Draft Five Year Spectrum Outlook 2018-2022 - Submission in response to ACMA's draft spectrum management work programme

 
Draft Five Year Spectrum Outlook 2018-2022 - Submission in response to ACMA's draft spectrum management work programme
Submission in response to
ACMA’s draft spectrum
management work programme

Draft Five Year Spectrum
Outlook 2018-2022

Public Version

July 2018
Draft Five Year Spectrum Outlook 2018-2022 - Submission in response to ACMA's draft spectrum management work programme
EXECUTIVE SUMMARY
1.   Optus welcomes the consolidation of the Australian Communications and Media
     Authority (ACMA) annual work programs into a single document, through the draft five-
     year spectrum outlook 2018-2022 (FYSO).

2.   Optus supports the increased transparency provided by the work plan. To enhance the
     level of transparency further, we consider there is merit in providing more detail,
     including: a more holistic overview of the strategic focus and scope of coverage; as well
     as further clarity on forthcoming consultation periods.

3.   The increasing demand for wireless broadband, including the roll-out of 5G networks, is
     a key driver of change to existing spectrum arrangements. Optus agrees with this focus.
     However, we believe greater focus should be placed on ensuring current and future
     mobile broadband spectrum ranges achieve efficient use and maximise the public
     benefits of use. To address these concerns, Optus recommends the ACMA specifically
     incorporate the following two key objectives in FYSO 2018-2022:

     (a)       The inclusion and prioritisation of the de-fragmentation of 3.4 and 3.6 GHz
               bands in Australia, which exist within the global 3.5 GHz band;

     (b)       Closer alignment of the Australian allocation roadmap for 5G spectrum with
               international allocations and developments.

4.   First, the efficient use of 5G spectrum in Australia is being prevented through the
     considerable fragmentation across the licensing arrangements that apply to spectrum
     bands within the global 3.5 GHz band in Australia. The ACMA, as a matter of urgency,
     should focus on de-fragmenting the licencing arrangement in the 3.4 GHz band and
     achieve consistency across the 3.4 GHz and 3.6 GHz arrangements. This process
     should be prioritised over releasing further 5G bands.

5.   The full potential of the 3.5 GHz band will remain unrealised and the spectrum assets
     inefficiently utilised until these sub-bands are harmonised and de-fragmented.

6.   Second, the allocation of new spectrum bands for 5G services should more closely align
     with international allocations and developments. While the focus on early access to 5G
     spectrum is welcomed, Australia’s small market size means material risks and
     inefficiencies could arise when decisions are made prior to international ratification and
     agreement. To avoid many of the planning and optimisation hurdles that have arisen
     through the process of releasing spectrum within the global 3.5 GHz band, the ACMA
     should not proceed with allocating spectrum in the other 5G candidate bands prior to
     international agreement and clear industry technology roadmaps are settled.

7.   Optus therefore considers there is merit in prioritising the de-fragmentation of the global
     3.5 GHz band and assessing global 5G candidate band developments following the
     completion of the current 3.6 GHz allocation process and before any further 5G
     allocations commence.

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Draft Five Year Spectrum Outlook 2018-2022 - Submission in response to ACMA's draft spectrum management work programme
THE PROPOSED 2018-19 SPECTRUM WORKPLAN AND FYSO
8.     The proposed 2018-2019 spectrum workplan and five-year spectrum outlook (FYSO)
       provides the ACMA with the opportunity to set out all spectrum related activities in a
       single document.

9.     Optus broadly supports the inclusion of a forward allocation work plan within the FYSO;
       and observes that spectrum allocation is not the only key spectrum management activity
       that the ACMA facilitates. Ideally, any opening chapter should include a summary status
       of all key spectrum bands in use, and under consideration, in addition to the current
       tables set out in the annual work plan ‘At a Glance’.

10.    Therefore, the FYSO should also set out all spectrum planning activities within the same
       framework. For example, the ACMA attempts to distinguish its spectrum planning
       activities into two main streams:

       (a)       Major band (re)planning activities; and

       (b)       Optimising established planning frameworks.

11.    However, significant links exist between these two streams of activity, where the
       outcomes of one stream may have significant impacts on the other.

12.    Optus observes that both workstreams do not always lead to new allocation activities.
       Therefore, it is important that the FYSO be improved to ensure that all spectrum bands
       in use continue to be acknowledged (e.g. even if the status is ‘no activity’). This is
       particularly important where spectrum bands have been licensed outside the spectrum
       and class licensing arrangements.

13.    It is also clear that in the short term, there will likely be significant developments in the
       spectrum policy and spectrum management environments, for example, activities related
       to the Spectrum Review Implementation, new spectrum allocations, changes to
       spectrum licensing arrangements, and increased activities relating to international
       engagement.

14.    The FYSO, including the proposed annual spectrum workplan, should be a single source
       document in which all these activities can be captured – regardless of planning status –
       and not be limited to spectrum bands expected to be allocated in the proposed
       timeframe. This would include a status update on all spectrum bands in use, and under
       consideration for future use, in Australia.

15.    Optus provides further comment below.

Improvements to the FYSO

Question 1: What further improvements could be made to the FYSO to make it easier for
stakeholders with the ACMA on its work program?

16.    Optus considers that the section set out under ‘At a glance - 2018-19 work program’
       provides a good starting point on how this information is provided. We propose several
       enhancements for the ACMA’s consideration, for example,

       (a)       Insert new table 1a – Planning – established planning frameworks not
                 currently under review. Alternatively, this could be the insertion of a new line
                 item in Table 1 with planning stage noted as having ‘no current activities’. This
                 could include a summary of all existing longer-term spectrum licensing
                 arrangements, by spectrum bands in which no specific spectrum planning

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Draft Five Year Spectrum Outlook 2018-2022 - Submission in response to ACMA's draft spectrum management work programme
activities are currently active. A key objective of this change would be to
                     highlight potential future timeframes in which increased activity related to these
                     bands, such as technical framework reviews or future reallocation, may
                     commence.

          (b)        Insert a new work item to Table 2 – and include any work relating to the de-
                     fragmentation of existing spectrum bands, e.g. the harmonisation of the global
                     3.5 GHz band in Australia. As new technology is developed and introduced
                     into the Australian market, it is important that the ACMA continue to facilitate
                     coordination, optimisation and updating of technical frameworks to support any
                     significant changes to the band between existing spectrum licensees.

          (c)        Table 3 should be updated to reflect Scenario 2 where one band does not
                     proceed to auction in the forward allocation work plan.

          (d)        Insert a new column in all tables to provide an update on how each activity has
                     tracked against the proposed timeline set out in the previous FYSO.

17.       There is also merit in including an additional table setting out all current and planned
          ACMA consultations and their proposed consultation periods for the current annual work
          plan (e.g. 2018-19). Ideally, this would also include key long-term projects that span
          multiple periods. A key objective of this change would be to highlight any significant
          timing overlaps in consultations being undertaken and to assist stakeholders in resource
          planning to support any responses being developed and ability to make contributions to
          the policy debate.

18.       As highlighted throughout the draft FYSO, there are many planned activities where the
          ACMA already recognises that further consultation and industry engagement is required.
          It would therefore be beneficial for this list to be summarised into a single table, setting
          out the proposed date for commencement; expected consultation duration; and any
          foreseeable next steps. While not all timeframes can be met even under best intentions,
          we consider there will be considerable benefit to all stakeholders in having a list of all
          planned consultations provided upfront.

19.       Optus also supports the continuation of other forums (both formal and informal) for the
          ACMA to provide further updates on planned activities. These would include periodic
          Tune Ups on key topics and developments as they arise.

Considerations for spectrum management

Question 2: Are there other technology developments or sources of spectrum demand the
ACMA should be aware of in considering spectrum management over the next five years?

20.       The ACMA has acknowledged that changes to existing spectrum arrangements are
          being driven by the emergence of 5G; requiring reallocation of new spectrum and the re-
          consideration of the characteristics of existing spectrum bands.1

21.       However, it appears that the ACMA is unnecessarily expediting its technical, planning
          and management processes to address what it considers to be the urgency of
          addressing the 5G spectrum challenge.

22.       Optus agrees there are many opportunities offered by 5G, across the complete family of
          5G spectrum bands that continue to be investigated while operating environments are
          still under development. However, the full benefits that are likely to arise from 5G are
          likely only to be realised when supported by the commercial and technical environments.

1
    ACMA, Draft FYSO 2018-2022, May 2018, pp.7-8

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The role of the ACMA, as the spectrum manager, is to facilitate appropriate forums to
           develop the technical frameworks that underpin any deployment and use cases, before
           any discussions on allocations can commence. This includes ensuring the scientific
           licence structure and pricing is further assessed so it is fit for purpose to support the
           testing of 5G use cases.2

23.        Learnings from the current 3.6 GHz allocation process highlight the perils of expediting
           and truncating the timeframes used to develop technical and allocation process
           frameworks. Namely, it is not ideal that these processes are conducted in parallel, with a
           matrix of options being canvassed in each of the separate consultations, and with the
           final outcome impacting both frameworks without further opportunity for stakeholders to
           comment on a set of consolidated documents.

24.        Optus is concerned that the ACMA may repeat these truncated processes through the
           premature allocation of mmWave spectrum in the 26 GHz band. Optus supports the
           long-term view that spectrum in the 26 GHz band will play an important role in the
           deployment of 5G. However, we do not support the premature allocation of this band
           prior to any finalisation and standardisation of spectrum in this frequency range. We
           observe that international developments have recently slowed in regard to development
           of this band. Consequently, the domestic allocation should similarly be paused beyond
           the proposed timeframe for the ACMA planning decision in Q2 2018-19 (Sep-Dec 2018).

25.        To support the development of the domestic market, the ACMA should continue to
           facilitate access to mmWave spectrum for 5G through scientific licensing arrangements
           at a reasonable cost. This would enable stakeholders to continue to develop potential
           use cases and test the technical viability of new equipment and devices for use in the
           band as they become available. Only through ongoing testing will the use case and
           device ecosystem be developed, and it is only once this is established that the case for
           longer term allocation of the spectrum asset should commence.

26.        Optus therefore submits that while establishing 3.4/3.6 GHz as a pioneer 5G band
           should still be high priority for ACMA – including de-fragmenting the 3.4 GHz band –
           future planning decisions for the allocation of other 5G pioneer bands requires future
           consideration and should not be expedited while significant technical and commercial
           parameters exist.

27.        In summary, Optus considers that:

           (a)        5G developments are recognised as still being in their infancy. International
                      standards, device and equipment availability, and ongoing pilots and 5G test
                      beds continue to be in development. Commercial and scalable 5G networks
                      are yet to be widely launched.

           (b)        Existing technical frameworks need to change to support deployment for the
                      rollout of 5G technology.

           (c)        The proposed timeframes for the allocation of 5G band in Australia appear to
                      be out of step with international developments. International harmonisation
                      and standardisation is yet to be finalised, while business and 5G use cases
                      still need to be established.

28.        That said, it is also important that work and support for 5G developments continue to
           evolve over time. Regulatory and technical frameworks continue to be developed to
           realise the potential benefits 5G technology can offer, with operators closely working
           with vendors to conduct trials, with a view to early deployment. For example, Optus has

2
    Please see Optus’ 14 September 2017 response to the ACMA’s Review of Scientific Licence Pricing Arrangements

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announced plans to commence the roll out of 5G technology in Australia by early 2019
       with a fixed wireless product in key metro areas.

29.    The ACMA should continue to support these efforts.

30.    Optus therefore submits there will be merit in pausing further 5G spectrum allocation
       activity following the completion of the 3.6 GHz allocation process to:

       (a)       Reassess international developments;

       (b)       Ensure the technical and licensing frameworks are fit for purpose to support
                 5G trial activity; and

       (c)       Focus resources on the de-fragmentation of the global 3.5 GHz band.

31.    Accelerated progression through the ACMA’s current stages of spectrum planning
       should not place operators in a position where they must make assumptions about how
       a band may be deployed (and the licence conditions that would result).

Planning – establishing new planning frameworks

Question 3: Do you have any feedback on the ACMA’s plans for monitoring, initial investigation,
preliminary replanning or re-farming of bands?

32.    These tables represent longstanding features of the ACMA’s planning frameworks in the
       FYSO, which Optus supports being continued.

33.    As noted by the ACMA, this table generally includes all spectrum bands currently in use,
       and under consideration for future use in Australia. It is not limited to spectrum bands
       expected to proceed to re-farming or reallocation phases. There are numerous bands
       that remain subject to ongoing monitoring by the ACMA for international developments.

34.    Importantly, Optus reiterates that establishing 3.4/3.6 GHz as a pioneer 5G band should
       remain a high priority for ACMA, while further consideration of other 5G bands needs
       more work both domestically and globally before allocation decisions are to be
       progressed. Ongoing support is needed from the ACMA (e.g. affordable scientific
       licences) for access to appropriate spectrum and facilitate an environment in which
       operators and their vendors can work together to undertake trials.

35.    Optus also notes that given the 5.6 GHz and 28 GHz bands have been proposed as
       alternate bands for incumbents in the 3.6 GHz band, ongoing work should progress to
       facilitate this transition. As such, this activity should be prioritised as part of the work
       associated with the establishment of 3.4/3.6 GHz as a pioneer 5G band.

36.    In summary, Optus considers that:

       (a)       Review of all the Australian sub-band arrangements in the global 3.5 GHz
                 band should be included as a new line item in the ACMA work plan.

       (b)       The process to convert existing apparatus licences in the 900 MHz band to
                 spectrum licence should be prioritised to ensure continuity of mobile voice
                 services over the medium term.

       (c)       Inclusion of bands considered under the previous mobile broadband work
                 plans should be reinstated.

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De-fragmentation of the 3.5 GHz band (3300 – 3800 MHz)

37.       The deployment of 5G will likely require a mix of different spectrum bands to meet
          different scenarios relating to coverage, connectivity and latency.3 As such, the 3.5 GHz
          band (3400-3800 MHz) has been identified as a pioneer 5G candidate band for
          deployments taking place before end-2020.

38.       Optus is concerned that there appear to be omissions in the spectrum work plan of the
          inclusion of potential 5G spectrum bands under consideration.

39.       For example, there is considerable development within the global 3.5 GHz band (3300 –
          3800 MHz) however, the ACMA’s work plan doesn’t reference the 3.4 GHz (3425-3492.5
          MHz and 3542.5-3575 MHz) and 3.5 GHz (3400-3425 MHz and 3492.5-3542.5 MHz)
          sub-band arrangements in Australia.

40.       The interaction of the global band, and Australian allocations in shown in Figure 1.

     Figure 1 Overview of the 3.5 GHz band

     Source: ACMA

41.       The existing Australian allocations shown in Figure 1 does not recognise two important
          factors:

           (a)        First, the existing spectrum licences in the 3.4 GHz band does not represent a
                      contiguous 100 MHz bandwidth outcome. It is currently truncated by the
                      existence of NBN Co’s apparatus licences, which makes secondary trading
                      with spectrum licence assets in the band challenging and also means
                      contiguous blocks are capped at 67.5 MHz and 32.5 MHz, respectively.

           (b)        Second, differences in geographic boundaries also hamper the current
                      usability of spectrum in the 3.4 GHz band. For example, this may lead to
                      associated technical issues such as co-existence issues across adjacent
                      geographic boundaries.

42.       Figure 2 further illustrates the impact of legacy allocations in the 3.4 GHz band, the
          maximum deployable channel size is only 60 MHz and 30 MHz, respectively. Together
          these clearly illustrate that there is a case for de-fragmentation activities, including re-
          stack opportunities between existing licensees, across the entirety of the band ensure
          efficient use of this pioneer 5G band.

3
    Department of Communications and the Arts, 5G – Enabling the future economy, October 2017, p.7
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Figure 2 Overview of spectrum and apparatus licences in the 3.4 GHz band

     Adapted from: ACMA

43.       5G trials have already commenced in Australia, with each of the major carriers working
          with equipment vendors in testing the applications and limits of the technology. However,
          definitive conclusions about the future use of 5G cannot yet be made. Optus observes
          that:

           (a)        It is too early to assess the benefits across the full suite of possible 5G
                      services and applications. Many use cases are still only in the development
                      phase and have yet to be tested outside lab conditions.

           (b)        It is too early to lock in the definitive 5G technical specifications, as the 5G
                      standards continue to be developed. A major milestone was reached in
                      December 2017, with initial approval of the first 5G NR specifications led by
                      the 3GPP. These are expected to be ratified upon completion of the 3GPP
                      Release 15 workstream in September 2018.

           (c)        Different operator and equipment vendor relationships continue to develop and
                      test application and the limits of the technology. This work is continually being
                      strengthened and evidenced by constant announcements of new 5G firsts
                      being demonstrated around the world.

           (d)        It is too early to confirm what new spectrum frequency ranges within which 5G
                      networks will be deployed. For example,

                            It has long been recognised “5G needs spectrum within three key
                             frequency ranges to deliver widespread coverage and support all use
                             cases. These three ranges are: Sub-1GHz, 1-6 GHz and above 6 GHz.”4

                            In the Australian context, the Department of Communications has
                             recognised that “the specific spectrum bands and quantity of spectrum
                             required for 5G are still being considered.”

                            The ACMA shares a similar view noting that in addition to the 3.6 GHz
                             band, other spectrum bands such as the 26 GHz (mmWave) band and
                             the 1.5 GHz band, are also potential candidates for 5G deployment.

           (e)        Finally, while 5G technologies can be expected to deliver improvements to
                      spectral efficiency, 5G will also require radically different network structures if it
                      is to be successfully deployed in Australia. In other words, 5G network
                      deployments will need significant network investment – especially given the
                      very large number of small cell sites needed to deliver ultra-high speeds and
                      low latency.

4
    GSMA, 5G Spectrum, Public policy position, November 2016, p.3
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44.       For the reasons highlighted above, while access to spectrum in the 3.6 GHz band is
          important and may allow initial 5G services to be rolled out faster, it is likely that
          widespread deployment is unlikely to eventuate until the network equipment and handset
          ecosystem is further developed.

45.       In addition, given the completion and successful allocation of all residual 3.4 GHz lots in
          late 2017, regard can now be directed to the re-configuration and potential restack of
          current spectrum holdings in the 3.4 and 3.5 GHz bands to potentially increase the
          efficient use of spectrum.

46.       Optus therefore considers it may be timely for the ACMA (and industry) to pause and
          reassess the urgency of addressing the 5G spectrum challenge. In doing so, the ACMA
          should consider undertaking further work to de-fragment the global 3.5 GHz band,
          including detailing the process steps and Ministerial decisions required to give effect to
          the change. This will necessarily include ‘untangling’ the different licensing
          arrangements that currently exist within the 3300 – 3800 MHz frequency range in
          Australia.

47.       Specifically, Optus strongly supports the 3.4, 3.5 and 3.6 GHz bands being included as a
          new line item in the ACMA’s work plan recognising that a further review on
          arrangements across these bands to achieve de-fragmentation and re-configuration of
          existing holdings is needed to maximise the overall utility of the bands.

Administrative allocation of 900 MHz spectrum

48.       The ACMA notes that it expects to firm up on implementation time frames for the re-
          configuration of the 900 MHz band during the year to optimise the band’s planning
          arrangements for LTE services.5

49.       The 900 MHz band is a key spectrum frequency within the Optus mobile network. The
          mobile services provided using the 900 MHz spectrum band represent the backbone of
          our national voice network – that is, it provides critical capability for wide area coverage
          (including for regional areas) and mobile voice services over the UMTS 3G network.

50.       Optus recognises that while the current allocation of 900 MHz spectrum may not be
          optimised for use with either 3G or 4G technologies, Optus agrees that the end goal of
          the planning process should be an allocation of 900 MHz frequencies that achieves the
          highest value use of the spectrum. To date, the ACMA’s proposed way forward places
          too high an emphasis on technical efficiency of the band, and insufficient emphasis on
          achieving the highest value use.

51.       Optus’ preferred approach is for the ACMA to progress a process to convert existing
          apparatus licences to spectrum licence at a pre-determined administrative price. We
          expect the result of this would be effective secondary trading.

52.       Optus therefore submits that the administrative allocation of 900 MHz spectrum would
          ensure continuity of mobile voice services over the medium term, particularly to
          customers in regional areas. Current users of spectrum in the 900 MHz rely on
          continued access to this band for the provision of national 3G voice services in the
          foreseeable future, and for 3G non-voice services particularly in regional areas where
          there may be no 4G available.

53.       It is also Optus’ view that any re-allocation of the 900 MHz band should not occur while it
          is being used to support 3G services to regional and metropolitan customers, unless the

5
    ACMA, Draft FYSO 2018-2022, May 2018, p.17

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re-allocation mechanism also provides a guaranteed way for incumbent mobile 3G
      services to be protected until commercially phased-out.

54.   The key issue for the ACMA to address is how to facilitate the re-configuration of the 900
      MHz band in a way which maximises the overall public benefits derived from the current
      and potential future use of the spectrum, including through the transition which will span
      across a generation of mobile technology.

Reinstate status updates for bands identified in previous mobile broadband work plan

55.   Optus also notes the improvements made to the FYSO by the ACMA to provide a more
      holistic view of the work program and planning processes, therefore removing the need
      to develop a separate work plan for mobile broadband.

56.   However, Optus is concerned that some of the previously identified bands in the mobile
      broadband work plans no longer seem to be included. While this is not intended to
      necessarily lead to any changes in licensing arrangements in the medium term, the
      inclusion of these bands in the ACMA’s work plan would provide certainty for existing (or
      potential future) licensees on the ongoing band status in the short term and support
      further investment. For example,

      (a)       Re-assignment of the bottom 2 MHz of the 2300 MHz band to mobile so that
                20 MHz channels can be deployed.

      (b)       Update on status of the 1900 – 1920 MHz spectrum that were not renewed
                during the recent licence re-issue process.

      (c)       Update on status of the 2100 MHz spectrum currently allocated as apparatus
                licences in regional areas.

57.   To this end, Optus considers that these bands be reinstated to the FYSO as new line
      items in the ACMA’s work plan to ensure that updates can continue to be provided.

General comments on spectrum bands under consideration

58.   Optus’ views on the other spectrum bands relevant to the five-year outlook are
      summarised below.

600 MHz

59.   Optus supports the continued monitoring status for the 600 MHz band.

60.   Optus supports retaining the definition of this band as 520-694 MHz and not redefining it
      as 614-694 MHz. Due to interference issues with the top of the 600 MHz band interfering
      with the 700 MHz band, it is preferable to have the whole band available. This issue was
      highlighted by Verizon who did not participate in the US 600 MHz auction due to
      interference with their 700 MHz network. While the spectrum is still usable there are
      additional costs to deploy due to the extent of interference.

61.   Optus also supports the position that the 600 MHz band be managed under MBB (i.e.
      proposed IMT arrangements), rather than broadcast arrangements.

3.8 GHz (3700 – 4200 MHz)

62.   Optus supports the continued monitoring status for the 3.8 GHz band, however is
      concerned that the definition of this band as 3700-4200 MHz may be too broad and will
      continue to be subject to considerable debate.

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63.   In general, Optus supports the observation that spectrum across the full 5G candidate
      band (3300 – 3800 MHz) are likely to be substitutable. Optus would support progression
      of 3700-3800 MHz for IMT. However, Optus considers that 3800-4200 MHz should be
      retained for FSS at this stage.

37 – 43.5 GHz

64.   Optus understands that different parts of the 37 - 43.5 GHz band are being considered in
      different regions (i.e. 37 - 40 GHz has been allocated for 5G use in the USA and 40.5-
      43.5 GHz is under consideration in Europe).

65.   Optus’ preference for future investigation and potential allocation is 40.5 to 43.5 GHz
      band is within the broader 37.0 to 43.5 GHz band. The 40 GHz band is almost
      unencumbered in Australia but lacks an allocation for mobile services which could only
      be granted at a WRC19. Allocation of this band for mobile services and its designation
      for 5G mobile broadband use would be subject to wider support outside Australia and a
      supportive ecosystem.

66.   There is also an expectation that some spectrum in this band will be designated in
      WC19 for IMT and therefore will be available no earlier than 2021, but is unlikely to
      reach scale until 2025-2030. Similarly, the progression of this band is also only likely to
      follow the completion of 26 GHz.

Dynamic Spectrum Access

67.   Optus submits that the case for dynamic spectrum access (DSA) continues to present
      limited opportunities for domestic application in Australia. It is also likely that the
      technical limitations, spectrum availability factors and user expectations will continue to
      make DSA approaches unlikely to be viable into the medium term.

68.   However, the ACMA notes that will continue to monitor international regulatory and
      technical developments – with potential sharing opportunities being highlighted within
      the 3.3, 4.5 and 4.8 GHz candidate bands.

Planning – optimising established planning frameworks

Question 4: Do you have any feedback on optimising established planning frameworks?

69.   Optus welcomes the introduction of this categorisation of spectrum planning activities,
      and which outlines the activities planned to be undertaken in the next year. In summary,
      Optus considers that:

      (a)       Review of all the Australian sub-band arrangements in the global 3.5 GHz
                band should be affirmed in the ACMA work plan; and

      (b)       The inclusion of satellite-related planning activities is a welcome addition.

De-fragmentation of existing arrangements in the global 3.5 GHz band be addressed

70.   Optus is concerned that this section currently omits any mention of the significant
      planning priorities that exists in relation to the spectrum licensing arrangements which
      apply to mobile and wireless services. For example, the planning activities relating to
      optimisation of the existing technical frameworks for spectrum arrangements in the 3.4
      GHz spectrum band.

71.   Optus understands there is keen interest by 3.4 GHz licence holders to progress de-
      fragmentation in the 3.4 GHz bands. In particular, Optus has suggested a new focus on

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de-fragmenting the various sub-band arrangements that exist in Australia within the
          global 3.5 GHz frequency range following completion of the 3.6 GHz auction.

72.       Optus also notes the ACMA’s reference to this activity in the FYSO 2018-2022,

                Following the completion of the current allocation priority of the 3.6 GHz band, the
                ACMA sees a major opportunity for efficiency gains through the de-fragmentation of
                the current 3.4, 3.5 and 3.6 GHz holdings. This will require both industry commitment
                and ACMA assistance to achieve.6

73.       Optus agrees with the ACMA’s observation that both the ACMA and industry will need to
          commit to work together to achieve the de-fragmentation objective. In this context, the
          ACMA will play an important role as the spectrum manager in facilitating discussions
          between existing licensees about process and decision-making steps.

74.       As a starting point, Optus recommends the ACMA commit to a set of principles in
          relation to any de-fragmentation activities for existing licences, that is:

          (a)          Allocation of contiguous lots;

          (b)          Minimising impact to deployed infrastructure; and

          (c)          Progress via secondary trading with Ministerial support, where necessary, to
                       give effect to desired change.

75.       As highlighted above, Optus considers that introduction of a work plan for de-
          fragmentation of the global 3.5 GHz is warranted. It is also envisaged that this work plan
          would also incorporate the ‘review of the 3.4 GHz technical framework’ in the ACMA’s
          2018-19 spectrum workplan and FYSO. As the ACMA has identified this activity as an
          issue it should be included in the work plan. Further detail on the scope and timing
          implications can be discussed in due course.

Satellite planning activities

76.       A fundamental theme in 5G discussions is growing recognition that there exists some
          complementarity between satellite and terrestrial technology. In addition to potential
          frequency range overlaps and adjacencies, the ACMA should remain cognisant there is
          a continued need for these technologies to co-exist in any future 5G ecosystem. Service
          linkages should span technologies and the greatest efforts should be extended to
          spectrum sharing and appropriate mitigation to allow this to happen.

77.       Optus therefore welcomes the inclusion of satellite-related planning activities in its FYSO
          and annual work plan. In particular, the draft FYSO now highlights the key areas of
          future activities and proposed timeframes for these consultations to commence.

78.       Optus provides comments on a number of these activities below.

Class licensing

79.       Class licensing arrangements and spectrum pricing will continue to play an important
          role in Ku-band, Ka-band, and other bands where ubiquitous service developments are
          emerging, e.g. in aeronautical and in land/maritime MSS communications – such as, in-
          motion terminals for connected cars and trains.

80.       This will also lead to spectrum pricing considerations and charging basis for ubiquitous
          satellite services needing to be reviewed. For example, in situations where Equivalent-

6
    ACMA, Draft FYSO 2018-2022, May 2018, p.9

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Power Flux Density (EPFD) levels should not interfere with terrestrial point-to-point
       services. The spectrum pricing should not then depend on a spectrum denial factor but
       the intended service area and clientele.

Role of the Australian Space Agency

81.    Optus considers that as the Australian Space Agency (ASA) becomes operational,
       further technology and international exposure will be highlighted by the ASA’s program
       of activities and interests. This is an exciting development for the Australian space and
       satellite industry, one which is of great economic importance to Australia. This will also
       lead to greater coordination of activities and cooperation between the ACMA and ASA.

Fixed satellite services

82.    Current frequency coordination arrangements to facilitate the ongoing coexistence of
       satellite and terrestrial technologies may need to be reviewed. For example, Optus
       acknowledges the SSWG’s observation there will be emerging pressure on higher band
       spectrum (e.g. the V-Band) to support High Density Fixed Satellite Service (HDFSS)
       User Equipment as systems migrate away from lower bands (i.e. the C-Band).

83.    Optus notes that, in most cases, fixed satellite systems (FSS) can successfully co-exist
       with emerging IMT technologies (5G). In many cases, this can be in the same
       geographic areas, provided that satisfactory licensing and/or authorisation processes
       have been completed and the technical parameters correctly reflect the parameters used
       in sharing studies (i.e. by the ITU-R TG-5/1).

84.    However, Optus also notes that there are scenarios where FSS cannot readily co-exist
       with IMT without an agreement to accept a degree of constraint. This is the case for
       example where FSS User Terminals are ubiquitous and may operate in any place at any
       time. To ensure the viability of these systems and FSS overall, Optus supports the
       SSWG’s proposal to consider 2 x 2 GHz HDFSS bands in the 40/50 GHz bands in order
       to align Australia with international trends. This would potentially allow satellite operators
       to service customers in all geographic areas while optimising IMT access to other bands.

Review of space licensing arrangements

85.    Optus welcomes the proposed review of space licensing arrangements for Q2 2018-19
       and considers further work on support for Earth Stations In Motion (ESIM) is a timely
       initiative given the commercial acceleration of these services.

Earth stations protection zones

86.    Optus supports the principle of Earth Station Protection Zones (ESPZ), in particular the
       establishment of two distinct ESPZs in Eastern Australia which are connected to
       separate infrastructure. Optus also notes the work underway in the 3.6 GHz band; and
       considers similar studies need to be extended to cover other satellite bands.

87.    Optus also considers there is a need to establish a second distinct ESPZ in Western
       Australia as a back-up to the current Mingenew site. Optus further considers, at a later
       time, establishing an ESPZ in Northern Australia.

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THE FORWARD ALLOCATION WORK PLAN
88.   Spectrum allocation is not the only key spectrum management activity that the ACMA
      facilitates. Optimising established planning frameworks should also be a priority.

89.   The previous section discussed issues with the ACMA unnecessarily expediting the
      allocation of 5G spectrum bands. Notably, 5G developments continue to be in their
      infancy, with international standards, device and equipment availability, and ongoing
      pilots and 5G test beds still in development. This remains true for almost all identified 5G
      bands – including 3.5 GHz, 26 GHz and 1.5 GHz – which are included in the ACMA’s
      forward allocation work plan.

90.   Existing technical frameworks will also need to change to support development for the
      rollout of 5G technology. Where bands, or sub-band arrangements, already exist within
      the identified 5G frequency ranges, it is clear that changes need to be facilitated to
      address any co-ordination and interference issues that may arise due to the change or
      co-existence of technologies. This issue is not insignificant and has been demonstrated
      to exist during the current 3.6 GHz allocation process.

91.   As a result, there is now a strong case for de-fragmentation activities that needs to be
      conducted to address these concerns, and to unlock any technical barriers that hinder
      the efficient use of and deployment of spectrum already allocated with adjacent and
      substitutable spectrum. Ideally, this should take place as soon as possible, and before
      any further allocations of spectrum within the global 3.5 GHz band (3300 – 3800 MHz).

92.   The proposed timeframes for the allocation of 5G bands in Australia appear to be out of
      step with international developments. For example, even though the ACMA has
      prioritised 26 GHz to be the next band for consideration, it remains unclear how and
      when the technical frameworks will be ready within the proposed timeframe.

93.   Optus therefore considers that the proposed Q2 2018-19 timeframe for the ACMA
      planning decision for the 26 GHz band be delayed until well after the completion of the
      3.6 GHz auction.

94.   Optus strongly supports greater alignment between the domestic Australian regulatory
      agenda and other global spectrum processes. For example, closely aligning with
      WRC19 and global roadmaps, enables prospective spectrum bidders to construct
      business cases with greater certainty on the regulatory inputs. This will similarly promote
      the efficient use of and investment in the spectrum market. It will also ensure that use of
      the allocated spectrum does not remain idle until such time as the spectrum band
      ecosystem catches up, thereby maximising the public benefit from use of the spectrum.

95.   In general, Optus submits that the ACMA should adhere to a set of general principles for
      determining if/when spectrum should be allocated. These include:

      (a)         When the spectrum will be available for use/unencumbered;

      (b)         The ecosystem being developed (and if it is ready) for deployment; and

      (c)         Whether there demand for the spectrum on offer.

96.   Irrespective of any decision to proceed to formal allocation of spectrum, the ACMA
      should continue to provide interim arrangements to make spectrum available, including:

            continuing opportunities for spectrum users to enter into commercial arrangements to
            share infrastructure or spectrum that will realise more efficient spectrum use.
            Achieving more efficient configuration and use of bands that are already licensed for

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wireless broadband is a vital adjunct to the clearance and reallocation of new bands
                to address rising demand for wireless broadband.7

Allocation scenarios for comment

Question 5: Do you have any comments about the ACMA approach to the forward allocations,
or the specific allocation scenarios?

97.       The draft FYSO 2018-2022 sets out two allocation scenarios for further comment.
          Scenario 1 effectively adopts the same order discussed under option 2 in the draft FYSO
          2017-2021, while Scenario 2 adopts the same order discussed under option 3.

98.       Optus reiterates that out of the two proposed scenarios, Scenario 2 where the 900 MHz
          band does not proceed to auction in the proposed timeframe remains the preferred
          scenario. That is not to say, however, that Scenario 2 is the optimal approach; only that
          it is preferred over Option 1.

99.       Optus further submits that in finalising the forward allocation work plan, the ACMA
          should consider the current learnings from the 3.6 GHz allocation process. Namely, that
          unnecessarily expediting an allocation process before technical frameworks are finalised
          risks entrenching incompatible or legacy technical standards into a licensing
          arrangement that may create technical barriers for future use of the band.

100.      Optus reiterates that we do not support any proposal for the ACMA to run sequential
          staggered allocations. Optus does not support the conduct of parallel auction processes
          as this will add uncertainty for spectrum planning and valuation activities, as well as put
          unnecessary strain on existing resources. Optus similarly does not support the combined
          allocation of bands, particularly where the bands are not direct substitutes.

101.      As general considerations,

          (a)          The sequencing of allocation processes should be closer aligned to the start of
                       the use of the spectrum. This is especially the case for bands that are flagged
                       for use with future technologies where standards and use cases are not yet
                       fully developed.

          (b)          The timing of allocations will have important implications for potential spectrum
                       users, including business and network resourcing activities, as well as
                       spectrum valuation activities.

          (c)          There should be no more than one auction conducted in a calendar year.

102.      To this end, Optus considers there will be merit in taking a pause following the
          completion of the current 3.6 GHz allocation process – before the commencement of any
          further 5G spectrum allocations.

Allocation Scenario Two is preferred over Option 1

103.      Optus supports the scope of bands for inclusion in the allocation programme set out in
          Scenario 2, and strongly supports the assumption that the 900 MHz band does not
          proceed to auction.

7
    ACMA, Draft FYSO 2018-2022, May 2018, p.10

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Figure 3 Scenario 2 – Pause after 5G allocations, and one band does not proceed to auction

                  ACMA planning         Minister decision       Auction
                  decision              where applicable
 3.6 GHz          Q2 2017-18            Q3 2017-18              Q2 2018-19 (Sep-Dec 2018)
 26 GHz           Q2 2018-19            Q3 2018-19              Q4 2019-20 (Apr-Jun 2020)
 1.5 GHz          Q2 2020-21            Q3 2020-21              Q4 2021-22 (Apr-Jun 2022)
 850 MHz          Q3 2018-19            Q3 2021-22              Q2 2022-23 (Sep-Dec 2022)

  Source: ACMA

104.   Of the two available options, this represent a scenario most consistent with the
       objectives of the Act and the stated objectives of the ACMA to adopt a more strategic
       outlook to spectrum management – that better balances the need to maximise public
       benefits of use and the aim to achieve technical spectral efficiency.

105.   Optus supports the proposed improvements in the proposed timeframes, however
       reiterates that this could be further improved. There should be no more than one auction
       conducted in a calendar year.

106.   Optus similarly reiterates that the focus of current work should include 900 MHz and 3.6
       GHz only, followed by the other bands two to three years later. Any earlier timing runs
       the risk of Australia being out of step with global use and standards.

107.   To be specific, Optus strongly supports the scenario where spectrum in the 900 MHz
       band does not proceed to auction. The current users of the 900 MHz band continue to
       rely on this spectrum to deliver 3G mobile voice services. Optus notes that 900 MHz
       continues to be vital spectrum for 3G networks in Australia, especially regional Australia.
       The current use of 900 MHz services indicates the risk of service discontinuity is too
       large to continue to the proposed reallocation process. The optimal outcome for 900
       MHz is to transfer existing licences to spectrum licences at a pre-determined price. This
       will in turn promote secondary trading, allowing industry to settle the efficient allocation
       of the band – consistent with the objectives of the Act.

108.   For the remaining bands, Optus proposes that all allocations occur closer to the
       completion of band clearance and when the ecosystems for each band are more
       developed. Optus also reiterates the following scenarios be considered.

       (a)       The 1.5 GHz process commencing in 2020, with an allocation in 2022;

       (b)       The 26 GHz process commencing in 2021, with an allocation in 2023; and

       (c)       The extension 850 MHz process commencing in 2022, with an allocation in
                 2024.

109.   The key challenge for future spectrum allocations is the need for alignment of domestic
       regulatory agenda, WRC19 outcomes, globally derived and ecosystem roadmaps with
       investment decision making processes.

110.   This view has been shared with the ACMA on numerous occasions, including Optus’
       submission to the ACMA in response to FYSO 2017-2021 (see Figure 4).

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Figure 4 Optus’ view on the release of future IMT bands

                           Allocation preparations            Auction            Use
          600 MHz          Retain monitoring status [IMT not BSB, 520-694 MHz]

          850 MHz                     2022                     2024           2026+

          1.5 GHz                     2020                     2022           2024+

          26 GHz                      2021                     2023           2025+

          37-43.5 GHz      Support 40.5-43.5 GHz identification for IMT at WRC19

  Source: Optus

Allocation Scenario One is not ideal

111.   Optus does not support the case for Scenario 1 in its current form. In particular, the
       scenario should be amended to reflect the view that the 900 MHz allocation should be
       removed from consideration in the pre-2021 timeframe, with a preference for an
       administrative allocation.

112.   Regardless of any sequencing, the timing of the allocation processes continues to be
       problematic. For the reasons stated above, there appears to be no rationale to support
       such an aggressive allocation process across multiple bands. Further, the document
       does not contain sufficient reasons as to why the timing would be beneficial and
       maximise the public benefits of use.

113.   Optus is concerned about the timing of the auctions proposed in Scenario 1 in practice
       would result in four auctions between 2018/19 and 2020/21.

114.   Optus considers that even if each auction could be completed over a three to six-week
       period, there remains the significant risk that the processes and separate auctions will
       overlap. This issue is also exacerbated where prolonged recess periods for public
       holidays and ‘care taker mode’ associated with federal elections are taken into account.

115.   The timing of the auctions appears even less feasible where there is expected to be
       significant overlap in the allocation activities. Optus is also not clear on the timing
       rationale given most of the spectrum on offer is not expected to have a developed
       ecosystem until 2024.

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OTHER ACMA PLANNED SPECTRUM ACTIVITIES
Spectrum Review Implementation

Question 6: Do you have any feedback on the ACMA’s approach to the Spectrum Review
Implementation?

116.       With significant delays in the progress of the implementation of Spectrum Review, the
           ACMA has taken a practical approach by providing initial supporting information to assist
           industry understand the implications of the new framework.

117.       It is Optus’ view that such supporting information will need to be revised and expanded
           to take into account the second Exposure Draft (ED2) of the new Radiocommunications
           Bill, including the accompanying transitional amendment Bills as they are released for
           review.

118.       Optus understands there will be a compressed consultation timeframe for review of the
           draft Bills before they are introduced to Parliament.

119.       As such, it is Optus’ view that the focus of additional ACMA’s supporting material should
           be produced to align with this compressed timeframe and include:

           (a)        the key changes to the licensing, pricing, and planning frameworks between
                      legacy arrangements and the new framework.

           (b)        detail on how transitional arrangements will be managed, specifically with
                      regard to spectrum licence renewal arrangements for licences issued under
                      the current Act.

Other planned new/ongoing spectrum activities

Question 7: Do you have any comments about the ACMA’s planned activities for licensing and
licensing systems, pricing, compliance and enforcement, and international engagement?

120.       The FYSO also sets out a range of other ACMA planned activities including:

           (a)        Licensing and licensing systems;

           (b)        Pricing;

           (c)        Compliance and enforcement; and

           (d)        International engagement.

121.       Optus welcome the continued inclusion of these planned new and ongoing activities in
           the ACMA’s FYSO and annual work plan.

122.       With regard to pricing, as discussed above, Optus supports a further review of the
           scientific licence structure and pricing, so it is fit for purpose to support the testing of 5G
           use cases.8

8
    Please see Optus’ 14 September 2017 response to the ACMA’s Review of Scientific Licence Pricing Arrangements

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