ACCAN urges telcos to reinvest savings from reduced spectrum licence fees into services that directly benefit consumers, rather than keeping windfall profits.
Spectrum is a finite and valuable public asset. The Australian Communications and Media Authority (ACMA) is proposing to renew spectrum licences for Australia’s major telcos, rather than take them to auction as global best practice and academic consensus would recommend.
The position paper reaffirms ACCAN’s view that auctions are the best way to manage spectrum licences. It also builds on that recommendation: if ACMA is to pursue its licence renewal approach, they should put in place legal guarantees that money saved by telcos will be reinvested into a mix of further network investment and price reductions for consumers.
ACCAN CEO Carol Bennett said that the public is being sold short on this approach, and that if ACMA will not reconsider its decision, it needs to demand that telcos commit money saved to causes which will help consumers, rather than boosting telco bottom lines.
“Spectrum is a scarce public resource. If ACMA won’t take these licences to auction, it must at the very least require that the money saved by telcos is reinvested in ways that help consumers, rather than simply padding telco profits,” Ms Bennett said.
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Industry has claimed that lower licence fees will lead to more network investment. Yet recent statements from leading telco figures directly contradict this, suggesting a limited appetite for further infrastructure spending. Without an auction, consumers risk being left with higher prices, no improvement to networks, and reduced revenue through spectrum discounts.
“Industry leaders have argued that reduced licence costs will fund investment – yet the head of the telco lobby has warned that investment in terrestrial networks is at an end. The contradiction is stark.”
“We are calling for telcos to put their money where their mouth is, and guarantee money saved on licence renewals will be used to fund better networks and price reductions.”
Auction mechanisms are the gold standard according to the OECD. ACCAN has issued the warning that lowering spectrum fees without legal undertaking could reduce Commonwealth revenues without delivering any public benefit. ACCAN looks forward to a solution to this critical issue that delivers better outcomes to consumers than the current approach proposed by ACMA.
