Digital Dividend Discussion Submission

In August of 2011, New Zealand’s Ministry of Economic Development Radio Spectrum Management group published a discussion paper entitled “Digital Dividend – Opportunities for New Zealand”. The Digital Dividend is defined as the part of the radiofrequency spectrum that is able to be freed up following the switch from analogue to digital television, however this discussion paper only considers the “700MHz band” of spectrum and its most likely repurpose for use by cellular telephone and broadband providers. I discuss the Digital Dividend in some detail in an earlier blog post.

This discussion document is part of a consultation process kicked off by the Ministry in April 2011, with an Auckland meeting of industry participants held under Chatham House Rule. A public workshop was held in September to discuss the paper, and written responses were due for submission on Friday the 7th of October. These submissions, including the one below, will be published by the MED, as the initial positions of various industry participants. Comments on submissions will then be sought in a cross-submissions period, with responses due the 9th of November.

Telco2 responded to the document as follows:

1. What is the best use of the 700 MHz band in New Zealand? Do you agree that it should be allocated in a mode suited to FDD technologies?
   1. The best use of the 700 MHz band in New Zealand is mobile broadband
   2. FDD is the preference of the most likely bidders and its use should not be excluded.
2. Could or should both FDD and TDD modes be accommodated?
   1. Both FDD and TDD modes can be accommodated, and should be. Mobile broadband use patterns show that it is primarily an asymmetric activity, requiring more tower transmit bandwidth than user equipment transmit bandwidth. With technologies on track for inclusion in LTE-Advanced standards allowing channel bonding of non-contiguous, non-regular sized carriers, and even carriers in different bands, the most sustainable long-term plan for the 700MHz is an accommodation of both technologies.
3. Do you agree that New Zealand should adopt the APT band plan?
   1. The ability to harmonize with other regional telecommunications providers is of utmost importance to New Zealand providers. No New Zealand plan should exclude providers from adopting standard APT channels – i.e. FDD channels separating TX and RX by 55MHz, in the ranges from 703MHz to 748MHz, and 758 to 803MHz. That said, no plan should compel spectrum owners to follow it.
4. What alternative options should government consider if international support for the APT band plan does not emerge?
   1. If the auction allows for use of the APT band plan while not compelling its use, the government will not need to take action if international support does not emerge.
5. Should the 700 MHz band be allocated in 5 MHz blocks together with natural pairs, i.e. 2×5 MHz?
   1. 5MHz blocks are a hold-over from WCDMA technologies. The most likely use of the 700MHz band is Long Term Evolution, which has far more flexibility in carrier sizes and carrier aggregation. 1.25MHz blocks are a more appropriate size.
   2. Blocks should be sold in natural pairs. Users requiring only TDD spectrum can trade or sell unused blocks to other providers.
6. Is there an alternative use for the guard bands that should be considered?
   1. The IEEE recently published 802.22, a standard for a cognitive radio based MAC and air interface for use by license-exempt devices in white space spectrum. Guard bands and gaps qualify as white space. I believe policies should be developed allowing such compliant white space devices to operate in 700MHz guard bands and in other guard bands throughout the VHF and UHF spectrum.
7. Should a reservation for PPDR broadband use be made in the 700 MHz band? Why? Why not?
   1. No special reservation should be made for PPDR broadband use in the 700MHz band.
   2. With 1.25MHz carriers as suggested above, a number of operators can coexist in the 700MHz space. Should emergency services require some of this spectrum, they should be encouraged to bid for it.
8. Should provision be made for a new entrant at some point in the future? If yes, how should this be done? If no, why not?
   1. No provisions for a new entrant should be made.
   2. Faster utilization of all spectrum will lead to greater long term economic benefits.
9. Should spectrum acquisition caps be applied in the 700 MHz allocation process?
   1. Yes, spectrum caps should be applied to the 700MHz process.
10. If yes, what level of cap should be applied? Should caps be specific to 700 MHz or wider?
    1. A 40MHz cap should be applied to the 700MHz band, with subcaps such that no provider can acquire more than 20MHz spectrum in either the low or high band. For example, a single provider should not be allowed through initial bidding or secondary market transactions to acquire 10MHz in the 703-748 block and 30MHz in the 758-803 block.
    2. Should the government wish to equalize the competitive playing field of the three current cellular providers, it could apply a cap on overall sub-1GHz spectrum holdings.
11. Should the Ministry endeavor to ensure that at least one party can access 2×20 MHz in the 700 MHz band? What impact would this have on competition?
    1. The ministry should endeavor to flexibility in carrier sizes and caps as required to implement the governments policies. I strongly disagree with the ministry’s supposition in 7.4.2 of the discussion paper that four cap options based on increments of 5MHz is a valid approach. It fails to account for the technologies that LTE-Advanced brings to the market and the standard practice of three-way sectorization of cellular towers.
12. Should implementation requirements be placed on digital dividend spectrum? Why / why not?
    1. Yes, implementation requirements should be placed on the spectrum.
    2. Spectrum is a common resource, held by the people of New Zealand. Its value to the economy when in use is far greater than the amount that will be recovered at auction.
13. What form should any implementation requirements take?
    1. Coverage targets for population should be implemented, with penalties imposed to providers who fail to meet targets. Given the propagation of 700MHz radio, a target of 85% of population within five years of acquisition should be met, and 97% of population within eight years.
14. How should the 700 MHz band be allocated? Why?
    1. A contestable allocation is the best methodology.
    2. Direct allocations as with the 3.5GHz Crown band and the 2.5GHz Managed Park Spectrum have not resulted in good use of the spectrum.
15. Do you agree with the Ministry’s proposed timeframe? Why? Why not?
    1. I agree with the Ministry’s timeframe, with the caveat that if by mid-2012 no other country has adopted the APT FDD band plan with a specification of 5MHz blocks, the Ministry should delay the auction design until such time as either Australia, China, or India has made a decision.