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Spectrum Auction To Start In July

24 April, 2002

Communications Minister Paul Swain today confirmed that the next auction of radio spectrum management rights will start on 23 July, 2002.

The intention to hold an auction in mid-2002 was originally announced by Mr Swain in December 2001.

“The auction of radio spectrum management rights will increase the amount of spectrum available to telecommunications providers,” said Mr Swain.

“The auction content is unchanged from that announced previously and includes radio spectrum that is suitable for broadband services. Accordingly, telecommunications providers will have an enhanced ability to provide better services to their customers," he said.

The blocks to be auctioned are as follows:

- Nine blocks of 3.4 - 3.6 GHz spectrum, suitable for radio-based local loop telephony and internet connections, generically referred to as wireless local loop (WLL)

- Five blocks of 24.5 - 26.4 GHz, suitable for short distance, high bandwidth telephony data and video distribution services typically in dense urban areas, generically referred to as local multi-point distribution services (LMDS)

- Spectrum around 900 MHz, suitable for cellular services, similar to those currently provided by Vodafone and Telecom

- A single lot of 2 GHz spectrum that was not sold in the previous auction.

To meet government’s commitment to regional development, two additional WLL lots will be reserved for licensing on defined terms in particular areas. This is to ensure that all New Zealand communities are able to access two-way high-speed internet services. This reservation will allow the government to meet any demand not satisfied by commercial operators.

Updated auction rules and details of the lots to be auctioned have been published by the Ministry of Economic Development in the auction catalogue, now available on the Ministry’s auction website:

Following criticism of the time taken to complete last year’s 2 GHz auction, the rules have been revised to ensure this auction finishes quickly. Key rule changes are outlined in the table below.

Because the auction is smaller than last year’s - 16 lots compared to 1,035 - it is expected to be much quicker.

“Over the next fortnight, interested parties will have an opportunity to comment on the revised rules,” said Mr Swain.

Old Rules New Rules

All of the lots in one large schedule. The lots are separated into schedules based on the lots being interrelated. i.e. There is one schedule each for:

- Wireless Local Loop (WLL)

- Local Multipoint Distribution (LMDS)

- Cellular (900 MHz)

- 1800 MHz management right

Each schedule is able to close separately, so obtaining a result for one schedule is not dependent upon bidding activity in the other schedules.

The auction concludes after two clear rounds in which no bids are made and no withdrawals are received. Each schedule concludes after one clear round in which no bids are made and no withdrawals are received.

No limit on withdrawal of bids. Bidders are limited in the number of withdrawals they can make in each schedule (3)

No rules requiring bidders to make bids - as a result some bidders did not make a bid until after one clear round had occurred. Rules require bidders to bid within two rounds if they do not hold the highest valid bid on a lot in that schedule.

Bidders were able to register and take a part in the auction after the auction had started. Bidders must register two weeks prior to the start of the auction.

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