ACMA details Digital Dividend auction plan for 2012

Telstra, Optus and Vodafone are expected to be the three main bidders in the auction, scheduled for 2012

The ACMA's Digital Dividend auction plan

The ACMA's Digital Dividend auction plan

The Australian Communications and Media Authority (ACMA) detailed its plan for the lead up to its ‘Digital Dividend’ auction of Australia’s 700MHz spectrum at the end of 2012.

The spectrum, which lies in the 694 to 820 frequency range, has become available as a result of the switch from analog to digital television under the Federal Government’s Digital Switchover program.

ACMA manager of the Major Spectrum Allocations Section, Jane Cole, said workshops would kick off on 13 January to enable interested parties to learn about the Combinatorial Clock Auction (CCA) format which was selected following a tender process in March last year.

“It’s fair to say people’s reaction to the Combinatorial Clock Auction format has been along the lines of ‘OK we’re using a combinatorial clock, how do we find out about it?’” Cole said.

“So, we’ve been responsive and focused on telling them that yes we’re using this format, it’s new in Australia, and we’re going to be making sure that by the time you get to the auction you’ll be very comfortable with it which is what these workshops are about.”

The draft rules for the auction are scheduled for release at the end of February, early March. A formal consultation will follow prior to the release of the final rules in July.

“Generally, the application and registration process will take around three months so people will be able to apply to participate approximately three months before the auction itself.”

The ACMA will then assess applications closely before setting the reserve pricing for the spectrum.

In determining the reserve pricing figures, ACMA’s principal economist, Rebecca Burdon, said international auction results would be taken into account as it could provide an indication of what prospective bidders in Australia may be willing to pay.

“We’ll also be having regard to which parties might in fact emerge as bidders for the spectrum and we’re hoping to obtain useful insights into that in the course of our engagement with stakeholders in the coming months,” Burdon said.

There is a possibility that competition issues will come into play, Cole said, in which case competition limits or spectrum caps will be implemented to limit bidders to purchasing a certain amount of spectrum.

“A spectrum cap could be specific to this auction whereby it could determine any individual bidder is only allowed to purchase a certain amount. Or, it could take into account their prior holdings, like how much spectrum they already have in a particular band and could set a cap that’s relative to that prior holding.”

The ACMA will not set the caps but will implement the limits under the direction of the communications minister, Senator Stephen Conroy.

Telco analyst, Paul Budde, told Computerworld Australia the main contenders to take part in the auction are likely be Telstra, Optus and Vodafone.

“They are the only three that have the infrastructure… In order to make money, you have to operate a national network.

“For the time being, there are the three that have the infrastructure but want more capacity in order to handle all the traffic,” Budde said.

When contacted by Computerworld Australia, a spokesperson for Telstra, indicated the telco is likely to participate in the auction.

“We expect to participate, but can’t make any further comment beyond that until the auction rules are finalised,” the spokesperson said.

Optus and Vodafone are yet to comment.

Follow Chloe Herrick on Twitter: @chloe_CW

Follow Computerworld Australia on Twitter: @ComputerworldAU

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