Regional businesses could lose their commercial lifelines, if federal government adopts recommendations from the telecommunications regulator.
Wireless internet providers are sweating on a determination from Communications Minister Mitch Fifield that could determine the future of wireless internet providers that service roughly 200,000 regional businesses.
Telecommunications regulator the Australian Communications and Media Authority (ACMA) wants to auction off to the highest bidder the range of frequencies, known as spectrum, that is used by wireless internet service providers.
Regional wireless internet service providers have formed an industry association to lobby the ministeragasint ACMA’s proposal.
It will set back development of regional telecommunications by a decade, or more
The association is warning that while the NBN could, in theory at least, satisfy residential connectivity requirements, regional business will be stuck without the upload capacity they need to remain viable.
Wireless internet is a vital service in the bush, providing the only viable internet link for the hundreds of thousands of regional business across the country that operate outside telstra’s old fixed copper line network.
Complaints about speed and reliability notwithstanding, residential internet users outside the landline network can access a range of internet options including the National Broadband Network’s wireless and Skymuster satellite and private mobile broadband providers.
Unfortunately these options are not useful to businesses. They are designed for residential services, prioritising download over upload capacity to maximises capability for general web surfing and streaming services.
But swift upload capability is critical for businesses, according to Wireless Internet Service Provider Association of Australia secretary Lynda Summers, who runs NSW based regional wireless provider Countrytell.
Modern farms upload and curate large amounts of data from smart machines and sensors, logistics providers connect to their moving parts and increasingly companies link to remote employees with online video conferencing.
“Wireless providers can tailor services for business. They need thick pipes for data coming in and thick pipes going out,” Ms Summers said.
“We also use innovative business models which don’t just rely on population density to drive investment and innovation.”
Ms Summers said ACMA’s spectrum auction would lock small wireless providers out of the market.
“It will set back development of regional telecommunications by a decade, or more. Spectrum is a finite resource. Auctioning it to the highest bidder means continued rationalisation of service provides, increased monopolies and no innovation to benefit the community.”
ACMA wants the 3.6 gigahertz spectrum, which was licensed to wireless providers in 2009.
The value of spectrum lies in the economic and social benefits it can provide to citizens and consumers, not in financial returns to the Budget
Labor’s regional development and infrastructure spokesman Stephen Jones said Mr Fifield should weigh ACMA’s advice against that from the Australian Competition and Consumer COmmission (ACCC) chairman Rod Sims.
“Rod Sims says you have to ensure you take competition and future provision of wireless broadband services into account when you allocate spectrum,” Mr Jones said.
“The market will fail rural consumers’ needs unless it is carefully designed.”
The spectrum is needed for 5G, the next generation of mobile broadband network technology. The technology is expected to be available by 2020 and telcos want to start investing in new infrastructure such as towers now.
5G promises quicker connection speeds than the current 4G technology, but it needs more antennas per square kilometre to achieve its faster connections.
ACMA wants to auction 20 year licences on the 3.6GHz spectrum to the highest bidder and offer incumbent wireless networks a seven year window to transition to the 5.6GHz spectrum.
ACMA has proposed a geographic division of permits into three zones for the auction. Two cover metropolitan areas, the third covers all regional areas.
It is likely large telcos like Telstra, Vodafone and Optus would have the deep pockets to outbid smaller competitors for licences in the regional zone, competing for businesses in large regional towns like Canberra, Townsville, Dubbo, Albury, Bunbury and so on.
But market outside population centres is not big enough to make it commercially viable for telcos to invest the infrastructure required to provide reliable networks.
Wireless providers argue there are few available licences in those frequencies and that it would be too costly for them to adapt or buy new equipment to adapt to the 5.6GHz spectrum where only a small amount will be available, limiting feasibility.
ACMA has also noted licence holders could offer to commercial arrangements with wireless providers to operate in regional areas whre tehy are not present.
Ms Summers said it was unclear how each element of ACMA’s plan would work.
“We haven’t even been advised what frequencies are available,” she said.
“Wireless service providers are very cynical about the likely larger telcos would cooperate to share the market smaller providers.
“10 years ago we battled to get that 3.6GHz spectrum that noone wanted. And now it’s in demand it’s being snatched off us.”
In November the ACCC’s Rod Sims said the auction of spectrum would likely result in companies acquiring spectrum to prevent access to their competitors and promoted its social value over its commercial worth.
“The value of spectrum lies in the economic and social benefits it can provide to citizens and consumers, not in financial returns to the Budget.”
The wireless providers associations has proposed what a spectrum sharing system, dubbed dynamic spectrum access, which is being adopted internationally.
The association said dynamic sharing systems remove the need to licence monopoly control of large areas to telcos.
Simply put dynamic spectrum access technology works in real time, automatically allocating access to a range of providers.
ACMA dismissed association’s proposal, arguing commercial arrangements would create a hierarchical system that would inevitably disadvantaged smaller providers anyway.
Mr Fifield’s office said the Minister will carefully consider the final form of the ACMA’s recommendation, including the implications for regional Australians, before making a decision.
The ACMA has proposed a seven year transitional period for wireless providers using the 3.6GHz.
ACMA has argued this period is beyond the lifespan of existing technologies.
The wireless providers association has questioned the availability of licences in the 5.6GHz spectrum, which ACMA has proposed for incumbents that miss out on licences in the auction.