Despite ruling out including rollout obligations in spectrum licences, ACMA sees potential benefits of a secondary licensing framework for rural competition and consumer choice
ACMA is considering alternative spectrum licensing conditions as part of a wider review of the future use of the country’s spectrum resources
On 6 March 2025, the Australian Communications and Media Authority (ACMA) published a report outlining its views on the potential benefits of alternative spectrum licensing conditions for mobile policy outcomes such as coverage and competition. Michelle Rowland MP (Minister for Communications) requested the report, asking the regulator to consider the following conditions for possible inclusion in spectrum licences:
Rollout obligations, under which licensees must meet certain requirements in their deployment of new infrastructure and in the operations of their services, with failure to comply leading to sanctions such as fines, civil penalties or even the loss of licensed spectrum;
Use-it-or-lose-it (UIOLI) conditions, which require licensees to meet a specified level of spectrum use and are designed to improve the efficiency of spectrum allocation. Failure to comply can lead to a loss of some or all of a licensee’s spectrum; and
Use-it-or-share-it (UIOSI) conditions, which require licensees to share access to their unused spectrum with other secondary users. While failure to comply can result in sanctions, it is unlikely that licensees would lose any of their spectrum as they could with UIOLI conditions.
ACMA’s report and its advice to the Minister have been developed in the context of the expiring spectrum licences (ESL) process and the Government’s associated policy objectives. ACMA is separately consulting on its draft five-year spectrum outlook (FYSO) for 2025-2030, which indicates that the regulator has now reached the halfway point in its four-stage ESL process. As the report states, spectrum licences across a range of bands (for which 20-year licences were issued to major operators) are set to expire between 2028 and 2032. ACMA is responsible for deciding whether to renew these licences and for considering the most appropriate licensing arrangements that will serve the long-term public interest.
ACMA argues rollout obligations would be ineffective at delivering wider mobile broadband coverage
Despite other countries, such as France, New Zealand and the UK, utilising different kinds of rollout obligations, ACMA is clear that it does not believe that these obligations would be effective for improving broadband coverage in Australia when included in spectrum licensing agreements. The report explains that although some international approaches utilise rollout obligations, these use cases would be mostly inapplicable in a domestic context for reasons such as the country’s unique landmass, population densities and demographics. ACMA argues that population coverage in Australia is already broadly consistent with the targets set by countries that are using rollout obligations, reinforcing its position that these are not necessary in Australia. The regulator also recognises that if it was to impose rollout obligations, existing legislative frameworks would hamper its ability to address non-compliance in a way that leads to meaningful and effective outcomes. ACMA instead promotes the use of direct grants and funding programmes as these can be contractually agreed upon and are more likely to be practical to design and enforce.
Incumbent and prospective licensees have differing views on the potential benefits of UIOLI and UIOSI conditions
Similarly, ACMA also cautions against UIOLI and UIOSI conditions due to how they might disrupt some of the existing benefits of Australia’s national licensing framework for sub-1GHz spectrum. The regulator explains that the current national framework facilitates long-term investment confidence, provides benefits for interference management and promotes innovation through the flexible use of spectrum. Unsurprisingly, incumbent licensees were mostly opposed to the introduction of any new, alternative licensing frameworks, arguing that the current regime already achieves efficient spectrum use, aligning with ACMA’s views. Incumbents instead proposed that broader coverage could be achieved through the Government’s Mobile Black Spot Program – an initiative that invests in mobile infrastructure to improve coverage in regional and remote areas that are often impacted by, or at-risk of, natural disasters – as well as other regional co-investment programmes. Prospective alternate licensees were more open to the idea of new licence conditions, such as UIOLI or UIOSI, which they considered could provide better opportunities for them to gain access to spectrum.
The report’s proposal for a place-based secondary licensing framework has stakeholder support
ACMA has proposed the use of a secondary licensing framework as an alternative to current regulations, which both the Government and consumer groups have supported. One of the key differences between such a framework and the use of UIOSI conditions is that primary spectrum licence holders would not be obliged by regulation to share their unused spectrum. A secondary licensing framework would be based on issuing place-based apparatus licences, which ACMA argues would promote competition and consumer choice in regional, rural and remote areas without compromising the primary licensee's interests. In addition, this framework could support smaller market participants in delivering new services to customers in more rural areas, potentially addressing disparities in urban and rural coverage levels. ACMA also considers that these smaller place-based networks could support the deployment of private networks for agricultural or mining applications.
