5G: ACCC prepares spectrum allocation limits for first mmWave auction

The Australian Competition and Consumer Commission (ACCC) has begun a public consultation on allocation limits for telcos that seek to snap up spectrum in the first mmWave band to be auctioned for use with 5G services.

The Australian Communications and Media Authority (ACMA) is preparing to auction off spectrum in the 26GHz band in early 2021.

The ACMA intends for the 24.25-27.5GHz frequency range to be used for 5G services, greatly expanding the spectrum on offer for Australian telcos. The first 5G services being offered by Telstra and Optus have been based on the 3.6GHz band (Vodafone is also preparing to launch 5G services using the band).

Communications minister Paul Fletcher In December approached the ACCC seeking advice on competition limits for planned auctions of both the 26GHz and 28GHz bands. For the 28GHz band, the ACMA is proposing apparatus licences that will be allocated administratively rather than through auction. One of the points that the minister has sought ACCC input on is whether apparatus-licensed spectrum holdings in the two bands are taken into account when it comes to allocation limits.

The ACCC is due to reply to Fletcher by 15 May.

 “The 26 GHz band is the first high-band spectrum earmarked internationally for 5G deployment to be allocated in Australia,” an ACCC discussion paper released today notes.

One competition issue flagged by the ACCC is the potential for a “significant concentration in the ownership of high-band spectrum holdings as a result of this allocation”.

The ACCC says there is a risk that “asymmetric” spectrum holdings could hamper competition, and a risk of “efforts towards spectrum monopolisation as well as strategic bidding to block competitors from acquiring spectrum”.

“We would be concerned if, for example, as a result of this allocation it was possible for one operator to obtain the majority of spectrum available, or if an operator was precluded by the allocation of spectrum, from being able to offer its desired services and compete effectively in the short or long term,” the paper states.

By the time of the auction, the merger of Vodafone Hutchison Australia (VHA) and TPG is expected to be complete. The post-merger TPG Telecom Limited as well as Telstra and Optus will all seek significant amounts of spectrum in the auction. In the 3.6GHz auction, Telstra outspent its rival mobile network operators (MNOs). A joint venture established by TPG and VHA after the pair announced their intention to merge was the second highest bidder.

Although the Federal Court decision allowing the VHA-TPG merger to proceed has cruelled the ACCC’s ambition for Australia to have a fourth MNO, the 3.6GHz auction also saw some spectrum picked up UK-based Dense Air, which intends to launch a carrier-neutral 5G network that can deliver coverage infill and private 5G networks.

mmWave spectrum is expected to help deliver 5G use cases involving enterprise and industrial applications that rely on high bandwidth and/or low latency.

“The enterprise market for 5G is nascent but evolving as 5G deployments progress,” the ACCC paper notes. “At this early stage, it is difficult to assess the current state of competition in this market. However, the market is likely to be one of enormous diversity.”

The ACCC adds: “A key aspect of the enterprise market is the ability to provide connectivity to industry verticals for delivery of a range of services and applications. There is an opportunity for existing MNOs and satellite operators to play a significant role in this market, but also an opportunity for a number of new entrants, including industry verticals that deploy a private network and existing private network operators.”