TUANZ submission on the five year spectrum outlook

TUANZ thanks the Ministry for the opportunity to comment on the Radio Spectrum Five Year Outlook.

As you know, TUANZ (the Telecommunication Users Association of New Zealand) represents around 300 New Zealand business customers of telecommunications and as such our focus in all matters such as this is on customer benefits.

New Zealand is unique in many respects – we have a relatively small population but live in a country as large as the UK or Japan. We have limited competition in many aspects of our basic infrastructure and in terms of use of scarce resources – such as radio spectrum – we face challenges in making sure we encourage investment without simultaneously reducing competition in the market place.

TUANZ has seen early versions of both InternetNZ and Jonathan Brewer’s submissions and broadly speaking we support both. Brewer’s report into the use of “white space” guard bands is very exciting and TUANZ would encourage the Ministry to look into whether or not New Zealand can take advantage of this kind of flexibility in terms of guard band usage. The idea that would could help create a market for an ultra-fast wifi equivalent in the spaces between licensed spectrum is an enticing one and we would encourage the Ministry to pursue it further.

We would also like to draw the Ministry’s attention to a point made by Brewer in his submission:

Measurements taken by University of Auckland researchers Chiang, Rowe, & Sowerby (2007) showed that in Auckland, arguably New Zealand’s busiest radio spectrum environment, real spectrum use in 806-2750MHz was only 6.2%. These measurements included all of the cellular and most popular broadband bands. Almost 94% of the New Zealand’s most valuable radio spectrum was quiet it its largest market.

Taken in isolation, the UoA study might seem fantastic or flawed. Viewed in the context of studies around the world including the US and Singapore, some funded by the United States Defence Advanced Research Projects Agency, these measurements are unsurprising. It has been conclusively proven that traditional management techniques do not result in the efficient use of the radio spectrum.

TUANZ is of the opinion that it is critical to New Zealand’s economic development that we make the most of our few natural resources and that spectrum use of only 6.2% of the available bandwidth in our largest city is appalling and should be addressed as soon as possible. Opening up our spectrum reserves will increase the use of both portable and mobile broadband services and this will in turn drive down costs to users and increase usability of such services. Bandwidth isn’t a scarce resource, yet we are regularly told that it is.

To this end, the Crown’s approach of auctioning off management rights must be revisited – something we address later in this submission.

TUANZ would like to address a number of broader issues over and above those raised by InternetNZ and Brewer.


In May 2009, Vodafone took Telecom to the High Court alleging interference from Telecom’s pre-launch XT network. While the action was settled out of court, the Ministry should have played its part in policing the radio spectrum management rights. That it didn’t meant the industry as a whole was negatively impacted by the adverse publicity generated by the court case.

If the Ministry is to issue management rights it needs to ensure that rights holders are treating each other fairly and that those rights are being upheld. TUANZ would expect to see the Ministry work to ensure any future such interference be minimised both from a technical and from a publicity point of view.

Choosing winners

While the Ministry claims it doesn’t “choose winners” when it comes to deciding what technology path the industry will follow, its choice of spectrum band sizes and whether or not they are paired does, by default, force a direction on the industry.

TUANZ would suggest that either the Ministry explore allowing similar technologies to work side-by-side and the difficulties therein (TDD vs FDD for example) or that it drop the pretence that it hasn’t already decided which path will be triumphant before embarking on any particular sale of rights.

Technology Roadmap

Having said that, TUANZ would welcome the creation of an open and contestable technology roadmap for the country. It’s important that we have a clear vision of the direction the Ministry is taking, both from an investment point of view but also for consumers of telecommunication services. Various international agencies, such as the ITU and IEEE, have extended roadmaps for technology that we should be aligned with – TUANZ would support any such move from the Ministry towards this level of transparency.

Fast Follower

As has been noted elsewhere, New Zealand is not a large country and as such we cannot set the agenda with regard to either spectrum allocation or technology deployments. As such, TUANZ recommends we continue in the “fast follower” mode, rather than moving to an “early adopter” or market leader model when it comes to such things.

Expert advice

TUANZ understands the ministry has, from time to time, seconded telco staff into its ranks in order to attend conferences or even to represent New Zealand interests on the international scene.

TUANZ questions whether these telco experts should be used in this fashion as they clearly have loyalties and allegiances with their employers first and foremost. TUANZ would like to see the Ministry able to employ its own experts, able to represent New Zealand’s needs on the international stage and to help develop spectrum policy without fear of bias towards particular interests.

Dividend: Now or Later

TUANZ firmly believes that the real value from spectrum rights comes not in the form of a cash injection at the time of either sale or renewal of management rights, but in the efficient deployment of that spectrum resource to better encourage broadband uptake and deployment.

As such, TUANZ would like to see the Ministry move away from the pure auction model towards either a “beauty pageant” or similar approach. There are a number of alternatives in use around the world and we would like to see more emphasis placed on the longer term outcome from these rights, rather than short term gain for Crown coffers.

Maori spectrum rights

For better or worse, in 2001 the Crown reached an agreement with iwi over the sale of 2100MHz spectrum rights that included apportioning off a block of spectrum and the creation of the Maori Spectrum Trust.

That Trust helped create the company now trading as 2Degrees Mobile and it has brought real competitive pressures to the New Zealand cellular market, for the first time since Vodafone overtook Telecom in terms of customer numbers.

TUANZ would not like to see that good work wasted – regardless of broader views on Maori rights over other forms of natural treasures, the approach taken by the Crown in 2001 has delivered for the users of telecommunications in New Zealand and we would encourage the Ministry to continue to develop that relationship further.