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25 Jun 2010

Government paves the way for "digital dividend" auction

The process for the reallocation of broadcasting spectrum that will result from the switch off of analog television has become clearer following announcements by the Minister for Broadband, Communications and the Digital Economy and the Australian Communications and Media Authority.

The Minister has announced that 126MHz of spectrum will be freed up as a result of the progressive switch from analog television transmission to digital television transmission in Australia due to be completed by 31 December 2013.

This spectrum, known as the "digital dividend", has been described as the "waterfront property" of spectrum for its ability to carry signals over long distances, penetrate buildings and carry large amounts of data. The Minister said this represents a "once-in-a-generation opportunity to improve communication services available in Australia'".

Uses of the digital dividend spectrum are expected to include advanced wireless broadband services, which the ACMA says will massively expand the capacity of mobile telephone services to carry broadband data.

How will the digital dividend be released?

The digital dividend is to be released as a block of spectrum in the upper ultra-high frequency (UHF) band, comprising the frequency range 694 to 820 MHz inclusive.

The Minister has indicated that there will be a price-based allocation of the spectrum, and that Government aims to auction the digital dividend spectrum in the second half of 2012. The Government hopes that this will provide enough time for successful bidders to plan and deploy networks using the spectrum as soon as analog transmission is turned off, minimising any dead air between the changeover.

What will be the impact of the release of the digital dividend?

As well as presenting opportunities for users of the new spectrum, the auction of the digital dividend will also have an impact on existing users as broadcasting services will need to be reallocated out of the digital dividend and reorganised in a more efficient manner.

The ACMA has announced that it will commence a consultation process with potential spectrum purchasers, with a public discussion paper to be released later this year setting out planning and allocation issues and options for new spectrum licences.

The announcements followed a public consultation process conducted by the Government which received almost 120 submissions.

In its submission to the Digital Dividend green paper, the Australian Mobile Telecommunications Association (AMTA) indicated that Australia’s economy could be boosted by up to $10 billion if at least 120 megahertz of usable spectrum was unlocked from the digital dividend.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.