedicated access to this spectrum as tier 1 users, rather than having to seek agreement from individual jurisdictions to gain access as tier 2 users. Arguments given for this concern were the need for rail radiocommunications interoperability between jurisdictions and the need for certainty of spectrum access.

Both government and commercial users expressed some concerns on the timeframes for transition to new arrangements with generally longer timeframes preferred to facilitate changes and minimise costs.

Federal agencies strongly supported the identification of a dedicated federal agency- only segment in the harmonised government band, in line with ACMA’s original proposal.

Predictably, the size of the spectrum dedicated to government users was a topic of substantial sensitivity. In response to the Proposals Paper, government users wanted at least the proposed amount if not more, while other users where concerned that the band was too large.

Some respondents expressed concerns that a dedicated government band will not be used efficiently or that harmonised spectrum was neither necessary nor sufficient to achieve interoperability.

3.4 The ACMA’s response to feedback 3.4.1 The need for harmonised government spectrum The ACMA is of the firm view that dedicated harmonised spectrum of appropriate size and structure is critical to the provision of interoperable radiocommunications between national security, law enforcement and emergency services. It is also of the view that such arrangements assist in the development of large, spectrally (and infrastructure) efficient government radio networks.

The ACMA therefore remains committed to fulfilling the stated objectives for a harmonised government band articulated in the Proposals Paper.

Views have been expressed that harmonised spectrum is not necessary to achieve interoperability. The ACMA agrees that harmonised spectrum alone does not lead to interoperability, but believes that at least two spectrum-related prerequisites are necessary.

Firstly, spectrum must be available to the relevant users within the equipment tuning range of the systems deployed. Typically this range is around 70 MHz between 400 MHz and 470 MHz or 450 MHz and 520 MHz.

Secondly, dedicated spectrum provides the long term planning certainty for disparate jurisdictions to work towards appropriately compatible networks. Without such planning certainty, jurisdictions will need to continue to develop and deploy networks opportunistically and in an ad hoc manner, in whatever spectrum that is available throughout the entire 400 MHz band. This is likely to lead (as it has today) to some

acma | 21 jurisdictions deploying networks that are outside the tuning range of other jurisdictions systems. In addition, spectrum that is contiguous to the extent possible is preferable as it provides increased opportunities for planning, assignment and implementation optimisation.

3.4.2 Use of government band The ACMA continues to believe that the tiered approach to access to the government band remains the best approach to providing certainty of access and flexibility for jurisdictions.

The interoperability requirements of the rail industry are acknowledged, however the ACMA is of the view these are not sufficient for the entirety of the rail industry’s requirements to be met within a dedicated band. Rather, it is of the view that a much smaller amount of spectrum to meet core interoperability objectives is potentially justifiable. The ACMA therefore believes that rail will continue to be considered a tier 2 user of dedicated government spectrum.

The ACMA will however retain a reduced segment of 2  400 kHz outside the government band that is currently predominantly used by the rail industry under an informal ‘Railways of Australia Plan’, and investigate future spectrum licensing approaches to permit the rail industry the opportunity to potentially obtain increased certainty of access to the band. This approach is discussed in greater detail in section 3.4.4.

3.4.3 Size of the government band Determining the appropriate size of dedicated government spectrum is difficult and sensitive to the variability of a wide range of parameters, including the number of users on the system, quality of service requirements, coverage targets, growth expectations, voice versus data requirements and technology assumptions.

While the needs of government in the 400 MHz band are clearly important, particularly to those agencies providing security, law enforcement and emergency services, continued access to the band for other parts of the Australian community is also important. The amount of spectrum made available specifically for government users, and its location in the 400 MHz band, needs to be critically considered—a balance needs to be reached between spectrum identified for government use and spectrum available for other uses.

In Australia, the combined requirements of federal agencies and the NSW Government (as the largest state/territory user) determine the maximum amount of spectrum required.

A general estimate by the ACMA based on currently licensed spectrum indicates that around 19 MHz may be sufficient for the high density area of Sydney using current technology assumptions. Spectrum claims have been made by federal agencies (2  1.25 MHz) and the NSW Government (2  12.4 MHz) for their respective networks. These claims, totalling 27.3 MHz, are larger than estimates developed internally by the ACMA. Attachment 5 provides a summary of the analysis used to derive these claims.

This discrepancy can in part be attributed to the NSW Government estimates being based on the spectrum required for a comprehensive government radio network (utilising existing technology) supporting more than just the needs of tier 1 users. While it has been acknowledged that these tier 1 users constitute the majority of these spectrum needs, the specific fraction has not been identified. In addition, the federal agencies’ claims for 1.25 MHz have been based on the requirements of existing

22 | acma systems, utilising disparate, conventional legacy radio networks, rather than a more spectrally-efficient, consolidated, trunked approach.

The original ACMA proposal was to identify 25.4 MHz within 403–430 MHz as the dedicated government band. Of this 25.4 MHz, only approximately 21.85 MHz would be immediately available for two-frequency systems. None of this system would be immediately available for systems such as TETRA, which requires a 10 MHz frequency split, specific transmit sense and in specified frequency segments.

As identified earlier, respondents to the Proposals Paper had varying views on the appropriateness of the proposed size of the government band, with government users wanting at least the proposed amount if not more, while other users where concerned that the proposed band was too large.

In reviewing these responses, the ACMA considered it important to make a distinction between spectrum necessary to meet land mobile interoperability requirements and spectrum used for fixed services, where there are considerably fewer drivers for interoperability; and between two-frequency (as the predominant need) and single frequency requirements.

Firstly, given the reduced (essentially zero) requirement for interoperability of fixed networks and the lack of scope to achieve spectrum efficiencies through dedicated spectrum, the ACMA is of the view that there are insufficient drivers for fixed spectrum to be dedicated for government use. Government users can effectively operate on an equal status with other users in shared fixed spectrum or re-farm dedicated spectrum to fixed uses at its discretion once tier 1 uses are met. In addition, the ACMA considers that immediately available two-frequency compatible spectrum (as opposed to single frequency spectrum) is at a premium for government use. Spectrum that is readily made compatible with alternate spectrum efficient technologies not currently supported (such as TETRA requiring a 10 MHz split in certain segments of the 400 MHz band for equipment availability reasons) is also preferable.

The ACMA has therefore concluded that around 20 MHz of two-frequency compatible spectrum (of which 4.975 MHz is available at a 10 MHz split) is sufficient for tier 1 government land mobile needs, and provides a very good basis for the development of broader government radio networks incorporating tier 2 users. Longer term government communications needs would be readily accommodated in this spectrum through the use of more spectrally-efficient technologies (for example using 6.25 kHz equivalent channel approaches).

3.4.4 Location and structure of government band The ACMA has considered feedback from stakeholders regarding the location and structure of the proposed harmonised government band received in response to the Proposals Paper. Of the feedback received, notable concerns included: that there was no immediately available alternate spectrum suitable for non-government users in 403–420 MHz to relocate to; that the costs that would be incurred by users relocating, particularly beyond the tuning range of existing equipment (i.e. above 470 MHz) were significant; and that the users in the existing trunked segment are already operating in a highly spectrally-efficient way (12.5 kHz channels and trunking techniques). Government users also expressed some preferences for retaining access to 450–470 MHz, in part due to the existing networks deployed in the established LEPS13 band.

The ACMA acknowledges that these concerns are real and substantial, and agrees that measures should be taken to minimise these effects as much as possible without compromising the objectives of the review. In particular, the stakeholder feedback observing that a further objective in identifying a harmonised government band should

13 Law Enforcement Public Safety

acma | 23 be to minimise the impact on the existing spectrally-efficient trunked segment in 403– 420 MHz. While such an objective was implicit in the established objectives of the review and in identifying a harmonised government band, the ACMA agrees that the explicit identification of this objective is warranted.

Given the reduced interest in wireless access services (WAS) in 450–470 MHz (discussed in greater detail in Chapter 4), the ACMA has identified opportunities to reduce, though not remove entirely, these concerns. This is achieved through the use of a split band approach for the provision of harmonised government spectrum in various segments throughout 403–470 MHz, rather than by an essentially contiguous block in 403–430 MHz as originally proposed.

Such an approach includes the retention or expansion of the LEPS segment in 450– 470 MHz to government and some segments in 403–430 MHz being retained for either non-government only use or on a shared basis.

There are several possible options to implement a split band approach, several of which were the subject of discussion within the 400 MHz RCC Working Group. The feedback to this approach was generally favourable, with specific preferred options being dependent on the stakeholder’s exposure in each segment.

The NCCGR responded in support of Option 3 (though there was some interest in Option 2), while commercial stakeholders, such as the Australian Radio Communications Industry Association (ARCIA) supported Option 2 as it retained the fixed and trunked segments for commercial purposes.

The ACMA has considered carefully the various options available to addressing the objectives of the review as they relate to the identification of harmonised government spectrum. It determined that an optimised Option 2 split band approach provides the optimal outcome. This approach is outlined in detail below: > Segments A/I, C/K, F/N less the bottom 400 kHz (see discussion below), L, 420– 430 MHz (less Defence segments) and the band of 457.5–459.9875 MHz paired with 467.5–469.9875 MHz (2  2.4875 MHz ultimately with a 10 MHz split) would be identified exclusively for government use. > Use of the existing trunking segments E/M would continue on a shared basis. However, only commercial users would be allowed to expand networks in these segments. Government would use the exclusive government spectrum to expand their networks. The ACMA will review continued access of government to the trunking segments E/M in the future following the further development of the National Framework. > Fixed segments would remain shared between commercial and government users for fixed services. > Single frequency segments G and H would be dedicated for commercial users.

It is noted that under current arrangements approximately 800 kHz paired (40 25 kHz paired channels) in the lower end of segments F/N is used predominantly by the rail industry under an informal ‘Railways of Australia Plan’. The lower 400 kHz paired of F/N will not be included in the government band and will remain available under legacy arrangements (but with mandatory use of 12.5 kHz channelling). The prospect of spectrum licensing these segments will be investigated at a later date. The rail industry currently uses 25 kHz channelling, so 400 kHz paired of spectrum using 12.5 kHz channelling will be roughly equivalent on a per channel basis and is seen as a reasonable amount of spectrum to support core rail industry needs. The top 400 kHz of this spectrum will be identified for exclusive government use meaning that the rail industry could negotiate with government for continued access to this spectrum as a tier 2 user with the agreement of the jurisdictions.

24 | acma The approach for harmonised government spectrum is summarised in Figure 2.

Figure 2 Extract from the 400 MHz Plan showing segments dedicated to government

403 420 430

0 0 2 1

1 0 1 0 0 2

. 5 1 . . 9

9 9 . . .

0 3 9 9 5

8 8 3 1

2 1 7 2 7 2 2

5 2 7 5 5

5 5 5 5

M M M M M M

H H H H H H

H H H H

z z z z

A B C E F G H I J K L M N

9.45 MHz Split 450 470

P Q R S T U V W X Y

9.5 MHz Split

10 MHz Split (Dashed)

Dedicated government use Potential candidate for S/L Defence use

Dedicated commercial use Shared government and commercial use (No gov expansion)

Shared government and commercial use Mobile-satellite

This approach reduces relocation requirements for government users, compared to other split band implementations considered. Under this approach, no existing government two-frequency land mobile network in 403–430 MHz will be required to relocate, which is consistent with the original ACMA proposal. Additionally, commercial access to the fixed and spectrally efficient trunked segments in 403–420 MHz is maintained. This is especially important due to the difficulty in finding a ‘greenfields’ trunked segment, given the plan to expand government use of 450–470 MHz made possible due to reduced interest in the band for WAS.

The split band approach will reduce the cost of new arrangements on both government and commercial users. Additionally, the option for government to use technology requiring a 10 MHz frequency split (supporting TETRA for example) will be more easily facilitated under the split band approach.

Most importantly, the ACMA and government users are confident that the split band approach will not compromise interoperability objectives as it provides both technically suitable spectrum for interoperable radiocommunications (i.e. within the typical tuning range of systems) and planning certainty.

One necessary consequence of this approach is that those jurisdictions with current extensive exposure within the trunked E/M block will be afforded greater spectrum

acma | 25 access that other jurisdictions. However, as noted earlier, the ACMA will review government access to this segment in the future. While there is no option that is ‘perfect’—in that all objectives are perfectly met and stakeholders entirely content—the ACMA believes that the approach detailed above provides the best practical solution available.

3.4.5 Management and licensing of the government band The licensing and ongoing management of the dedicated government spectrum is acknowledged as a critical component of its efficient and effective use. The ACMA considers it imperative that not only is the spectrum used effectively to achieve the operational requirements (particularly desired interoperability outcomes) of government agencies, but that it is used as efficiently as possible so as not to waste spectrum.

Since the Proposals Paper, jurisdictions and government have made substantial progress towards improved interoperability governance by way of the COAG agreed National Framework to Improve Radiocommunications Interoperability. This high level mandate and associated ongoing work of the NCCGR will provide critical guidance to the effective use of the dedicated spectrum to achieve interoperability outcomes. Integral to this progress will be the increased awareness and responsibility of jurisdictions in the management of these spectrum holdings that becomes feasible with the identification of dedicated spectrum.

To support this increased responsibility for jurisdictional involvement in spectrum management, and to encourage efficient spectrum use, the ACMA is of the view that spectrum licensing the entire dedicated spectrum resource to jurisdictions will be the most appropriate way to authorise use of the this spectrum in the long term.

However, in the interim, while the substantial structural changes in the band are under way, the ACMA is of the view that the continued use of apparatus licensing is the most appropriate approach, with licence fees reflecting the opportunity cost increases outlined elsewhere. Users of the government spectrum will have an explicit obligation (by way of a licence special condition) to use the spectrum consistent with the National Framework. This is also considered necessary to ensure that the interoperability objectives are retained, and the spectrum is used in a consistent way through the country.

3.5 Final decision The final ACMA decision on the identification of a harmonised government band is: > Segments A/I, C/K, 410.04375 to 410.54375 MHz and 418.49375 to 420 MHz of F/N, L, 420–430 MHz (less defence segments) and 457.5–459.9875 MHz paired with 467.5–469.9875 MHz (2  2.4875 MHz) would be identified exclusively for government use. Consistent with broader review outcomes on improved efficiency in spectrum use, the use of 12.5 kHz or lower bandwidth channels would be expected. > This dedicated spectrum will be primarily used to enable interoperability between federal, state and territory government agencies providing security, law enforcement and emergency services (defined as tier 1 users). > Other government users (tier 2 users) are permitted to use the band contingent on the requirements of security, law enforcement and emergency services uses being adequately supported. This use of the spectrum would be determined and prioritised by the federal/state/territory jurisdictions without ACMA prescription. > The existing trunking segments E/M would continue to be used on a shared basis between commercial and government users. However, only commercial users would be allowed to expand networks in these segments. Government would use

26 | acma the exclusive government spectrum to expand their networks. The ACMA will review continued government access to the trunking segments E/M in the future, following the further development of the National Framework. > Segments B/J, Q/U and R/V would remain shared on an equal basis between commercial and government users for fixed services. > A segment of the dedicated government band will be identified for federal agency use, provided interoperability between government agencies providing security, law enforcement and emergency services can be demonstrated. The size of this segment will be determined through consultation between the ACMA, NCCGR, LESRSC and federal agencies and be no more than 2  1 MHz and no less than 2  0.6 MHz. > Apparatus licensing will continued to be used to authorise the use of the band initially and spectrum licensing, including the identification of an appropriate fee, be explored after transition to new arrangements has concluded. > The ACMA will mandate, through the use of licence special conditions, that use of the dedicated government segments be consistent with the COAG agreed National Framework and any associated planning arrangements.

This approach provides 20.5375 MHz of dedicated harmonised government spectrum, with 4.975 MHz supporting a 10 MHz split in the medium term. In addition, 6.075 MHz will be available on a shared basis between government and commercial users, and suitable for fixed applications. Government will also have continued access, without growth, to 5.0625 MHz of trunked spectrum.

3.6 Proposed transition arrangements It is proposed that existing non-government users transition out, and government users transition into, the harmonised government spectrum within five years in high and medium density areas and eight years in the rest of the country.14 Transition arrangements are further discussed in Chapter 8.

14 Those licensees closer than the reuse distance of their service to the boundary of a medium density area and a low or remote density area will be required to meet the high and medium density area deadlines. This is further discussed in Chapter 8.

acma | 27 4 Changes to arrangements in 450–470 MHz

The 450–470 MHz segment of the 400 MHz band is one of the most attractive for traditional land mobile and fixed uses. A large portion of the 450–470 MHz band is currently dedicated to two-frequency land mobile services on a 9.5 MHz duplex frequency split. While some technologies, such as APCO P25, are facilitated under current arrangements, other technologies, including TETRA, require a 10 MHz duplex frequency split to operate in this band and therefore are unable to be deployed. In addition, the World Radiocommunication Conference, 2007 (WRC–07) identified the 450–470 MHz band for use by administrations wishing to implement International Mobile Telecommunications (IMT) (technologies that utilise a 10 MHz split).

In deciding on future arrangements in the 450–470 MHz band, the ACMA’s primary objective is to facilitate the band moving to its highest value use over time without substantial ACMA intervention, while balancing certainty and flexibility, in line with the second and fourth of the ACMA’s Principles for Spectrum Management.

4.1 Background Consideration of changes to arrangements in the 450–470 MHz band began in the Options Paper, where the ACMA sought comment on the possibility of making spectrum available in the band for wireless access services (WAS), including IMT. Opinion was split in response to the Options Paper. Some respondents were in support of making spectrum available for WAS in this band, especially in rural areas. However, others opposed the introduction of WAS in the 450–470 MHz band, citing concerns that this would exacerbate land mobile congestion in the band.

In addition, there was significant stakeholder interest in enabling the use of alternate land mobile technologies in the band, such as TETRA, which are not supported by existing planning arrangements.

4.2 Original ACMA proposal In the Proposals Paper, the ACMA proposed: > establishing a minimum of 2  5 MHz, 10 MHz split segments to facilitate use of a greater range of technologies: 452.5–457.5 MHz paired with 462.5–467.5 MHz (supporting a range of future options) > leaving existing single frequency and fixed point-to-point and point-to-multipoint segments in this band untouched > maintaining 9.5 MHz duplex splits in remaining segments.

In addition, the ACMA sought comment on the possibility of maximising the spectrum available on a 10 MHz duplex frequency split, by identifying additional spectrum beyond the proposed 2  5 MHz up to a maximum of 2  7.4875 MHz on a 10 MHz duplex frequency split. It was proposed that expansion of the spectrum available on a 10 MHz duplex frequency split could occur in stages.

Three options for licensing and allocation of the spectrum on a 10 MHz duplex frequency split were also outlined in the Proposals Paper. 1/ Re-allocation by issuing spectrum licences with a two year reallocation period, and an additional licensing condition that incumbent licensees must be allowed access to the band for a period of five years.

28 | acma 2/ Re-allocation by issuing spectrum licences with a five year reallocation period, and no additional licensing condition relating to continued access of incumbent licensees to the band. 3/ Issuing apparatus licences with licences initially issued only to existing licensees. Priority for remaining licences would be given to users displaced due to changes elsewhere in the band. Under this option, 3 MHz paired of spectrum in the band on a 10 MHz duplex frequency split would be identified for trunking systems.

4.3 Stakeholder feedback The majority of submissions to the Proposals Paper supported the proposal to establish a minimum of 2  5 MHz on a 10 MHz duplex frequency split in 450– 470 MHz. There was also substantial support for maximising the spectrum available on a 10 MHz duplex frequency split up to 2  7.4875 MHz, either from the outset or via a staged approach. There was however considerable stakeholder trepidation regarding the cost of moving to a technology flexible 10 MHz split in 450–470 MHz.

Comments received on preferred licensing and allocation options for the proposed 10 MHz duplex frequency split spectrum in the 450–470 MHz band indicated that apparatus licensing was preferred by users of traditional services such as land mobile and fixed applications. Spectrum licensing was preferred by two proponents of CDMA450 and two organisations with intentions to introduce wireless access services in the band. Respondents with a preference for spectrum licensing preferred option 1 proposed in the discussion paper (where the reallocation period would be two years) with the ACMA imposing a licensing condition that incumbent licensees must be allowed access to the band for a period of five years from the Minister’s declaration.

4.4 The ACMA’s response to feedback 4.4.1 Change of frequency split and size of the band The ACMA acknowledges that any move to change frequency splits in 450–470 MHz will involve considerable cost and disruption to many users in the short to medium term. However, over the long term the ACMA believes that the technology options and flexibility provided by enabling a 10 MHz frequency split in band are worth the short to medium term disruption.

The ACMA believes that the broad objective of facilitating the 450–470 MHz band moving to its highest value use over time without substantial ACMA intervention, while balancing certainty and flexibility, is best achieved by maximising the amount of spectrum available on a 10 MHz duplex frequency split to 2  7.4875 MHz.

4.4.2 Introduction of WAS in the band Demand for the introduction of WAS in the 450–470 MHz band in the short to medium term has decreased significantly since the commencement of the review, with some international manufacturers no longer supporting equipment in the band. The need for explicit arrangements to support WAS in the band has therefore reduced. The ACMA will continue to monitor the need to facilitate the introduction of WAS in the band in the longer term.

4.4.3 Licensing and allocation options Given the decreased demand for WAS in the band, it is highly likely that land mobile services will continue to dominate in the 450–470 MHz band. The 400 MHz band is characterised by a large number of disparate users and is therefore suited to an apparatus licensing regime, as indicated by the preference for apparatus licensing by existing users of the band in response to the Proposals Paper.

acma | 29 4.5 Final decision 4.5.1 Technical arrangements The amount of spectrum to be established on a 10 MHz duplex frequency split will be maximised to 2  7.4875 MHz. This will involve changing the use of the current segment Y from single frequency to two-frequency land mobile. The top 2  2.4875 MHz of the 10 MHz segments will be identified as harmonised government spectrum as discussed in Chapter 3. Figure 3 illustrates the final 450–470 MHz arrangements.

Figure 3 New arrangements for the 450–470 MHz band

As outlined in the Proposals Paper, the duplex frequency split of the fixed service segments in the 450–470 MHz sub-band15 will remain unchanged.

As the trunking segments in the lower part of the 400 MHz band (406.1–408.6375 MHz paired with 415.5625–418.0875 MHz) are being retained for commercial and government use, no part of the spectrum on a 10 MHz split will be made available exclusively for trunking. Stakeholder feedback and advice from the RCC 400 MHz Working Group indicates that dedicated spectrum is not necessarily required to facilitate the use of trunking technologies. Therefore, arrangements will support both conventional and trunked use of the spectrum on a 10 MHz split.

4.5.2 Licensing and allocation arrangements The ACMA will continue to allocate 2  5 MHz of non-government dedicated land mobile spectrum via apparatus licence in the 450–470 MHz band, in line with apparatus licensing arrangements in the rest of the 400 MHz band. The ACMA will continue to monitor the demand for spectrum licensing in the band. In addition, the ACMA remains interested in the concept of band management, where a band of spectrum would be leased or sold to a band manager,16 and will explore opportunities for this in the 400 MHz band in the future.

15 The fixed service segments are segments Q, R, U and V in figure 3. 16 For more detail see www.acma.gov.au/WEB/STANDARD/pc=PC_2856

30 | acma 4.6 Proposed transition arrangements The following steps must occur in the transition to the new arrangements shown in Figure 3. This approach is based on the assessment that it is generally preferable for the base receive frequency of a system to be changed as opposed to the base transmit, and that to achieve the desired timeframes some moves will need to occur earlier.

1/ Users in 452.5–453 MHz and 462–462.5 MHz (shaded in grey in Figure 4) will need to relocate either elsewhere in the 450–470 MHz band, or into another part of the 400 MHz band. Spectrum in 440–450 MHz will also be made available in consultation with the Department of Defence on a temporary basis. Users in this part of the band in high and medium density areas will be required to relocate by 31 December 2012. Users outside of high and medium density areas will be required to relocate by 31 December 2013. Users that choose to relocate elsewhere in the 450–470 MHz band may initially have to operate on the current 9.5 MHz duplex frequency split. They will then need to retune to a 10 MHz duplex frequency split later in the transition.

Figure 4 Step 1 of transition to new arrangements in 450–470 MHz

2/ As depicted in Figure 5, single frequency users in the current segment Y (469.4875–469.9875 MHz) will need to relocate to new segment W (462–462.5 MHz) freed up in step 1 or elsewhere in the 400 MHz band. In addition, there are a number of two-frequency systems which will need to relocate elsewhere in the 400 MHz band. Users in this part of the band in high and medium density areas will be required to relocate by 31 December 2012. Users outside of high and medium density areas will be required to relocate by 31 December 2013.

acma | 31 Figure 5 Step 2 of transition to new arrangements in 450–470 MHz

3/ Following step 1, transition to a 10 MHz frequency split can commence. Users will be required to move the base receive segment of their systems down by 0.5 MHz or relocate elsewhere in the 400 MHz band. This step is depicted in Figure 6. Simultaneously, government users in 453–457.5 MHz and 462.5–467 MHz will relocate into harmonised government spectrum and non-government users in 457.5–459.9875 MHz and 467–469.4875 MHz will relocate elsewhere in the 450– 470 MHz band, or into another part of the 400 MHz band. The transition will be required to be made by 31 December 2014 in high and medium density areas and by 31 December 2015 outside of high and medium density areas.

Figure 6 Step 3 of transition to new arrangements in 450–470 MHz

32 | acma Following transition, 459.4875–459.9875 MHz paired with 469.4875–469.9875 MHz will be clear and available for the relocation of government users. However, government users will be able to relocate into this band any time throughout transition if the spectrum becomes available early.

The transition process will not necessarily follow the order stipulated above. For example, if a frequency is available, users in 452.5–459.9875 MHz will be able to retune to a 10 MHz split as early as desired. Similarly, government users will be allowed to relocate into 457.5–459.9875 MHz paired with 467.5–459.9875 MHz as early as desired provided frequencies are available.

Additionally, those licensees closer than the reuse distance of their service to the boundary of a medium density area and a low or remote density area will be required to meet the high and medium density area deadlines. This is further discussed in Chapter 8.

Table 1 summarises the plan for transition to new arrangements in 450–470 MHz. Note that obligations to transition to 12.5 kHz channels will occur in parallel with the structural changes detailed in this section. This will create ‘whitespace’ that will assist in the broader changes.

Table 1 Summary of the process for transition to new arrangements in 450–470 MHz

Step Description Deadline Deadline for for change in change HDAs and outside of MDAs HDAs and MDAs Users in 452.5–453 MHz and 462–462.5 MHz 1 31/12/2012 31/12/2013 relocate elsewhere in the 400 MHz band Users in 469.4875–469.9875 MHz relocate to 2 462–462.5 MHz or elsewhere in the 400 MHz 31/12/2012 31/12/2013 band Simultaneously with step 2, transition to 10 MHz 3 split occurs with users in 452.5–459.9875 MHz 31/12/2014 31/12/2015 reducing their frequency by 0.5 MHz

acma | 33 5 UHF Citizen Band Radio Service

The UHF Citizen Band Radio Service (CBRS) currently comprises 40 25 KHz channels from 476.4125–477.4125 MHz. Use of the CBRS is supported by a class licence. The band is highly utilised, which demonstrates that the existing regulatory approach is effective.

In reviewing the UHF CBRS, the ACMA’s objective is to improve the utility of the band through reviewing and updating current arrangements (such as channel bandwidths). Balancing future flexibility with the impact on existing users (in light of the extensive user base) is a particularly crucial consideration in this situation.

5.1 Background In the Options Paper, the ACMA introduced the concept of increasing the number of UHF CBRS channels from 40 to 80 by the implementation of 12.5 kHz channelization, with a corresponding phase-out of 25 kHz channel equipment. Responses to the Options Paper showed that this concept was worth pursuing in more detail.

5.2 Original ACMA proposal In the Proposals Paper, the ACMA proposed to undertake a process to implement revised arrangements for the UHF CBRS based on the following core concepts: > extension of the CBRS band by 6.25 kHz at the top edge of the band > the reduction to 12.5 kHz channels for CBRS simplex channels > the retention of 25 kHz channels for the eight (8) existing repeater channel pairs, including the emergency channels and the two (2) existing telemetry/telecommand channels > review of the coordination and assignment rules for repeater channels.

5.3 Stakeholder feedback Proposals for changes to the UHF CBRS received broad support from respondents to the Proposals Paper. Respondents stated that the proposed solution was a sound technical compromise, and that maintaining the existing 25 kHz channels for the eight existing repeater channel pairs, including the emergency channels and the two existing telemetry/telecommand channels, would decrease costs to users, and decrease interference during the phase-in period. Users of emergency channels also supported maintaining the emergency channel number allocations.

There was also a degree of support for the repeater channels to be reduced to 12.5 kHz, with additional repeater channels interleaved. This would provide additional capacity and therefore be beneficial in the long term. Some respondents proposed that this could be done as a second stage to the changes proposed by the ACMA, following sufficient time for the migration of equipment to 12.5 kHz channel bandwidth.

There was general support for a review of coordination and assignment rules for repeater channels. However, some respondents were concerned that this would increase interference.

34 | acma 5.4 The ACMA’s response to feedback The ACMA’s broad objective of increasing the utility of this spectrum is consistent with stakeholder feedback and suggestions. Given stakeholder support, a phased approach to implementing additional 12.5 kHz repeater channels seems feasible, and provides maximum utility for the future.

5.5 Final decision The final ACMA decision on the UHF Citizen band is as follows: > the UHF Citizen band shall be extended upwards by 6.25 kHz to accommodate an additional 12.5 kHz channel > all simplex voice channels shall transition to 12.5 kHz bandwidth > existing repeater channels will transition to 12.5 kHz bandwidth, with new repeater channels created in the interleaved space > the two telemetry/telecommand channels remain as is > the licensing rules regarding repeaters have been relaxed.

Channel arrangements are detailed in Attachment 6.

5.6 Proposed transition arrangements Before the new arrangements can be used, three key events must occur: 1/ new licensing arrangements must be put in place 2/ UHF CB equipment standards must be published and referenced in law 3/ manufacturers must make equipment available.

The ACMA has carriage of licensing arrangements and can implement changes in about six months. The ACMA participates in equipment standards formation, along with equipment manufacturers and other experts, and the process of modifying the existing standard may take around 12 months. It is therefore the ACMA’s intention to have the framework in place supporting the use of the new arrangements in the second quarter of 2011, and equipment manufacturers may work in parallel with standards development to have the new equipment available when they can.

From 1 January 2011, the additional simplex and telemetry/telecommand channels will become available, and after five years, the use of 25 kHz equipment will not be supported.

By 1 January 2016, repeaters will have completed transition to 12.5 kHz bandwidth and the additional interleaved repeater channels will become available for use.

acma | 35 6 Expiry of 500 MHz spectrum licences

Two segments in the upper 400 MHz band (500.99375–504.99375 MHz paired with 510.99375–514.99375 MHz) are currently spectrum licensed. These spectrum licences expire in 2012. As discussed in both the Options and Proposals papers, the ACMA has three options for expiring spectrum licences: 1/ re-allocate the spectrum under new spectrum licences by an auction, tender, or predetermined or negotiated price17 2/ renew the expiring licences under public interest grounds18 3/ re-allocate the spectrum under a different licensing system such as apparatus licences.19

6.1 Background In 1996, the Minister for Communications and the Arts designated two paired segments in the frequency ranges 500.99375–504.99375 MHz and 510.99375– 514.99375 MHz (the 500 MHz band) for allocation via the issue of spectrum licences in accordance with section 36-(1) of the Radiocommunications Act 1992 (the Act). The 500 MHz band was designated for spectrum licensing in the Radiocommunications (Spectrum Designation) Notice No. 1 of 1996 (the Designation Notice).20 This was the spectrum first to be allocated by spectrum licensing. Unlike later bands allocated for spectrum licensing, the demand at auction was not high.

Currently the spectrum-licensed segment of the 400 MHz band is sparsely utilised compared with adjacent segments, although a small number of licensees have deployed large and spectrally-efficient networks.

Spectrum licences are designed to be technologically flexible, and can be re- configured to a significant extent by the market to adapt to changing technical and market environments. Spectrum licences are also easily tradable, as they can be amalgamated, divided, or re-assigned, in part or in whole. The 500 MHz spectrum licences have been subject to a fair amount of trading, but the networks they support could be just as easily accommodated under the apparatus licensing arrangements established in adjacent segments.

As the spectrum is sparsely utilised compared to neighbouring spectrum, the unused capacity could be a valuable resource to facilitate the efficient migration of licences displaced from other parts of the band.

6.2 Original ACMA proposal The Proposals Paper detailed three alternative proposals for the future of the 500 MHz spectrum licences. These were:

17 Under section 60 of the Radiocommunications Act. 18 Under section 82 of the Radiocommunications Act. 19 Which requires the original spectrum designation notice under section 36 of the Radiocommunications Act to be revoked by the Minister. 20 The Designation Notice is available at www.comlaw.gov.au/ComLaw/Legislation/LegislativeInstrumentCompilation1.nsf/all/search/BF2FF86FB521 05F2CA256FBD0014C0E4

36 | acma 1/ continuing spectrum licensing in the 500 MHz band following an update of the technical framework applied to these licences and possible consolidation of the spectrum into larger lots 2/ expanding spectrum licensing in the 500 MHz band 3/ reverting to apparatus licensing in the 500 MHz band, and potentially using this spectrum to assist with overall migration issues in the 400 MHz band.

Comment was sought on specific issues under each of these options, including views on the technical framework, lot size and timing, should spectrum licensing be continued in the band; and views on the allocation of apparatus licences and the future of existing systems, should the band be reverted to apparatus licensing.

6.3 Stakeholder feedback The overall trend in submissions to questions regarding the expiry of the 500 MHz spectrum licences was that these licenses should not be renewed, and that they should be reverted to apparatus licensing. A number of respondents also stated that they did not support spectrum licensing in any land mobile spectrum.

All submissions that supported reversion to apparatus licensing supported the new apparatus licences being technically consistent with those in nearby frequency bands. Respondents were also generally supportive of over-the-counter allocation of any new apparatus licences outside the high density areas of Sydney and Melbourne.

The majority of respondents were supportive of the proposal to allow 500 MHz spectrum licensees to apply for apparatus licences prior to acceptance of other applications. A majority of respondents also supported the use of the band to assist in the transition to new arrangements by accepting applications for apparatus licences in this band from non-government licensees in the 403–430 MHz band, followed by applications from current licensees in 450–470 MHz, prior to the acceptance of other applications.

Opinion was split on the option to auction the remaining apparatus licences in Sydney and Melbourne. Those that did not support the proposal cited concerns about licences not being used, and the ineffectiveness of the secondary market resulting in (new) congestion.

In addition to the submissions to the proposals, the ACMA directly approached each of the affected spectrum licensees about the current and future use of their respective spectrum licences. Of those affected licensees that chose to speak with the ACMA, few sought the continuation of spectrum licensing in the 500 MHz band. Many of these spectrum licensees are not using this spectrum (i.e. the licences have no devices registered against them); and all licensees that did have significant numbers of registered devices expressed a preference for a move to apparatus licensing arrangements.

6.4 The ACMA’s response to feedback Spectrum licensing has contributed significantly to the efficient operation of several wireless businesses since its inception, with cellular telephony being the most obvious example. The ACMA remains committed to pursuing spectrum licensing in the future. However, the sparse usage of the 500 MHz licences, especially in comparison to neighbouring bands, suggests that spectrum licensing has not been as successful in this band. This is likely to have been due to the fact that, as the first band deployed under spectrum licensing, the design of the spectrum licensing arrangements including the technical frameworks, were not optimised for the services that were most likely to use this band. It is not clear how the ACMA could alter the spectrum licences at this

acma | 37 stage in order to stimulate usage, especially since stakeholder responses demonstrate that there would be little demand from users.

Reversion to apparatus licensing would mean that existing usage can be accommodated while opening up a significant amount of vacant spectrum to facilitate the transition of licences displaced from other parts of the band.

The availability of this lightly used spectrum is essential to the successful transition of other services in the greater 400 MHz band, for example, the new harmonised government bands. Vacant channels in the 500 MHz spectrum licensed bands appear to be the best choice to fulfil this need. Without these vacant channels timeframes for transition would be considerably extended and the benefits gained from restructuring the band would be delayed by a number of years.

Ideally, vacant spectrum is required to relocate services to implement new arrangements in the 400 MHz band, including the harmonised government band, in a timely manner. Reversion of the 500 MHz band to apparatus licensing would provide some vacant spectrum for this purpose and would enable a more effective transition, and hence utility, of the entire 400 MHz band.

6.5 Final decision In evaluating this issue the ACMA is guided by its Principles for Spectrum Management. They are: 1/ Allocate spectrum to the highest value use or uses. 2/ Enable and encourage spectrum to move to its highest value use or uses. 3/ Use the least cost and least restrictive approach to achieving policy objectives. 4/ To the extent possible, promote both certainty and flexibility. 5/ Balance the cost of interference and the benefits of greater spectrum utilisation.

The principles recognise that a band’s highest value use is not determined solely by an economic assessment, but also by consideration of the broader public good or social benefit achieved by that use.

In light of the relatively low use of this spectrum, the ACMA has also considered, and previously sought comment on, how the current technical framework might be altered in order to stimulate greater spectrum utilisation. It is not clear how the ACMA could alter the technical framework of these spectrum licences in order to stimulate such greater use, especially since stakeholder responses demonstrate that there would be little demand from users.

Given that there are significant migration issues to overcome in achieving the objectives of the 400 MHz review, much of the value of the 500 MHz spectrum is in facilitating overall migration in the broader 400 MHz band. The ACMA has concluded that there are significant public benefits to be gained from allowing faster transition to the new arrangements in the 400 MHz band, and that this transition will be facilitated in the short to medium term under an apparatus licensing regime. This would allow additional use of this spectrum to assist with migration, and ACMA can put into place acceptable arrangements for existing licensees in the band.

The ACMA will recommend to the Minister that the Designation Notice for the 500 MHz band be revoked in accordance with section 36-(3) of the Act and that the spectrum be returned to an apparatus licence regime. Contingent on the Minister agreeing to the ACMA’s recommendations: > apparatus licensed use of the currently spectrum licensed segments would be consistent with other land mobile use on the 400 MHz band

38 | acma > the ACMA will explore dedicating some of this spectrum for trunked systems only > upon expiry of the spectrum licences, existing spectrum licensees will be offered the opportunity to take out a 12.5 kHz bandwidth apparatus licence to replace each existing spectrum licence device registration.

6.6 Proposed transition arrangements Should the ACMA’s recommendation be accepted by the Minister, and the Designation Notice be revoked, the revocation will come into effect on the day after the expiry of the current spectrum licences, that is, 1 June 2012.

A process will be developed whereby existing spectrum licensees are given priority in the allocation of new apparatus licences. Existing spectrum licensees will be offered the opportunity to take out a 12.5 kHz bandwidth apparatus licence to replace each existing spectrum licence device registration. Licence fees will be consistent with the rest of the 400 MHz band.

Remaining spectrum will initially be made available only to users transitioning due to other changes in the 400 MHz band. This will be further discussed in Chapter 8 in the context of transition to new band arrangements.

acma | 39 7 Measures to address congestion

One of the overarching objectives of the review of the 400 MHz band is to improve the allocative, technical and dynamic efficiency with which spectrum in the band is made available. This objective is largely driven by congestion. The ACMA response to congestion in the 400 MHz band is to use a range of economic and technical tools to more readily allow spectrum to move to its highest value use. Technical tools set a framework to manage interference and provide for technically efficient operations; economic tools encourage licensees to use spectrum efficiently. Together these measures facilitate highest value use of the spectrum.

This chapter details the measures that the ACMA intends to use to address congestion. A key outcome is a reduction to a minimum channel bandwidth to 6.25 kHz, with a mandated maximum channel bandwidth of 12.5 kHz for land mobile services in high and medium density areas. The ACMA’s proposal for the implementation of opportunity cost pricing is also presented in this chapter. Apparatus licence taxes are the ACMA’s main economic tool for addressing congestion.

A number of changes to assignment and coordination rules in the band are also detailed in this chapter. Draft new Radiocommunications Assignment and Licensing Instructions (RALIs) are attached to this paper to facilitate comment on the precise nature of these changes.

Overall, the decisions and proposed changes to RALIs detailed in this chapter comprehensively address the objective of the review of the 400 MHz band to improve the allocative, technical and dynamic efficiency with which spectrum in the band is allocated and used.

7.1 Reduction in channel bandwidth As discussed in both the Options and the Proposals papers, the use of 25 kHz channels for narrowband land mobile and fixed service radiocommunications equipment is well established in the 400 MHz band. The Options Paper established that systems carrying analog voice were suitable candidates for bandwidth reduction, and that systems carrying digital data were unlikely to be able to accommodate bandwidth reduction. A high percentage of both land mobile and point-to-point systems are recorded as analog voice systems in the ACMA licence register.

Overall growth in the number of radio systems in congested areas can be assisted by the implementation of systems using narrower channels that still provide the desired capability. There appears to be scope for migration of all land mobile and some narrowband fixed (point-to-point) systems from 25 kHz to at least 12.5 kHz (per communications channel), by moving towards systems that utilise the equivalent of 12.5 kHz or lower per voice channel.

Equipment using 12.5 kHz channels is readily available, and offers comparable performance to 25 kHz equipment. Equipment using 6.25 kHz channels is also becoming more prevalent. Systems utilising 12.5 or 25 kHz channels but carrying two or four communications channels (that is, they are operationally equivalent to 6.25 kHz channels) are also available or becoming available.

As detailed in the Proposals Paper, the overall ACMA objective is to enable, encourage and in some cases mandate channel usage in the band that takes advantage of modern, spectrally efficient technology which may assist in relieving

40 | acma congestion. It is the intent of the ACMA that measures taken will recognise the differences in spectrum congestion between urban and rural/remote areas.

7.1.1 Land mobile service The ACMA established in the Options and Proposals papers that there is scope for a large number of land mobile assignments to reduce their channel bandwidth below the current maximum of 25 kHz.

7.1.1.1 Background In the Options Paper, the ACMA proposed the facilitation of a reduction in channel bandwidth to 12.5 kHz in the 400 MHz band. Stakeholders were largely supportive of this proposal, with significant support for channel bandwidths of 6.25 kHz for land mobile systems. Stakeholders also supported the ‘interleaved’ approach to migration, which would allow narrower bandwidth channels on existing operating frequencies.

7.1.1.2 Original ACMA proposal In the Proposals Paper, the ACMA proposed to: > implement a 6.25 kHz compatible channel raster for all land mobile segments (both single and two-frequency) in the 400 MHz band > permit aggregation of channels to 12.5 kHz unconditionally > permit aggregation of channels to greater than 12.5 kHz in some cases. However, justification would be required in high density areas (HDAs) and medium density areas (MDAs) with the spectral efficiency of the proposed use (e.g. 25 kHz analog systems would not be supported) and the availability of alternatives as a key consideration. > prohibit 25 kHz systems in HDAs and MDAs within five years unless justified as above.

7.1.1.3 Stakeholder feedback The majority of submissions supported the proposals for narrower channel bandwidths for the land mobile service. Some submissions stated that many data services and systems that provide multiple voice channels require 25 kHz to operate and should be supported under any new arrangements. The retention of 25 kHz arrangements outside of high density areas (HDAs) and medium density areas (MDAs) was also commonly supported, with lower spectrum congestion in these areas cited as a supporting factor.

The need for a high degree of transparency in the process of justifying the use of a 25 kHz channel was highlighted in a number of submissions, given that this will be integral in understanding the rationale behind applying for such licenses.

There were mixed views on the length of time needed for transition. Several submissions supported the proposed timeframe of five years for the prohibition of 25 kHz systems in HDAs and MDAs. Increasing the proposed five year transition period to six years was also suggested in a number of submissions. Volunteer organisations generally advised of the need for a longer transition period, citing budgetary constraints as their key issue, and proposed that timeframes in the order of 10 to 15 years would be more desirable.

7.1.1.4 The ACMA’s response to feedback The ACMA notes the broad support for the initiatives put forward in the Proposals Paper. The ACMA also reaffirms that systems providing multiple circuits through 25 kHz channels comply with the intended efficiency objectives.

The ACMA acknowledges that transparency in its decision making processes is important, and that additional information will be provided on the rationale for

acma | 41 determining when 25 kHz channels can be supported. Spectrum Embargo 51 provides some advice on the reasons why 25 kHz channels may not be granted. A more thorough rationale is provided in the draft 400 MHz Plan (RALI MS22) in Attachment 1. The ACMA also acknowledges that the issue of transition timeframes is sensitive and critical to a number of stakeholders.

7.1.1.5 Final decision The final ACMA decision on the reduction of channel bandwidth in the land mobile service is: > a 6.25 kHz compatible channel raster will be implemented in the land mobile service segments of the 400 MHz band > the use of 12.5 kHz and 25 kHz bandwidth channels will be supported outside of HDAs and MDAs > the use of channels greater than 12.5 kHz in HDAs and MDAs will not generally be supported. However, systems carrying two (or more) voice circuits through a 25 kHz channel will be permitted.

7.1.1.6 Proposed transition arrangements Proposed transition arrangements for the introduction of narrower bandwidth channels are detailed in the draft RALI MS22 (the 400 MHz Plan) at Attachment 1. Land mobile assignments using 25 kHz bandwidth for a single communications channel will be prohibited in high density areas and medium density areas.21 Systems that achieve spectrum efficiencies equal to or better than one communications channel per 12.5 kHz will be permitted.

Exceptions will be permitted in some other cases. In high and medium density areas, non-compliant assignments may be allowed for reasons of interoperability on a case- by-case basis. Short term use, pending migration to compliant systems, is considered reasonable justification for such assignments.

Existing 25 kHz land mobile assignments in high density areas and medium density areas assigned prior to the implementation of the existing embargo will be permitted to continue operation until 31 December 2012. However, holders of these assignments are encouraged to migrate to 12.5 kHz (or less) bandwidth per communications channel as soon as possible.

7.1.2 Fixed Service In the Options and Proposals papers, the ACMA established that there is also scope for transition of some fixed service systems to a 12.5 kHz channel bandwidth. Only around 11 per cent of fixed assignments in the 400 MHz band utilise channel bandwidths less than 25 kHz. However, a justification for greater channel bandwidths for fixed assignments is that this bandwidth is needed to support higher digital data rates.

7.1.2.1 Background In the Options Paper, the ACMA proposed a reduction in channel bandwidth to 12.5 kHz for analog FM fixed links in the 400 MHz band, with data links permitted to continue to use 25 kHz channels. Stakeholders with interests in data communications presented a case for maintaining 25 kHz channels, and even a need for 50–100 kHz channels to cater for existing and future data rates. Aggregation of channels was put forward as a way of achieving the desired channel bandwidth. Additionally, users of

21 These areas are defined in the Apparatus Licence Fee Schedule (www.acma.gov.au/WEB/STANDARD/pc=PC_1614). Those licensees closer than the reuse distance of their service to the boundary of a medium density area and a low or remote density area will be required to meet the high and medium density area deadlines.

42 | acma fixed (point-to-point) links for high throughput data applications argued for the continued need for larger bandwidths.

7.1.2.2 Original ACMA proposal In the Proposals Paper, the ACMA proposed: > to reduce the minimum channel size for all narrowband fixed segments (point-to- point and point-to-multipoint) in the 400 MHz band to 12.5 kHz, with aggregation of channels permitted where justified > to prohibit 25 kHz analog voice point-to-point systems in HDAs and MDAs within 5 years > no change for wideband systems.

7.1.2.3 Stakeholder feedback Proposals relating to the channel bandwidth of fixed service systems received broad support in response to the Proposals Paper, with some respondents suggesting that inefficient data systems should also be prohibited. One suggestion to help in the removal of these inefficient data systems was to introduce and mandate minimum data rates in MDAs and HDAs. Another suggestion was to mandate 12.5 kHz as the maximum channel bandwidth and to encourage the use of 6.25 kHz equipment. It was also highlighted that multi-carriage digital systems should also be allowed to operate if they have multiple voice or data channels operating over a 25 kHz channel, which also included support for multi-carriage analog systems. Similar to the land mobile channel bandwidth proposals, the retention of 25 kHz bandwidths for fixed services outside of HDAs and MDAs was supported, due to less spectrum congestion in those areas.

7.1.2.4 The ACMA’s response to feedback The ACMA believes that mandating a maximum channel bandwidth of 12.5 kHz for the fixed service should not occur. The purpose of most fixed service use is for the transfer of digital data, and the prevailing trend is for increased data throughput. Many modern data systems require a bandwidth of 25 kHz to carry high data rates (e.g. 19.2 kb). The ACMA therefore believes that 25 kHz channels for digital fixed service systems should remain available.

A survey of existing fixed point-to-point and point-to-multipoint systems showed that channels are generally used efficiently (i.e. a 25 kHz channel is generally used to support a high data rate system) and so there is no immediate need to mandate minimum data rates.

Systems carrying two (or more) communication circuits through a 25 kHz channel are considered to be using the spectrum efficiently and should therefore be permitted.

7.1.2.5 Final decision The final ACMA decisions on the reduction of channel bandwidth in the land mobile service are: > a 12.5 kHz channel raster will be implemented in segments of the 400 MHz band used exclusively for the fixed service > the use of 25 kHz bandwidth channels will be supported, except for analog voice. Systems carrying two (or more) circuits through a 25 kHz channel will be supported > aggregation of channels to a maximum of 50 kHz will also be considered in the future to accommodate emerging technologies as demand develops.

7.1.2.6 Proposed transition arrangements A 12.5 kHz channel raster for narrowband fixed services will be implemented when the new 400 MHz Plan is released. Systems not complying with the new arrangements (e.g. 25 kHz analog voice systems) will have until 31 December 2012 to transition to the new arrangements.

acma | 43 New assignments to the fixed service not meeting the arrangements of the new 400 MHz Plan, but required to extend existing services, may continue to be made in areas outside high and medium density areas. In high and medium density areas, non- compliant assignments may be allowed for reasons of interoperability on a case-by- case basis. Short term use pending migration to compliant systems is considered reasonable justification for such assignments.

Existing 25 kHz analog assignments to the fixed service in high density areas and medium density areas assigned prior to 6 June 2010 shall be permitted to continue operation until 31 December 2012. Holders of these assignments are encouraged to migrate to 12.5 kHz or less bandwidth per communications channel as soon as practicable.

7.2 Assignment and coordination rules The 400 MHz review provides an opportunity to review and improve assignment and coordination rules to better facilitate the use of the band. These changes will maximise the utility of the 400 MHz band by facilitating, and in some cases requiring, improved assignment and coordination processes.

7.2.1 Background Consideration of improvements to assignment and coordination rules in the 400 MHz band began in the Options Paper, where the ACMA sought general comment from stakeholders on ways that the rules could be changed to facilitate better use of the 400 MHz band. Responses to the Options Paper suggested a review of re-use distances and the use of topographical data in re-use calculations to improve the assignment and coordination rules.

In addition, the Options Paper outlined a proposal to restrict high power single frequency systems (SFSs). While a number of submissions were in support of these measures, users of these systems opposed this proposal, citing the need for large coverage areas.

The ACMA also identified a number of applications that are not well supported by existing arrangements such as wide-area data systems (e.g. differential global positioning systems).

7.2.2 Original ACMA proposal In the Proposals Paper, the ACMA proposed to undertake a process to implement changes to assignment and coordination procedures based on the following core concepts: > for land mobile services: > a review of re-use distances with a view to reduction > the option to use topographical information in the assignment process > for point-to-point: > the option to use topographical information in the assignment process > for point-to-multipoint: > the option to use topographical information in the assignment process > for single frequency systems: > restricting or quarantining high power single frequency systems > permitting high power single frequency in exceptional cases only > regional variations to allow the use of high power SFS in some areas

44 | acma > for area-wide high duty cycle data systems: > identification of dedicated channels for area-wide, high duty cycle data systems. 7.2.3 Stakeholder feedback The ACMA proposals to review assignment and coordination procedures received broad support. However, a number of submissions qualified their support with statements to the effect that any changes should not lead to an additional risk of interference. Reduction in re-use distances was of particular concern to a number of respondents, as some believed that this would increase interference into critical systems.

A number of submissions called for a common process or a minimum standard for the use of topographical information in the assignment process.

While proposals regarding single frequency systems received support, emergency services and users of high power single frequency systems (such as the rail industry) expressed concern about the proposal to restrict these systems. There were concerns that these systems service large coverage areas, and that there are no alternative arrangements available for these services.

There was broad support for the proposal to identify dedicated channels for area-wide, high duty cycle devices.

7.2.4 ACMA response to feedback The ACMA acknowledges that the land mobile system model used in the assignment and coordination process can at times underestimate interference into other systems (an optimistic model i.e. re-use distances should be larger) and at other times overestimate the potential interference (a pessimistic model, i.e. reuse distances should be shorter). Such variation in outcomes is inherent in any model, as it is simply an attempt to use standard rules to describe inherently variable scenarios.

In an attempt to address the ‘pessimistic’ scenarios, an examination of the existing frequency re-use criteria shows little scope for reduction without increasing the potential for interference, except in cases where terrain shielding may permit it. To assist with reducing frequency re-use distances, where possible, a model that can account for terrain has been included in the draft revisions of RALI LM8 and RALI FX16. Additionally, assignment instructions for the fixed point-to-point service in the 400 MHz band will be modified to include the use of terrain modelling to assist in coordination.

In response to the ‘optimistic’ scenario, where the current model in some cases may underestimate interference between systems, the ACMA considers the implementation of a ‘height versus power’ relationship for land mobile base stations would better maintain the integrity of the service area model. In this approach, used in some other administrations, permitted base station power would need to be reduced in proportion to the height of the actual base station above the height of notional base station using in the planning model (200 metres). The height versus power relationship would be such that the coverage radius would largely remain static at the 40 kilometres used in the model. Users wanting to cover large service areas using both high power and high antenna heights would need to acquire licence(s) covering adjacent service areas to achieve the equivalent outcome.

The ACMA acknowledges the concerns of some operators regarding the proposed restrictions on high power single frequency systems. This must be balanced with the spectrum denial that these systems cause and the availability of alternatives such as two-frequency systems. Regional variations seem feasible, however the key issue is

acma | 45 spectrum denial at and near a site, so, provided communal sites can be avoided, there is scope for high power single frequency systems in some circumstances.

Spectrum for high duty cycle, area-wide channels is not currently adequately catered for, and the ACMA acknowledges the need for more appropriate arrangements for these systems. The ACMA considers the best way to address this is to identify a limited number of dedicated channels for these systems that can be assigned on a non-exclusive basis. Users would be permitted to use only one of these channels at a time, but could change to any other frequency within the set as required to avoid interference from other similar users.

7.2.5 Final decision The ACMA decisions on assignment and coordination rules are implemented in the relevant RALIs, and are summarised below. Drafts of these RALIs are attached for comment.

7.2.5.1 400 MHz Plan (RALI MS22) The draft revision of RALI MS22 (the 400 MHz Plan) is appended to this paper at Attachment 1. Changes include: > the identification of four 12.5 kHz and two 25 kHz channels dedicated for use by high duty cycle, area-wide systems in single frequency segment segments above 450 MHz > high power SFS restrictions from all sites in all HDA and MDA areas. High power SFS systems on non-communal sites (defined as a site with a single licensee) permitted outside HDAs/MDAs.

7.2.5.2 Land Mobile Service (RALI LM8) A draft revision of RALI LM8 is appended to this paper at Attachment 2 for comment. Changes include: > updated frequency-distance tables for 400 MHz including for 6.25 kHz channels > height-power constraints > the option to include terrain to justify reduced re-use distances > changes to intermodulation checks > clarification of arrangements for ambulatory systems > basic checks and additional power constraints for supplementary transmitters.

7.2.5.3 Fixed point-to-multipoint service (RALI FX16) A draft revision of RALI FX16 is appended to this paper at Attachment 3 for comment. Changes include: > the option to use terrain to justify reduced re-use distances > relaxed antenna restrictions for remote and base stations to better reflect current usage, while maintaining interference potential > a preferred scheme for combining channels > clarification of the appropriate assigning instructions for assigning point-to- multipoint services in land mobile spectrum > corrections to editorial omissions in the channel tables.

7.2.5.4 Fixed point-to-point service (RALI FX17) A draft revision of RALI FX17 is appended to this paper at Attachment 4 for comment. Changes include: > the option to use terrain in assignment and coordination.

46 | acma 7.2.6 Proposed transition arrangements Draft RALIs MS22, LM8, FX16 and FX17 are attached for comment. Once stakeholder comments are reviewed, the RALIs will be endorsed by the ACMA and released.

1/ The ACMA invites comment on the implementation of the new arrangements detailed in the paper, in the draft 400 MHz Plan and other RALIs in Attachments 1, 2, 3 and 4.

7.3 Pricing Apparatus licence taxes are used by the ACMA to encourage the efficient use of spectrum where a price-based allocation system such as an auction is not used. Setting apparatus licence taxes at an appropriate level fulfils the first two of the ACMA’s Principles for Spectrum Management, discussed in section 1.5.2.

7.3.1 Background In January 2010, the ACMA agreed to consider opportunity cost pricing (OC pricing) as one of a suite of tools to manage spectrum more efficiently, including in the 400 MHz band. The opportunity cost is the value of the opportunity forgone by current spectrum use.

OC pricing may result in some licence fees increasing and some decreasing. Where there is substantially more spectrum than is required to meet current and expected levels of demand, the opportunity cost of that spectrum would decrease. On the other hand, where there is evidence of excess demand, or a higher-value alternative use, licence fees would increase.

The existence of congestion in the 400 MHz band in high population areas is sufficient evidence that the current price is less than opportunity cost in these areas. The ACMA released a separate discussion paper in parallel to the Proposals Paper (the OC pricing discussion paper), which examined administrative incentive-based pricing, using opportunity cost as a preferred method for administratively allocated spectrum.22 The 400 MHz band was used as a case study in an external pricing study (the Plum Report), commissioned by the ACMA.23 An analysis of the opportunity cost of spectrum in the 400 MHz band was conducted for Sydney (representative high density area) and Perth (representative medium density area).

7.3.2 Original ACMA proposal In the OC pricing discussion paper, the ACMA proposed that the apparatus licence taxes in medium and low density areas of the 400 MHz band should be maintained at their current levels, but that the taxes should increase in high density areas (Sydney, Melbourne and Brisbane/Gold Coast) in equal annual increments over five years to a target price. The ACMA also suggested that price increases could be suspended at a particular increment if that price led to a balance in supply and demand. Based on the findings of the Plum report, the ACMA considers that the target price in high density areas should be approximately three times the current price.

7.3.3 Stakeholder feedback Stakeholders provided feedback to the ACMA on OC pricing in response to the ACMA’s OC pricing discussion paper. This stakeholder feedback is summarised in

22 www.acma.gov.au/webwr/_assets/main/lib310867/ifc12- 09_final_opportunity_cost_pricing_of_spectrum.pdf 23 www.acma.gov.au/webwr/_assets/main/lib310867/ifc12-09_app_a_1_plum_report_to_acma.pdf

acma | 47 The ACMA response to public submissions: Opportunity Cost Pricing of Spectrum24 , released in January 2010. Broadly speaking, stakeholders supported the introduction of OC pricing, but also noted some important caveats on its implementation. Issues raised by stakeholders will assist the ACMA in the transition to fees based on opportunity cost.

Stakeholders have also provided separate feedback on the pricing of 400 MHz fixed links in remote areas. From 2005, the ACMA instituted five annual increases in fees for fixed links below 960 MHz. The aim was to bring these fees in line with land mobile fees in the same frequencies. Stakeholder feedback suggests that fees in remote areas are now too high—given that there is no congestion, they argue there is no spectrum denial. In response, the ACMA froze licence fees for fixed links below 960 MHz in remote areas. The ACMA plans to review these fees as part of the general process of OC price implementation. If closer scrutiny confirms that there are no higher value alternative uses for the relevant spectrum in remote areas, the opportunity cost would be adjusted accordingly.

7.3.4 Interaction between technical and economic reforms The pricing and technical reforms proposed in this paper are designed to work together to achieve the ACMA’s spectrum management objectives, as set out in the Radiocommunications Act 1992 and the Principles for Spectrum Management.25 The reforms are being published as a single comprehensive package to enable stakeholders to determine the impact on their individual circumstances. A major aim of both pricing and technical reforms is to make 400 MHz spectrum available in previously congested areas. Those congested areas are in high density areas— Melbourne, Sydney and Brisbane/Gold Coast.

The ACMA is considering licence tax incentives to encourage the early implementation of some changes to assist and accelerate overall transitions. However, the ACMA will be providing an information and assistance program to help licensees understand the impact of the changes on their individual circumstances, and assist in determining the most cost effective approach for each licensee to accommodate the necessary changes.

The ACMA has previously indicated that licence fees in some remote areas may have been set too high.26 Generally speaking, the 400 MHz band in remote areas is not congested, if used at all, and current users (if any) are not denying use of the resource to other potential users. In this situation, the ACMA considers that licence fees in remote areas should be set at a level that reflects this situation.

In medium and low density areas, the picture is less clear. The ACMA has received little feedback about the balance of supply and demand in these areas. In the absence of such feedback, the ACMA considers that supply and demand are likely to be balanced. The ACMA will therefore not seek to change fees in these areas (beyond CPI increases) until further notice.

7.3.5 ACMA proposal The ACMA’s proposal is that OC pricing would be implemented in high density areas in the 400 MHz band. Implementation in remote density areas will also be undertaken as a part of this review process within the same timeframe.

24 www.acma.gov.au/webwr/_assets/main/lib310867/ifc12-09_acma_response_to_submissions.doc 25 The ACMA, Principles for Spectrum Management, 31 March 2009, available at www.acma.gov.au/WEB/STANDARD/pc=PC_311683 26 Explanatory Statement, Radiocommunications.(Transmitter Licence Tax) Amendment Determination 2009 (No 1), available at www.comlaw.gov.au

48 | acma If adopted, these proposals would see the tax for apparatus licences in the 400 MHz band being raised in high density areas in equal, annual increments over five years, until the opportunity cost price is reached. If the ACMA considers that supply starts to exceed demand in high density areas, the tax increases would be halted.

In remote density areas, the apparatus licence tax would be assessed to consider decreases to reflect the opportunity cost. The tax may increase in the future if the ACMA considers that demand starts to exceed supply. 7.3.5.1 Proposed changes to the apparatus licence fee schedule The price changes in high and remote density areas would be reflected in the Apparatus Licence Fee Schedule.

The Apparatus Licence Fee Schedule conveniently sets out the prices for various types of apparatus licences, and is typically updated annually in April. The taxes and charges are divided into seven divisions: > Division 1—General assigned licences > Division 2—Fixed point-to-point licences > Division 3—Fixed point-to-multipoint licences > Division 4—Assigned licences in high demand frequency bands > Division 5—Television outside broadcast licences > Division 6—Assigned licences subject to fixed tax > Division 7—Non assigned licence fees > Division 8—Narrowcasting service (HPON) licence > Division 9—Other charges

Licence taxes in Division 3 (Fixed point-to-multipoint licences) and Division 4 (Assigned licences in high demand frequency bands) would be increased from $94.1791 per kHz to $269 per kHz in high density areas. Taxes in Division 1 (General assigned licences) and Division 2 (Fixed point-to-point licences) would be increased threefold in high density areas. The difference in price for these licences is intended to reflect differing degrees of spectrum denial. The ACMA will undertake a review of spectrum denial for each service type prior to the price increase to ensure that the OC price is correctly reflected.

Table 2 below sets out the proposed target prices for the 400 MHz band.

Table 2 Proposed taxes (approximate) for apparatus licences in the 403–520 MHz band in High Density Areas27 Division 1 2 3 4 Current $ per kHz (2009) 1.2738 23.5448 94.1791 94.1791 Approximate $ per kHz (2010) 1.2738 23.5448 94.1791 94.1791 Approximate $ per kHz (2011) 1.7833 32.9627 129.1433 129.1433 Approximate $ per kHz (2012) 2.2928 42.3806 164.1075 164.1075 Approximate $ per kHz (2013) 2.8023 51.7986 199.0716 199.0716 Approximate $ per kHz (2014) 3.3119 61.2165 234.0358 234.0358 Approximate $ per kHz (2015) 3.8214 70.6344 269.00 269.00

27 The prices are subject to an additional CPI increase each year. The CPI increase is included in the ‘Normalisation factor’ in the assigned licence tax formula, which is updated each year.

acma | 49 The best estimate of opportunity cost price for licences in high density areas in the 400 MHz band currently available to the ACMA is $269 per kHz28 based on a fixed point-to-multipoint system (Division 3).

Although the ACMA has, in a previous consultation paper, considered raising the price to a mid-point of $180 per kHz,29 it has decided not to pursue this approach in the interests of achieving the beneficial effects of opportunity cost pricing more efficiently in the 400 MHz band.

The problem with increasing to a mid-point is that the effect of opportunity cost pricing is unlikely to be achieved when the mid-point is reached, and therefore a second series of price increases would need to be implemented to ease congestion.

The ACMA considers that it would be more efficient to set the target to $269 per kHz in high density areas and increase the price to the target in a series of staged increments.

The ACMA considers that this approach is more likely to ease congestion, and lead to highest value use of the spectrum, more quickly and efficiently.

7.3.5.2 Roll-out period and procurement cycles The ACMA is aware that stakeholders require sufficient time to absorb price increases, and build additional costs into their budgets. Consequently, price increases will be implemented incrementally over five years, and will not commence until April 2011 at the earliest.

The ACMA will increase fees incrementally over a five year period, giving stakeholders an opportunity to adjust their budget planning to account for the new fees. The incremental price increases are set out in Table 2. The increases will only apply to licences in Divisions 1, 2, 3 and 4 of the Apparatus Licence Fee Schedule, and will not apply to non-assigned licences is Division 7.

No changes to the exemptions from apparatus licence fees are proposed.

2/ The ACMA invites comment on the proposals regarding the implementation of opportunity cost pricing in high density areas within the 400 MHz band.

28 Plum Consulting, Administrative Incentive Pricing of Radiofrequency Spectrum, October 2008 29 The ACMA, Opportunity Cost Pricing of Spectrum—Public consultation on administrative pricing for spectrum based on opportunity cost, April 2009, page 27.

50 | acma 8 Proposed transition to new arrangements

The ACMA is aiming to have new arrangements in the 400 MHz band in place by 31 December 2015 (i.e. roughly five and a half years time) in high and medium density areas, and by 31 December 2018 (i.e. roughly eight and a half years time) in other areas. The new arrangements and individual transition arrangements are detailed in Chapters 3 through 7.

Throughout the 400 MHz review, the issue of transition arrangements has been contentious, particularly the timeframes involved. The Proposals Paper stated that a total transition period of up to five years may be appropriate in high and medium density areas, with eight years in the rest of the country, for most of the proposed changes.

The proposed transition arrangements adhere to these timeframes for overall transition. However, some of the steps along the way to completing transition will occur in shorter timeframes. The ACMA acknowledges that the detail of the proposed transition timetable may be an area of concern to many licensees, and hence the arrangements below are proposals, not decisions, and are open to comment.

8.1 Proposed transition plan for the 400 MHz band The scope and complexity of the changes to the 400 MHz band are high, with individual changes often being highly interdependent. Therefore, there is a need to evaluate the transition to new arrangements across the band as a whole. By breaking down transition of the band into a number of phases, the implementation of new arrangements is simplified, ensuring the clarity to affected users and completion of transition by the deadline.

The ACMA proposes that the transition be conducted over three phases: > phase 1: Creation of vacant channels > phase 2: Implementation of 10 MHz duplex frequency split in 450–470 MHz > phase 3: Implementation of the harmonised government spectrum.

While a number of these phases will overlap in time, the ACMA believes that a phased approach is necessary to achieve the overall transition process. This will ensure the public benefit derived from the use of this band is maximised, in line with the second Principle of Spectrum Management. Additionally, the ACMA believes that the deadlines imposed are a fair compromise between impact on existing users and moving to more efficient arrangements in a timely manner.

To further decrease the impact of transition on users, longer timeframes for overall transition are proposed outside of high and medium density areas, where spectrum is less congested. Those land mobile licensees closer than the reuse distance of their service to the boundary of a medium density area and a low or remote density area will be required to meet the high and medium density area deadlines. For example, a high power, two-frequency land mobile user within 100 kilometres of a high or medium density area will be required to meet the high and medium density area deadline. Similarly, high and medium density area deadlines will be required to be met by fixed point-to-point users with one end of their link in a high or medium density area, even if the other end is outside of these areas.

acma | 51 The changes required for users in the transition period are also detailed in Attachment 7. The attachment contains tables which describe the changes required to transition to new arrangements by individual band segments, types of users and geographical areas. This will allow individual users to more easily determine the changes they will be required to make and the deadlines for these changes.

Phase 1: Creation of vacant channels The 400 MHz band is highly congested in HDAs such as Sydney and Melbourne. There is also moderate congestion in MDAs. Therefore, in order for new arrangements, such as the harmonised government band discussed in Chapter 3 and the change in duplex frequency split in the 450–470 MHz band discussed in Chapter 4 to occur in HDAs and MDAs, spectrum space (in the form of vacant channels) will first need to be created for licensees to relocate to as required.

As licensees currently operating on 25 kHz channel bandwidths transition to 12.5 kHz, vacant channels will be created. In addition, if the spectrum Designation Notice for the 500 MHz band is revoked by the Minister, the vacant channels in that spectrum will become available after 31 May 2012.

As discussed in Chapter 7, newly-available channels will need to be vacated before other arrangements can be implemented. It is therefore preferable that a number of the measures to address congestion discussed in Chapter 7 are implemented early in the transition period. To achieve this, the ACMA is proposing that licensees in HDAs and MDAs implement these measures by 31 December 2012. It is also proposed that licensees outside of HDAs and MDAs implement relevant measures by 31 December 2013. These deadlines will be limited to users not affected by the implementation of the harmonised government band, and the 10 MHz duplex frequency split in 450– 470 MHz. The measures to be implemented by this deadline will therefore include:

> Transition of land mobile users in HDAs and MDAs, both two-frequency and single frequency, in 469.9875–520 MHz and segments E/M currently operating on 25 kHz channel bandwidth to 12.5 kHz channel bandwidth or equivalent as discussed in section 7.1.1. To be exempt from this deadline, licensees will be required to confirm with the ACMA that they will be moving into the harmonised government band. Authorisation from the relevant state/territory government NCCGR authority stating that the user will be accommodated in the government band will be required. > All users operating analog 25 kHz links to cease operation or switch to a more efficient system, as discussed in section 7.1.2. > All high power single frequency users in segments G, H, P, and in 469.9875– 520 MHz to cease operation, or transition to a low power service as discussed in section 7.2. To be exempt from this deadline, licensees will be required to confirm with the ACMA that they will be moving into harmonised government spectrum. Authorisation from the relevant state/territory government NCCGR authority stating that the user will be accommodated in the government band will be required. > Transition of all land mobile users to the height verses power restrictions discussed in section 7.2.

Licensees will have an inherent financial incentive to transition to reduced channel bandwidths, due to the proposed increases in licence taxes discussed in section 7.3.

The ACMA believes that the implementation of these measures to address congestion in HDAs and MDAs early on in the transition period will free up the spectrum required to allow other major changes under the review of the 400 MHz band to occur.

52 | acma Channels created in segments AA, CC, Z/DD, BB/FF and GG/II will be reserved for users relocating from elsewhere in the band, due to the implementation of harmonised government spectrum and the 10 MHz duplex frequency split in 450–470 MHz. Additionally, should the 500 MHz spectrum Designation Notices be revoked and the spectrum returned to an apparatus licensing regime, this spectrum will initially be reserved for transitioning users. It is proposed that the preferential assignment of relocated users in these segments once it occurs is retained until the completion of the transition period.

Phase 2: Implementation of 10 MHz duplex frequency split in 450–470 MHz The transition to a 10 MHz duplex frequency split in 450–470 MHz has been broken down into a number of steps. These steps, as detailed in section 4.6, are: 1/ Clearance of users from 452.5–453 MHz and 462–462.5 MHz into temporary licences in 440–450 MHz or into space created in 469.9875–520 MHz. Users will be required to implement the required measures to address congestion applicable to them simultaneously with their relocation. For example, a 25 kHz channel bandwidth user in a high or medium density area would be required to transition to 12.5 kHz channelling when transitioning to a new frequency. 2/ Clearance of users from segment Y into channels into 462–462.5 MHz or into vacant spectrum created in 469.9875–520 MHz. Users will be required to implement the required measures to address congestion applicable to them simultaneously with their relocation. For example, a high power single frequency land mobile user in a high or medium density area will be required to transition to a low power service when transitioning to a new frequency. 3/ Following step 1, transition of users to a 10 MHz frequency split via a move of the base receive segment down by 0.5 MHz. Alternatively, users can relocate to spectrum reserved for them in 469.9875–520 MHz. Simultaneously, government users in 453–457.5 MHz and 462.5–467 MHz will relocate to harmonised government spectrum and non-government users in 457.5–459.9875 MHz and 467–469.4875 MHz will relocate elsewhere in the 450–470 MHz band, or to another part of the 400 MHz band. This step is detailed in section 4.6.

To enable the transition of users to a 10 MHz split to occur in a timely manner, it is preferable that steps 1 and 2 described above occur early in the transition period. To that end, the ACMA is proposing that clearance of users from segment Y, 452.5– 453 MHz and 462–462.5 MHz should be completed by 31 December 2012 in high and medium density areas and 31 December 2013 outside of high and medium density areas. The ACMA believes this deadline is reasonable, given the almost immediate availability of 440–450 MHz as temporary spectrum for displaced users. Additionally, a significant number of displaced users should be able to relocate permanently to vacant channels elsewhere in the band that were created in phase 1 of the transition.

The ACMA will encourage licensees to transition early by ensuring that apparatus licence tax holders in segment Y, 452.5–453 MHz and 462–462.5 MHz who relocate by 31 December 2011 will be subject to reduced taxes. Licensees that relocate before the 31 December 2011 deadline will receive a 50 per cent discount on the normal licence tax until 31 December 2015. Note that in this case, as in all proposed licence tax incentives, any OC price increases to the normal licence tax would apply.

Step 3 (described above) will need to be completed slightly prior to the end of the transition period. This will provide time for users in 403–420 MHz, that are required to relocate due to the implementation of the harmonised government band, to relocate within the tuning range of their equipment. Additionally, it will provide time for the final

acma | 53 relocation of government users to the harmonised government band, prior to the end of the transition period. To that end, the deadline for step 3 described above will be 31 December 2014 in high and medium density areas and 31 December 2015 outside of high and medium density areas.

To encourage an early adoption of the 10 MHz duplex frequency split arrangement, the ACMA is investigating the prospect of an apparatus licence tax reduction to those licensees in 453–459.9875 MHz and 463–469.4875 MHz who relocate by 31 December 2013. Licensees that relocate before the 31 December 2013 deadline would receive a 50 per cent discount on the normal licence tax until 31 December 2015. Note that in this case, as in all proposed licence tax incentives, any OC price increases to the normal licence tax would apply.

To further assist with transition, and enable increased continuity of service, the ACMA will allow a licensee relocating as part of phase 2 to hold two assignments (where possible) for a period of up to six months. During this period, licensees will be charged the equivalent of one licence. This opportunity will only be available once for each licence.

Timeframes for transition to a 10 MHz duplex frequency split in 450–470 MHz are illustrated in Figure 7. The large red arrows indicate the transition period for each step, while the smaller green arrows show the period in which transitioning licensees would be eligible to receive the licence tax discount.

Figure 7 450–470 MHz transition plan for high and medium density areas

To facilitate transition to the new arrangements in this part of the 400 MHz band, Australia-wide embargoes have been placed on all new assignments in 452.5–457.5 MHz and 462–467.5 MHz other than existing users transitioning from 403–420 MHz, and on new assignments in 457.5–459.9875 MHz and 467.5–469.9875 MHz that have not been authorised by the relevant state or territory government as part of the

54 | acma implementation of harmonised government spectrum. It is the ACMA’s intention to maintain the embargo in 452.5–457.5 MHz and 462–467.5 MHz until the end of the transition period, to ensure users in 403–420 MHz are given an opportunity to transition within their equipment tuning range. However, the availability of channels in this band will be monitored throughout transition, and the embargo lifted on all or part of this spectrum earlier if possible.

Phase 3: Implementation of the harmonised government band The implementation of the harmonised government band will require: > the relocation of non-government users which are currently in segments identified for harmonised government use, to elsewhere in the band > the relocation of government users into the segments identified for harmonised government use. The relocation of users to facilitate the implementation of the government band will occur throughout the transition phase of the review. However, in order to relocate within the tuning range of existing equipment, a number of the non-government users in 403–420 MHz users may require spectrum in 450–470 MHz for transition. However it is possible that not all of these users will be able to be accommodated within 450– 470 MHz. Accordingly, the earlier these users relocate the better chance they will have of obtaining a vacant channel during the transition.

Similarly, government users that are currently operating above 470 MHz will require spectrum in 450–470 MHz, to enable transition within the tuning range of existing equipment. Therefore, time will be required following the completion of phase 2 of transition to enable the implementation of the harmonised government band.

To provide time between the finalisation of arrangements supporting a 10 MHz duplex frequency split in 450–470 MHz and the implementation of the harmonised government band, users will have until 31 December 2015 to comply with the harmonised government band arrangements in high and medium density areas. In other words, non-government users will be required to relocate out of harmonised government segments by 31 December 2015 in high and medium density areas, and government users will be required to move into the harmonised government segments by 31 December 2015 in high and medium density areas.

Similar to other phases of transition, an extended deadline will be provided for transition outside of high and medium density areas. Users will be allowed until 31 December 2018 to comply with the harmonised government band arrangements outside of high and medium density areas. In other words, non-government users will be required to relocate out of harmonised government segments by 31 December 2018 outside of high and medium density areas, and government users will be required to move into the harmonised government segments by 31 December 2018 outside of high and medium density areas.

To encourage the early implementation of the harmonised government band, the ACMA is investigating the prospect of offering an apparatus licence tax reduction for those users that transition by 31 December 2014. Licensees that relocate before the 31 December 2014 deadline would receive a 50 per cent discount on the usual licence tax component of their normal licence fees (including any OC price increases) until 31 December 2015. Users that will be eligible for reduced apparatus licence taxes would be:

> non-government users currently operating in segments identified for the harmonised government band that relocate to elsewhere in the band, simultaneously implementing any relevant measures to address the congestion detailed in Chapter 7

acma | 55 > government users currently not operating in segments identified for the harmonised government band that relocate to the government band, simultaneously implementing any relevant measures to address the congestion detailed in Chapter 7.

To further assist with transition, and enable increased continuity of service, the ACMA will allow a licensee relocating as part of phase 3 to hold two assignments (where possible) for a period of up to six months. During this period, licensees will be charged the equivalent of one licence. This opportunity will only be available once for each licence.

Timeframes in high and medium density areas for all three phases of the transition are illustrated in Figure 8. The large red arrows indicate the transition period for each step, while the smaller green arrows show the period in which transitioning licensees would be eligible to receive the licence tax reduction.

Figure 8 Timeline for transition in high density areas (HDAs) and medium density areas

Transition timeframes for users outside high and medium density areas are illustrated in Figure 9. The large red arrows indicate the transition period for each step, while the smaller green arrows show the period in which transitioning licensees would be eligible to receive the licence tax reduction.

56 | acma Figure 9 Timeline for transition outside of HDAs and MDAs

The ACMA is seeking comment on the transition plan detailed above. The transition plan on a segment-by-segment basis is detailed in Attachment 7. The ACMA will use the feedback received to finalise the transition plan prior to the end of 2010.

3/ The ACMA invites comment on the proposed transition plan including:

> the proposal to break transition into three phases and the sequencing of these phases

> the proposed deadlines for each phase of transition > the proposal for reduced apparatus licence tax for users who implement aspects of the transition early

8.2 Proposed incentives and assistance program to support transition The ACMA acknowledges that the changes to the 400 MHz band will cause a large amount of disruption to users in the band in the short to medium term. To assist with transition, and mitigate some of the effects, the ACMA has designed an incentives and assistance program to assist users during the transition.

8.2.1 Assistance measures The changes to the 400 MHz band will affect a wide range of users. Smaller users of the band might not have had the opportunity to either read the ACMA discussion papers or attend one of the ACMA (or external) conferences at which the review has

acma | 57 been discussed. To ensure all users are aware of the changes to the 400 MHz band, a letter will be sent to each licensee in the 400 MHz band, broadly outlining changes to arrangements, and referring them to this paper for further information.

Additionally, the ACMA will be running a 400 MHz ‘Road Show’. The Road Show will comprise a series of regulatory tune-ups in a number of cities throughout Australia. Licensees will be invited to attend the seminar at the location closest to them. The ACMA is planning to run the Road Show early in the third quarter of 2010. The Road Show will visit the major capitals of each state.

During the seminar, there will be some discussion on new arrangements and the motivations behind these arrangements. However, the presentations will be focused on transition strategies detailed in the paper and consolidated in section 8.1. The 400 MHz Road Show will provide an opportunity for all stakeholders to speak with ACMA representatives and provide feedback on the proposed transition plan.

8.2.2 Incentives to support transition As detailed in section 8.1, the ACMA is investigating the prospect of offering licence tax reductions to users who transition to new arrangements early. Additionally, segments of the 400 MHz band will be set aside solely for users that have been required to relocate as part of the transition. Vacated channels in segments AA, CC, Z/DD, BB/FF and GG/II will be reserved for users relocating from other segments in the band to make way for the government band and support the 10 MHz duplex frequency split in 450–470 MHz.

Also, should the 500 MHz Designation Notice for spectrum licences be revoked and the associated spectrum returned to an apparatus licensing regime, this spectrum will initially be reserved for transitioning users. Additionally, no new assignments will be allowed in 452.5–457.5 MHz and 462–467.5 MHz other than existing users transitioning from 403–420 MHz, and no new assignments will be allowed in 457.5– 459.9875 MHz and 467.5–469.9875 MHz unless authorised by the relevant state/territory government as part of the requirements of the harmonised government band.

The ACMA seeks comment on the proposed incentives and assistance program. Specifically, the ACMA seeks the views of stakeholders on other measures that the ACMA should consider to assist stakeholders in the transition phase of the 400 MHz review.

4/ The ACMA invites comment on the proposed incentives and assistance program including:

> the proposal to run the 400 MHz Road Show > the proposal to write to each licensee in the 400 MHz band > the proposal for licence tax reductions for users who implement aspects of transition early

> the proposal to restrict access to certain parts of the 400 MHz band to users relocating to implement the transition

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