KEY POINTS:
The planned auction of radio spectrum suitable for delivering wireless broadband services has been put on hold as the Government ponders its options.
Last month, the Government called for submissions on the carve-up of the 2.3GHz spectrum which is suitable for wireless broadband, including WiMAX technology.
Minister of Communications David Cunliffe said the auction, proposed for late May, had been deferred.
"The issues are complex, and we are carefully considering submissions received from stakeholders," he said.
He expects to give an update by the end of the month.
"The importance of this spectrum is it is the key spectrum for the roll-out of the new broadband wireless services," said Cunliffe.
He said wireless broadband has the potential to provide high-bandwidth broadband to a wide area at relatively low cost - bypassing the traditional wire network.
"It will never replace copper wire or fibre but it's an important complement, particularly in provincial towns and rural areas."
The auction is part of the Government's digital strategy to bring consumers a wider range of telecommunication products at cheaper prices.
New Zealand ranks 21st out of 30 OECD countries for broadband uptake.
The Government decided last year to bring forward the auction of the 2.3GHz spectrum, which it said was under-utilised, to allow telcos to plan long-term investment in wireless broadband technologies.
Rights to the spectrum, which expire in 2010, were allocated in 1990 and are held by state-owned broadcast and telecommunications infrastructure operator Kordia, with Telecom, Sky TV and Woosh.
Woosh last year added to its allocation by buying spectrum from Telecom and Sky TV.
The Government gave the industry two proposals to consider in April.
Option A is to break the 2.3GHz band into three separate lots. Bidders would be able to buy a maximum of 30MHz each, which the industry considers adequate for effective broadband services in high-traffic areas.
The plan also includes a smaller "managed park" available for geographically limited wireless-broadband proposals that may involve local government or iwi, said Cunliffe.
"A range of players will be able to use it on the basis of proposals which have good social purposes."
Under Option B, more spectrum would be available for nationwide wireless broadband with no provision for the managed park.
Two telecommunications companies with interests in developing services using WiMAX have publicly objected to the auction proposal.
CallPlus - which has invested $3 million in a WiMAX trial in Whangarei and says it has secured US$450 million ($657 million) from a major Japanese trading house to fund the roll-out of a national WiMAX network - said both Telecom and Vodafone should be ineligible for the spectrum because of their dominant position in the mobile market.
Woosh Wireless, which owns management rights over 16MHz of the 2.3GHz band, said it would like uncontested renewal rights, claiming it would be shut out of the bidding by competitors with deep pockets.
