Strategies for Wireless Access Services

1. Strategies for Wireless Access Services A few thoughts & comments……. Stewart J Wallace 6 March, 2006

2. What is Wireless Access? Why is the industry/market in its current state? Current spectrum situation & emerging technologies Some suggestions & some concerns An underlying ‘theme’ & preliminary response(s) Some key messages to stimulate debate Wireless Access: ………Overview of my presentation:

3. Wireless Access: ………is multi-dimensional Fixed line substitution Mobility demand Supplementary wireless access * ‘Urban’ includes regional / rural cities & towns

4. Wireless Access: ……But, the deployment cost factor Capacity Demand Increasing capital cost Physical Distance

5. Metro/Urban Areas RURAL & REMOTE AREAS ?? Wireless Access: ……& varying commercial attraction Market Size But…there is already notable BWA spectrum allocations in regional areas ? 3.4 GHz 2.3 GHz Regional Areas Delivery Costs A natural rush toward the most profitable markets

6. Regional 3G WCDMA Mobile TV ?? RURAL & REMOTE Wireless Access Services Regional 802.16 WiMAX Metro/urban 3G WCDMA Metro 802.16 WiMAX ADSL/Cable Access Services Relatively easy to deploy ….so, what’s holding things back? 802.11 WiFi Wireless Access: ……& differing rollout timeframes Deployment Cost Deployment Time

7. Higher-profit metro & other urban markets that are easily deployed are attracting all the competitive players Other markets, with more complex deployment demands are largely neglected by competitive service providers – WHILE Significant aggregated spectrum [covering many regional/rural areas] still lies unused - but inaccessible to other willing & able players ! NEXT Wireless Access: …..gives obvious market outcomes: …3.4GHz band …2.3GHz band  Clamorous demands for further spectrum allocations !

8. Wireless Access: …..the radio spectrum situation Existing & Candidate Bands for Wireless Access (below 5GHz):

9. Fixed WiMAX – 802.16d – certified products late-2006 3G streaming data – HSDPA (2007) & HSUPA (2008) Mobile TV services – DVB-H, MBMS, MediaFlo – late-2007 Mobile WiMAX – 802.16e – certified products late-2007/8 Broadband satellite services – commercial availability 2008 High-altitude platform stations – commercial availability 2009 Super-3G/LTE and 4G – probably around 2010 Wireless Access: …..some emerging applications New (broadband) wireless applications already on the horizon…….. These new applications will encourage user demand that will subsequently further strain current spectrum allocations……..

10. Wireless Access: ….. Do we need rollout targets? Noting that large portions of current BWA allocations continue to lie unused – especially in regional/rural areas…….. To maximise community benefit & commercial opportunity, we believe there IS justification for: • Use-it-or-lose-it - especially for: • metro/urban deployment settings, where demand is high; • ‘low deployment complexity’ services in ALL regions; and • provided some other player can demonstrate a viable alternative usage plan. • along with: • Annual instalment payments – instead of a single up-front fee: • to facilitate early returns (ie. ‘lose-it’ scenario); • to avoid diversion of vital investment capital from the initial build-out task; & • so smaller players are not unduly disadvantaged.

11. Rural Urban Centre Regional Urban Centre Too far out: may deny access by rural communities Too far out: may delay access by regional communities Wireless Access: ….. Do appropriate boundaries exist? Low-population corridor?? – not always appropriate or equitable Regional Metro/urban Remote

12. Auctions should involve bidding on “notional lots”: to allow post-auction aggregation & avoid fragmentation of lots (eg. 1.8 GHz); to combat deliberate spoiling tactics by certain bidders; and to avoid excessive wastage through technical ‘guard’ bands. Spectrum lots must be of reasonable size: to reflect the commercial viability threshold of relevant technologies; and distinct from the (smaller) standard trading units (STUs) - that allow later trading & optimisation of spectrum holdings. Spectrum acquisitions might be incrementally released post-auction: requiring proof of efficient utilisation to justify each increment; in support of a ‘use-it-or-lose-it’ regime; balancing ‘certainty’ with ‘flexibility’; retaining a common expiry date encourages earliest take-up– else diminishing the revenue window; allowing delayed clearance of incumbents; and allowing mid-term re-allocations, if appropriate. Wireless Access: …… some other allocation issues:

13. Wireless Access: …… But – let us be quite frank… • Telstra will continue to vigorously & strenuously oppose any suggestion to apply entry rules or restrictive bidding limits, because: • the Australian community gains most benefit from operators with sufficient capitalisation to actually deploy and deliver new services in a timely manner; • efficient use of spectrum relies on sufficient capital, manpower & know-how; • radio spectrum is an extremely valuable national economic resource. In any case, existing provisions of the Trade Practices Act will automatically apply to all bidders at the completion of each spectrum auction to prevent anti-competitive outcomes – as per Productivity Commission recommendation. There is no rationale for any other “special” restrictions – and a “use-it-or-lose-it” provision would discourage any hoarding of spectrum.

14. The SPECTRUM LICENSING framework is very effective, but: More prudent spectrum allocation policies are needed – to avoid the mistakes of the past (eg. 3.4GHz BWA constraints/limits, boundary definitions, neglect of regional/rural/remote areas); There IS a place for USE-IT-OR-LOSE-IT rules – recognising the differing deployment cost & timeframe scenarios; Other allocation strategies also exist to foster more efficient allocation & usage of radio spectrum – refer previous slides; Readily availability & low-pricing incentives should apply to spectrum in low density rural/remote regions to encourage wider investment; and Conventional APPARATUS LICENSING continues to be viable for “highly shared” allocations, such as for fixed point-to-point radio links. Wireless Access: …… an underlying theme:

15. Current spectrum allocations enough? No – so much BWA spectrum is still lying idle but inaccessible Key technologies & timeframes? 802.16: backhaul – now; nomadic – 2006/7; & mobile – 2007/8 3G expansion (HSDPA) – from early-2007 Mobile-TV – late-2007 – 520~702 MHz probably preferred Amount of spectrum & number of competitors? varies by particular technology & market – is still under study. Candidate bands: 450~520 MHz in rural/remote areas 520~820 MHz in rural/remote areas + 4 channels in metro/urban 2010~2025 MHz in metro areas 2200~2290 MHz in metro/urban areas 2500~2690 MHz nationwide 3600~4200 MHz in metro/urban areas Private park? Unnecessary- we can already achieve this under current spectrum licensing regime! Wireless Access: …… some preliminary proposals: … mobile TV … broadcasting bands Already allocated to BWA: 2010~2025 MHz : regional/rural 2302~2400 MHz : nationwide 3425~3575 MHz : nationwide

16. Additional Wireless Access spectrum DOES need to be found……but: Minimum deployment targets should apply, to avoid ‘cherry picking’ and warehousing of critical spectrum resources – adopt use-it-or-lose-it provisions; AND Tighter boundaries should be defined around metro/regional urban markets, so outlying rural communities are not disadvantaged; but Low density rural/remote services may need longer deployment planning & payback periods. Wireless Access: ….. & some final messages:

17. Wireless Access: ……… ….. some initial thoughts in regard to Wireless Access spectrum strategy. Any questions? …spectrum table

18. 2 datacasting channels (7MHz) in each BSA should to be re-allocated ASAP for new Wireless Access usage – eg. to encourage innovative new broadcasting-type services over new platforms. Clearance of channels 68 & 69 should commence ASAP to further allow competitive Wireless Access Rural/remote areas should be universally freed up for Wireless Access purposes NEXT Wireless Access: ………current broadcasting bands Majority of terrestrial TV transmitters/translators/repeaters are located in populated metro/urban & regional areas – only a few local channels used in rural/remote areas.  BSB spectrum in rural/remote areas could be released for ‘co-ordinated’ use by Wireless Access services - benefiting from the longer propagation range achievable. …Minister’s statements • Two 7 MHz channels in all areas almost immediately! • Two additional 7 MHz channels in (say) 3 years; and • significant rural/remote spectrum almost immediately! …spectrum table Go to Map…

19. Mostly, just 1~2 local rebroadcast or translator channels – the rest is completely unused! Wireless Access: ………current broadcasting usage …go back

20. Wireless Access: ………current 1.8 GHz usage: Telstra devices: 4,536 Others: 3,683 …go back

21. Core 3G band segments: TDD services: 1900~1920 MHz FDD services: 1920~1980/2110~2170 MHz global MSS allocation: 1980~2010/2170~2200 MHz More than 2000 3G base stations are already deployed* nationwide in the 3G TDD band by 3GIS Pty Ltd; and Plans are underway to deploy* further 3G base stations in the FDD band over next several years. Optus & Vodafone are envisaged to have similar deployment* plans. Wireless Access: ………current & planned 2 GHz usage: * NOTE: Deployment includes a significant number of existing GSM/CDMA site upgrades, as opposed to new sites. …go back

22. Wireless Access:………current 3.4 GHz usage: • Total number of active 3.4 GHz P-MP base stations (as at 1 Feb 2006): • Telstra: 352 within 2 x 17.5 MHz spectrum sub-segments in regional areas (~2,000 customers). • Unwired: 428 within the overall band (3425~3575 MHz) mainly in Sydney & Melb metro areas. • Others: 493 within the overall band (3425~3575 MHz) in Metro & regional areas. ..3.4 GHz allocations …go back

23. Sydney – Newcastle (outer waters) Albury Bendigo Cairns Canberra Hobart Launceston Melbourne - East Melbourne - North Melbourne - West Perth Regional NSW Regional Qld Regional SA Regional Tas Regional VIC Regional WA Rockhampton Sydney - Metro Toowoomba Townsville Melbourne - Metro Sydney – Lithgow & Kiama Sydney Newcastle - West Melbourne – Nth-West Adelaide Brisbane 3425 ~ 3439 MHz Apparatus Licensed 3439 ~ 3442.5 MHz 50 MHz duplex spacing Lower Block 3442.5 ~ 3475 MHz 100 MHz duplex spacing 3475 ~ 3482 MHz Upper Block A 3482 ~ 3485.5 MHz 3485.5 ~ 3489 MHz Apparatus Licensed 3489 ~ 3492.5 MHz 3542.5 ~ 3546 MHz Upper Block B 3546 ~ 3575 MHz FreeCore Telstra Unavailable ActewAGL Amcom For sale HaleNET Unwired & associated Co’s Wireless Access: ………current 3.4 GHz BWA allocations: Current Spectrum Licence Allocations: …go back

24. Wireless Access:………current 2.3 GHz BWA allocations: • Unwired, Austar & associated firms: • ACT • Adelaide • Brisbane • Canberra • Gosford • Melbourne • Newcastle (metro & west) • Perth • Regional VIC (Geelong & south) • Queensland (SE and FNQ West) • NSW (southern) • Spencer Gulf (Nth Adelaide) • Sydney • Wollongong (Nth West) • Jacolyn, Kidillia, Wollongong Micro: • Broken Hill • Cairns • Gold Coast • Hobart • McKay & Rockhampton • Mt Isa • Newcastle (Nth & far West) • Port Douglas • Regional TAS • Regional VIC • Renmark & Loxton • Sanctuary Cove • Queensland (SE – modif.) • Spencer Gulf (modif.) • Townsville • Wollongong (Metro) • Others: • Alice Springs – Minorite • Bourke – Sawtell • Delamere – Dovevale • Mt Gambier – Dovevale • Northern NSW – Illona …go back

25. Mobile-TV is clearly on the horizon as a future service – early commercial activities are already evident in a number of countries, including: Korea, Italy & US – as well as Australia’s own recent technical trial. Senator Coonan has already articulated positive Govt support: “…consumers [will] be better served by media policy that encourages new content and innovative services by opening up of opportunities for television-like services over other platforms…” and “…the use of the datacasting spectrum provides the opportunity for some interesting new services for consumers and, in my view, is a key element of any media reform package…” So, given the propagation & coverage advantages, the broadcasting services bands (including the datacasting channels) should be opened up sooner rather than later. NEXT Wireless Access:………indicative trends in Mobile-TV: …go back

26. Wireless Access: ………current broadcasting bands • 2 datacasting channels (7MHz) in each BSA should to be re-allocated ASAP for new Wireless Access usage • Clearance of channels 68 & 69 should commence ASAP to further allow competitive Wireless Access • Rural/remote areas should be universally freed up for Wireless Access purposes Majority of terrestrial TV transmitters/translators/repeaters are located in populated metro/urban & regional areas – only a few local channels used in rural/remote areas.  BSB spectrum in rural/remote areas could be released for ‘co-ordinated’ use by Wireless Access services - benefiting from the longer propagation range achievable. • Two 7 MHz channels in all areas almost immediately! • Two additional 7 MHz channels in (say) 3 years; and • significant rural/remote spectrum almost immediately! …prelim answers Go to Map…

27. Wireless Access: ………indicative Govt support: On several recent occasions, Senator Coonan has articulated her thinking in capacity as the Government’s Minister for Communications: • “…consumers [will] be better served by media policy that encourages new content and innovative services by opening up of opportunities for television-like services over other platforms…” and • “…the use of the datacasting spectrum provides the opportunity for some interesting new services for consumers and, in my view, is a key element of any media reform package…” and • “…I think people should have choice. That’s why I want to get many more innovative services available on the additional spectrum that we will have available as from 2007. I have in mind that that wouldn’t be open to the free-to-air players simply because I think there needs to be new voices. So I think that the whole plan will mean that people have a much richer and more diverse media experience than is available, by having people, at least having media providers, trapped in outmoded rules in an old analogue world.” (ABC Radio National, Thurs 2/03/2006) …broadcasting trends

28. Spectrum Licences are never truly ‘technology-neutral’: because of the overriding ITU-R spectrum allocation table; and because Govt usually has some competitive service objective. Core technical conditions are key to flexible usage: but, development requires extensive technical knowledge; and especially to equally accommodate differing technologies. Understanding guard-space concepts is essential: spectral guard-band AND geographic guard-space; choosing an appropriate propagation model is important; a ‘notional receiver’ definition is also essential; and need to consider both in-band & out-of-band effects. Poor Rx Sel Rx Sel Tx Poor Tx Wireless Access:………technology neutrality, etc:  Essential to specify ‘notional’ Rx performance as well as Tx OOB & spurious limits. …go back