Allocating 5G spectrum - aim to do it better than the Australians

Last week, I was asked to appear on a panel at a session of the Spectrum Policy Forum in London. A range of very smart people at it discussed the economics of valuing spectrum, to assess how best to allocate it. Being from New Zealand, I provided a few thoughts on Antipodean approaches to this. Although I have lots of respect for Australians, they're actually really good at showing how not to do things. How not to allocate spectrum is but one example.

Compared to the UK, the smaller economy and population of my home country New Zealand mean it has less need for rigour in valuing spectrum. Put simply, a country with less than 5 million people finds it very hard to depart from international norms for spectrum use. It has less need say, to spend time valuing the externalities stemming from different use cases. However, Australia does provide evidence of why this should be important to larger countries like the UK.

Australia will always be New Zealand's big brother - there are lots of Australians I have huge respect for. Yet, the country is remarkably good at showing how not to do things. How not to cheat at cricket is merely a recent example. Should we be surprised that Australia provides an example of how not to allocate spectrum?

Ry Crozier explains in this recent article that the nationalised broadband provider, NBN, was allocated 3.4-3.5 GHz spectrum in 2014 at a "market rate". However, this band was subsequently allocated to 5G by international agreement. Auctions in 2017 showed it was valued at 16-64x what NBN paid for it. Market participants called for the spectrum to be reauctioned or for NBN to pay a fairer market price. Whatever happens, this sort of uncertainty is very problematic for spectrum uses. The UK plainly needs to avoid similar issues happening after it's allocated spectrum.

I don't doubt that there was and remains a lot of complexity behind the NBN and what to do about it, way more complexity than I've alluded to here. Much of that complexity stems from having the government involved in a rapidly developing industry. It seems this is another thing the Australians want to show: how not to have government involved in a technology business.

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