NZ Govt Radio Spectrum Auction Delayed To Jan 8

date: 21st December 2000

The rules of New Zealand's auction of so-called second and third generation radio spectrum have been modified, with Commerce Minister Paul Swain saying the government wants to speed up the auction process, and the changes are designed to do this.

The rules of the auction have already been changed several times, and the government and others have been frustrated as some bidders have used tactics such as withdrawal and then reentry into the auctions to slow the overall process down.

The government is auctioning management rights and licenses for blocks of second and third generation radio frequencies in the 2 gigahertz spectrum.

The frequencies, third generation in particular, are capable of supporting high bandwidth wireless communications.

Under the latest changes, announced Thursday, is the news the auction won't restart until 9 a.m. local time Jan. 8, when the new rules become effective.

The auction was suspended Dec. 8 to allow for the government's response to a Ministerial Inquiry into Telecommunications. The government released its policy Wednesday.

The new rules include that the auction will be divided into two separate parts - Part I for management rights and Part II for license rights.

Swain said the government has consulted with the telecommunications industry, and decided on rule changes designed to bring the auction to a close.

"I think if you talk to the players, they will agree to you they basically want the (auction) to end anyway," Swain said.

0510GMT

New Rule Details

However, Telecom has said the longer the government's current auction of radio frequency spectrum lasts, the better Telecom and its rival, Vodafone New Zealand Ltd., will be placed compared to other operators wanting to start mobile phone networks.

The company says as operators of mobile telephone networks, Telecom and Vodafone have a growing base of customers and this gives them an advantage in the auction process.

Kevin Kelly, a representative of the auction management process, Thursday said the auction will conclude in either Parts I and II after the completion of one "clear" bidding round. A clear round is where bids aren't changed.

"Until there is a clear round in one part of the auction, bidding will continue for both management rights and licenses," he said.

"The ministry recognizes that there is an interrelationship between 2G management rights and 3G management rights where 2G spectrum may provide a migration path to 3G services. For this reason, the Ministry has decided to keep all management rights together," he said.

Kelly said there is also a limit on re-bidding following withdrawals for management rights by any bidder.

Once a bidder has withdrawn bids in five rounds in Part I, or the Management Rights section of the auction, any subsequent bid shall be deemed to be invalid.

Then the bidder shall be disqualified from submitting new bids in any part of the auction, he said.

Valid bids made before that time will remain valid and shall continue to apply until higher bids are received, he added.

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