MBIE explains u-turn on 5G spectrum auction, move to allocation
- 23 June, 2020 16:15
Chris Bunny (MBIE)
Robust questioning in a parliamentary committee has teased out the reasons behind the cancellation of NZ's planned 5G spectrum auction.
Earlier this month, opposition spokesperson for broadcasting, communications, digital media Melissa Lee asked why MBIE cancelled the auction of 3.5GHz rights during the COVID-19 lockdown, especially since the move lowered Crown revenue "substantially".
"Why did you take this step, and how will this decision impact on the long-term spectrum rights or the auction potential auction - which has been postponed?" Lee asked at an economic development, science and innovation committee hearing.
Chris Bunny, deputy chief executive, building, resources and markets at MBIE, said it was originally expected that mobile operators would get spectrum availability by working with existing spectrum holders.
As reported by Reseller News, Vodafone achieved this last year and embarked on an aggressive roll-out while Spark and 2degrees remained restricted.
"That proved to be quite challenging, and the clock is ticking on 5G," Bunny said. "You know, it really is quite an exciting proposition for New Zealand and more generally.
"So instead, the Crown made a decision to make available some of the unused spectrum to get kind of the early development and implementation going."
There were a lot of issues associated with spectrum, Bunny added, including the need to traverse and work with Māori partners.
That process was "well under way", he added.
"Then there’s the uptake in the attitude of the companies themselves, and, post-COVID, that remains to be seen, what kind of space they’re in going forward," he said.
Lee said she was trying to understand what the restriction or challenge was on running an auction, as it could have been run electronically.
"The challenge was we were diverting resources to all the other activities that we maintained, particularly through that early period," Bunny said.
MBIE had people that would normally work on spectrum allocations and auctions working on projects such as increasing rural connectivity and business continuity planning for the telecommunications sector.
That in turn created a drain on resources.
Fibre and the rural broadband connectivity were among the unsung heroes of the lockdown, Bunny said. MBIE made a decision to deploy staff to make sure that those things continued to operate "rather than striking out on things that could wait a few weeks".
Lee asked how many staff were actually deployed considering the fact that MBIE doesn’t actually physically deploy those networks.
"How many officials were involved, and what did they actually do?" she asked.
Bunny said the branch that was involved in telecommunications and 5G and spectrum had about 45 people overall, split between the commerce portfolio and the telecommunications portfolio about 50:50.
"So there’s about 20-odd staff that work on telecommunications issues," he said. "Of those staff, probably seven or eight of them were working pretty much full time on maintaining the network and increasing rural connectivity."
Others went to other functions within MBIE, such as answering elected officials’ emails, working with essential services’ emails and manning phones.
"On top of that - and something that I’m also pretty proud of - MBIE put about 500 people into other government agencies, supporting their work."
Lee said she understood that, but MBIE's people don’t physically do work on telecommunications networks.
"It’s the telcos who were actually doing all the work, or Chorus who actually do this work," she said. "So what did your seven staff out of 40 do that you say you actually deployed to deal with this connectivity?"
Bunny said they worked on coordinating business continuity with the telcos and to understand their situation.
"There were exemptions made to enable them to do critical repairs," he said. "Those need to be processed through sometimes the immigration system but otherwise through the Ministry of Health and making sure that we complied with the orders that were in place."
Increased investment was also provided to bolster rural connectivity.
"So minister [Shane] Jones and minister [Kris] Faafoi worked on that. As I know you’re aware, there is something in between ministers saying 'Let’s do it', and spending money, and the telcos going about it and
building those assets or improving those assets.
"There is a contractual specification element that sits in between that is the work of MBIE."