Govt tightens airwaves auction rules

By ADAM GIFFORD

The Government has changed the rules for its next spectrum auction, to avoid it dragging on for seven months like the last one.

Communications Minister Paul Swain said the auction, to be held in the middle of next year, would include spectrum of use to existing cellphone network providers, as well as frequencies for new high-speed internet services.

Two additional wireless local loop (WLL) blocks would be set aside to be licensed in particular areas on defined terms.

"This Government is committed to regional development, and in particular aims to ensure that all New Zealand communities are able to access two-way high-speed internet services by the end of 2003," Mr Swain said.

"Reserving a small portion of the WLL spectrum will allow the Government to meet any demand not satisfied by commercial operators."

Some of this could go to regional trusts trying to develop broadband internet schemes.

On offer are nine blocks of spectrum in the 3.4 to 3.6GHz range, which is suitable for radio-based local loop telephony and internet connections. No buyer will be able to take more than three blocks.

Five blocks are in the 24.5 to 26.4GHz range, which is suitable for short-distance, high-bandwidth telephony data and video distribution services, typically in dense urban areas.

This is known as local multipoint distribution services (LMDS).

No bidder will be allowed more than two of these blocks.

Also on offer is a single lot of 2GHz spectrum that did not sell in the previous auction, and one block of spectrum around 900MHz.

A Ministry of Economic Development senior analyst, Ian Hutchings, said this lay between that used by the European GSM standard adopted by Vodafone and the United States' standards favoured by Telecom.

"We had to warehouse it because of interference problems, but those are less now.

"What we are doing is auctioning a bit in the middle, and whoever is successful will specify which side of the frequency they want."

Mr Hutchings said the auctions would end after one clear round, rather than the two required in the last auction.

"There will also be activity rules, so if people just sit there and don't bid they could lose their eligibility.

"We're trying to get certainty and quickness into the process and make sure it spreads the spectrum round."

Companies interested in the blocks are likely to include Telecom, Vodafone, TelstraClear, newcomer Econet, Broadcast Communications and Walker Wireless.

Walker chief executive Bob Smith said the Government clearly wanted to make sure the market was not inhibited by lack of spectrum.