Radiocommunications (Spectrum Access Charges – 3.4 GHz Band) Determination 2021

This legislative instrument fixes the dollar amount and payment timing of the spectrum access charge payable by NBN Co Limited for two spectrum licences in the 3.4 GHz band issued under the Radiocommunications Act 1992. The charges are set under subsection 294(1) of that Act and are made subject to the Radiocommunications (Spectrum Access Charges - 3.4 GHz Band) Direction 2020, which is a ministerial direction that constrains the ACMA's discretion in determining the charges. The instrument creates two separate charging regimes: one for an inner‑metropolitan spectrum licence and one for an outer‑metropolitan and regional spectrum licence, each defined by reference to the Radiocommunications (3.4 GHz Band) Spectrum Conversion Plan 2021.

The determinative mechanical operation is simple but carries significant financial consequences. For the inner‑metropolitan licence, the charge is $226,441,720 but is payable only if the licence is still in force at the start of the first anniversary of its commencement. If the licence has ceased (for example by surrender, revocation, or expiry) before that date, the charge is nil. The payment date is the first anniversary itself, not the date of issue. This creates a conditional liability that does not crystallise until the anniversary date.

For the outer‑metropolitan and regional licence, the charge is $57,146,840. The default payment is a single lump sum one week after the offer date (the day specified in paragraph 56(2)(c) of the Act, which is the date on which the ACMA offers the licence). However, NBN Co may elect to pay in ten annual instalments of $5,714,684 each. The first instalment is due one week after the offer date, and subsequent instalments fall due on each anniversary of the licence’s commencement until the total is paid. The instrument’s explanatory note confirms that the licence will cease by 13 December 2030 under the conversion plan, so the last instalment will be in 2030.

The instrument provides no discretion to the ACMA to vary the charge amounts or payment terms; it is a fixed determination. It also contains a sunset provision: the instrument is repealed automatically at the end of 31 December 2030, after which it will no longer have any prospective operation. However, the repeal does not affect any charge that has already accrued or become payable before that date. The instrument is a legislative instrument registered on the Federal Register of Legislation and commenced the day after registration.

The central concept is the spectrum access charge, which is defined in the Radiocommunications Act 1992 but not in this instrument. Under section 294 of the Act, the ACMA may determine the charge payable for the issue of a spectrum licence, subject to any ministerial direction. The charge is a price paid by the licensee for the right to use a defined slice of the radiofrequency spectrum for a specified period, on an exclusive or shared basis depending on the licence conditions. In this case, the charge is set specifically for NBN Co, not by auction or market‑based allocation, which distinguishes it from the usual competitive allocation processes for commercial spectrum licences.

The conversion plan is the Radiocommunications (3.4 GHz Band) Spectrum Conversion Plan 2021, as in force on its commencement date. That plan converts existing apparatus licences in the 3.4 GHz band (historically used for fixed‑link services) into spectrum licences suitable for mobile broadband, particularly for NBN Co’s fixed‑wireless network. The instrument refers to two licence types derived from that plan: the inner‑metropolitan spectrum licence (subsection 16(1) of the conversion plan) and the outer‑metropolitan and regional spectrum licence (subsection 16(2) of the conversion plan). The precise geographic boundaries of these licence areas are not stated in this instrument and must be ascertained from the conversion plan itself.

The election mechanism is a key concept for the outer‑metropolitan and regional licence. It allows NBN Co to choose between a single lump‑sum payment and a ten‑year instalment plan. The election must be made in writing to the ACMA on or before the offer date (the day in paragraph 56(2)(c) of the Act). It cannot be revoked or amended after that date. The acceptance form prescribed in the conversion plan may be used to give the notice, but the instrument does not mandate that specific form - it only says NBN Co “may” use it. The election is a binary choice; there is no option to pay a different number of instalments or to accelerate payment.

The instrument introduces a contingent charge for the inner‑metropolitan licence. The amount is stated as $226,441,720, but the liability is contingent on the licence remaining in force until the first anniversary. This is an unusual structure. If the licence is cancelled, surrendered, or expires before that date, the charge is nil. The instrument does not explain the policy rationale for this conditionality, but it creates a temporal risk for the Commonwealth: NBN Co could avoid the charge by allowing the licence to lapse early. Conversely, NBN Co bears the risk of having to pay the full amount if it keeps the licence for at least one year.

The instrument directly affects only one entity: NBN Co Limited (ACN 136 533 741). It imposes obligations and grants an election right solely to NBN Co. No other telecommunications carriers, spectrum licensees, or members of the public have any duties or rights under this determination. The ACMA is the administering body but has no discretion; it must issue the licences in accordance with the conversion plan and collect the charges as specified. The ACMA’s role is ministerial: it receives the election notice, issues the licences, and processes payments.

Indirectly, the instrument affects the broader telecommunications market. NBN Co uses the 3.4 GHz band to provide fixed‑wireless broadband services, mainly in outer‑metropolitan and regional areas. The spectrum access charge is a cost of providing those services. If the charge is high, it may increase NBN Co’s wholesale prices or reduce its return on investment, which could affect retail service providers and end‑users. Conversely, if the charge is below market value (compared to what a commercial operator might pay at auction), it represents a subsidy to NBN Co, potentially distorting competition with other fixed‑wireless or mobile broadband providers that have to pay market prices for spectrum.

The conditional nature of the inner‑metropolitan charge also affects the Commonwealth budget. If NBN Co surrenders that licence before the first anniversary, the Commonwealth foregoes $226 million in revenue. That could be a deliberate policy design (for example, to allow NBN Co to test the market without immediate cost) or an unintended fiscal risk.

The instrument affects rival telecommunications companies indirectly. For example, TPG Telecom, Optus, and Telstra all hold spectrum licences in adjacent bands, often acquired through competitive auctions. The 3.4 GHz band is also used by some for fixed‑wireless and mobile services. NBN Co’s below‑market or concessionary access charge could give it a cost advantage in providing broadband services, especially in regional areas where it holds the outer‑metropolitan and regional licence. This may reduce incentives for private investment in alternative infrastructure. However, the instrument itself does not set the terms of the conversion plan or the licence conditions - it only sets the charge - so the competitive effects depend on the broader regulatory framework.

The instrument does not affect the general public directly, except through the prices and quality of NBN fixed‑wireless services. Taxpayers are indirectly affected because NBN Co is wholly owned by the Commonwealth. A lower spectrum charge reduces NBN Co’s costs, which may reduce its need for government equity injections or debt guarantees, but also reduces spectrum‑related revenue to the Consolidated Revenue Fund.

The instrument imposes only one duty: the obligation to pay the spectrum access charge if the licence is issued and, in the case of the inner‑metropolitan licence, remains in force at the first anniversary. For the outer‑metropolitan and regional licence, the duty to pay arises upon issue, either as a lump sum or in instalments depending on the election. There are no duties on the ACMA beyond the implicit duty to issue the licences and collect the charges in accordance with the determination. The ACMA has no power to waive, reduce, or vary the charges - they are fixed by this instrument subject only to the ministerial direction.

The main right granted to NBN Co is the election right under section 9 for the outer‑metropolitan and regional licence. NBN Co may choose to pay in ten annual instalments rather than a single lump sum. This election must be exercised in writing to the ACMA on or before the offer date. The election is not revocable after that date. NBN Co also has the implied right to decide whether to accept the licence offers, which is determined under the conversion plan and the Act, not this instrument. The instrument does not require NBN Co to accept any licence - it only sets the charge if the licence is issued.

There is a notable absence of any right to a refund or adjustment. If NBN Co pays the inner‑metropolitan charge on the first anniversary and the licence is later revoked before its expiry, the instrument does not provide for a pro‑rata refund. Similarly, if NBN Co elects instalments and then decides to prepay the remaining balance, the instrument is silent. The payment obligations are fixed. The instrument also does not provide for interest on late payments or for the consequences of non‑payment; those matters are presumably dealt with by the Act or the licence conditions.

NBN Co may use the acceptance form for the election notice, but it is not obliged to. The instrument says “may use”, so any written notice that clearly indicates the election and is given before the deadline should be effective.

The instrument creates no duties or rights for any other party. Competitors cannot challenge the charge level under this instrument - any challenge would have to be based on the Act or the ministerial direction. There is also no obligation for the ACMA to publish the election or the payment status; the instrument is silent on transparency.

This instrument contains no penalty provisions. It does not create any offences, civil penalties, or infringement notices. It does not specify consequences for late payment or non‑payment of the spectrum access charge. Enforcement is left to the underlying Radiocommunications Act 1992 and the terms of the spectrum licence itself. For example, under the Act, the ACMA may suspend or cancel a spectrum licence for non‑payment of charges (see section 81 of the Act, though this is not explicitly referenced in the instrument). The Act also provides for recovery of unpaid charges as debts due to the Commonwealth.

The only enforcement‑related aspect is the conditional nature of the inner‑metropolitan charge. If the licence is not in force at the first anniversary, the charge is nil - this is effectively forgiveness of the charge rather than a penalty. There is no penalty for surrendering the licence early; in fact, it avoids the charge entirely. Conversely, if NBN Co keeps the licence, it must pay the full $226 million. There is no graduated scale or reduction if the licence is held for only part of the year.

For the outer‑metropolitan and regional licence, if NBN Co elects instalments and fails to pay an instalment on an anniversary, the instrument does not specify that the remaining balance becomes immediately due. The general law of debt recovery and the Act would apply, but there is no acceleration clause in this instrument. This is a potentially significant loophole: if NBN Co defaults on an instalment, the ACMA would need to recover each overdue instalment separately, and the instalment plan would continue for the remaining term. However, the licence conditions or the Act might allow suspension or revocation for non‑payment, which would effectively accelerate the economic consequences.

The instrument is silent on the ACMA’s powers to demand security, impose late payment interest, or audit compliance. None of those powers are granted here. Any such powers must be found elsewhere in the Act or the licence. Practitioners should therefore examine the spectrum licence conditions and the Act to understand the full enforcement framework.

The instrument is a legislative determination, not a contract. It does not create privity between NBN Co and the ACMA; the obligations arise by force of the statute and the instrument. This means that remedies for non‑payment are public law remedies (debt recovery, suspension, cancellation) rather than contractual remedies.

The instrument is made under subsection 294(1) of the Radiocommunications Act 1992 and is subject to the Radiocommunications (Spectrum Access Charges - 3.4 GHz Band) Direction 2020. That ministerial direction may prescribe principles or caps that the ACMA must follow; the instrument must be consistent with that direction. The instrument does not reproduce the direction, so practitioners must consult it separately.

The instrument incorporates by reference the Radiocommunications (3.4 GHz Band) Spectrum Conversion Plan 2021 for the definitions of inner‑metropolitan and outer‑metropolitan and regional licences. That conversion plan also governs the conversion of existing apparatus licences to spectrum licences, the licence areas, and the duration (not later than 13 December 2030). The instrument references the conversion plan as in force on the day it commenced - any later amendments to the conversion plan would not affect the meaning of the licence types unless the instrument itself is amended. However, section 6 of the instrument provides that references to other legislative instruments are to those instruments as in force from time to time. The definition of “conversion plan” in section 5 is an exception: it specifically states “as in force on the day it commenced”, freezing the definition to the original version. This is a careful drafting choice to avoid later changes to the conversion plan altering the scope of the charges.

The instrument interacts with section 56 of the Act, which deals with the offer of spectrum licences. Paragraph 56(2)(c) specifies the day on which an offer is made. This day is the trigger for the payment due dates (one week after that day) and for the election deadline. The instrument does not specify what happens if the offer is withdrawn or if the licence is not issued - the charge is only payable if the licence is issued.

The instrument also references section 314A of the Act in a note, which deals with the delegation of powers by the ACMA. This is standard for legislative instruments. The note indicates that the ACMA may delegate its functions under this instrument.

There is no direct interaction with the Competition and Consumer Act 2010, the Telecommunications Act 1997, or the National Broadband Network Companies Act 2011 in the text of the instrument itself. However, those Acts are relevant to NBN Co’s operations and may affect how the spectrum is used. The instrument does not address access pricing, wholesale‑service obligations, or NBN Co’s regulatory framework. It is solely a charge‑setting instrument.

This instrument does not record any amendment history because it has not been amended. It is a simple determination with a single version as registered. It was made in 2021 and has been in force since the day after registration. The instrument text contains no amendment clauses, no schedules of amendments, and no references to previous versions.

Because the instrument is repealed on 31 December 2030, any subsequent amendments could only be made before that date. The power to amend would lie with the ACMA under the same subsection 294(1) of the Act, subject to the ministerial direction. If the minister issues a new direction, the ACMA would be required to amend the determination accordingly. However, no such amendments have been recorded in the instrument itself.

Practitioners should check the Federal Register of Legislation for any later variations, as this instrument may have been amended after its initial registration. The instrument’s section 6 references to other instruments being “as in force from time to time” means that any changes to the conversion plan (except for the definition frozen at commencement) would automatically apply. But that is not an amendment to this instrument - it is a dynamic incorporation.

The instrument contains a self‑repeal clause (section 4), which is unusual for a legislative instrument but not unprecedented. It ensures that the determination does not continue in force indefinitely after the licences have expired. The repeal is automatic and does not require any further legislative action.

No transitional provisions or savings are included. The instrument is not amended or repealed by any later instrument referenced in the text. The absence of amendment history means that the charge amounts have remained constant since 2021. There is no indexation, no CPI adjustment, and no provision for review. The $226 million and $57 million figures are fixed in nominal terms for the life of the licences.

The instrument itself does not mention any litigation. No cases are cited in the text, and there are no references to legal disputes. Because this is a legislative instrument rather than a court judgment, litigation history is not part of the instrument. However, we can note that challenges to spectrum access charges under the Radiocommunications Act are possible on administrative law grounds - for example, if the determination exceeded the power under section 294, if it was inconsistent with the ministerial direction, or if there was a failure to take into account relevant considerations. No such challenges are reported in the instrument.

Litigation concerning NBN Co’s spectrum holdings in the 3.4 GHz band may exist in other contexts, such as appeals against the conversion plan or disputes with other spectrum users. But this instrument has not been the subject of any known judicial consideration. The instrument is narrow in scope and applies only to a single licensee, which reduces the likelihood of litigation. Competitors might have standing to seek judicial review if they can show that the charge is so low as to constitute unlawful state aid or a breach of the Australian Government’s competitive neutrality principles, but that would be a challenge to the decision to set the charge at that level, not to the instrument itself.

Practitioners should monitor the Federal Court and the Administrative Appeals Tribunal for any applications under the Act, particularly relating to the interpretation of “inner‑metropolitan” or “outer‑metropolitan and regional” in the conversion plan, or to the validity of the election mechanism. As of the date of this instrument, no such cases are recorded in the instrument.

The most significant trap is the conditional nature of the inner‑metropolitan charge. Section 7(1)(a) provides that the charge is nil if the licence “is no longer in force at the start of the first anniversary of the day it came into force”. This means that if the licence is surrendered, cancelled, or expires before that anniversary, no charge is payable. NBN Co could potentially avoid the $226 million liability by ensuring the licence is short‑lived. However, if the licence is in force at the start of the first anniversary (even if only for a moment), the full $226 million becomes payable. The timing is critical: the charge is based on the licence’s status at the precise start of the anniversary day, not at any later time. If the licence ceases at 00:01 on that day, is it still in force at the start? The instrument does not define “start of the first anniversary”. The general law would treat the anniversary as beginning at midnight, so the licence must be in force at that instant. A practitioner would need to review the licence conditions for any provisions about the exact time of commencement and expiry.

Another trap is the election deadline under section 9. NBN Co must give notice to the ACMA on or before the day in paragraph 56(2)(c) of the Act. That day is the date on which the ACMA offers the licence. If NBN Co misses that deadline, it cannot elect instalments and must pay the full $57 million lump sum one week later. The instrument explicitly states that the election cannot be made after that day. There is no extension or grace period. The use of the acceptance form is optional but prudent.

The instalment payments under section 8(3) are fixed amounts: exactly $5,714,684 each. There is no provision for rounding, and the total of ten instalments equals $57,146,840 as per the lump sum. But note that the first instalment is due one week after the offer date, and subsequent instalments on each anniversary. If the licence is issued in 2021 and ceases in 2030, there will be nine anniversary payments (years 2 through 10) plus the initial payment, making ten total. The note confirms this. However, if the licence is issued later than 2021 (e.g., in 2022), the last instalment might fall due after the licence has expired, because the licence must cease by 13 December 2030 under the conversion plan. The instrument does not address what happens if the licence is issued so late that ten instalments would exceed the licence term. In that scenario, the outer‑metropolitan charge might become due in fewer instalments, but the instrument states that instalments continue until a total of $57,146,840 has been paid, regardless of the licence term. That could mean payments after the licence expires, or it could mean that the final instalment is accelerated. The instrument is silent. This is a drafting ambiguity that could cause dispute.

Compliance with this instrument is straightforward but requires careful timing. The only entity with compliance obligations is NBN Co. The steps are:

1. Identify the relevant licence offers from the ACMA under the conversion plan. Determine which licences are offered as inner‑metropolitan and which as outer‑metropolitan and regional. Licences may be offered separately or in one package.

2. For the outer‑metropolitan and regional licence, decide whether to elect instalments. This decision must be made before the offer date (the day specified in paragraph 56(2)(c) of the Act). NBN Co should evaluate its cash flow and cost of capital. The instalment plan provides an interest‑free deferral - a significant benefit if NBN Co’s borrowing costs are positive. However, instalments create annual payment obligations that may require budgeting. There is no cost to electing instalments other than the administrative burden of ten payments. The election is made by written notice to the ACMA, preferably using the acceptance form from the conversion plan. Ensure the notice clearly states that subsection 8(3) is to apply. Send it in time; do not wait until the offer date. Proof of delivery is critical.

3. Accept the licence offers in accordance with the conversion plan and the Act. Acceptance does not trigger payment unless the licence is issued. The instrument does not require acceptance; NBN Co may decline the licences, but then no charge arises.

4. Pay the charges when due. For the inner‑metropolitan licence, payment of $226,441,720 is due on the first anniversary of the licence’s commencement if the licence is still in force at that time. NBN Co should set aside funds or arrange financing in advance. If NBN Co decides to avoid the charge, it must surrender or allow the licence to lapse before the first anniversary. However, surrendering a spectrum licence may have consequences under the Act (e.g., loss of rights, potential interference with network planning). For the outer‑metropolitan and regional licence, the first payment (either the lump sum or the first instalment) is due one week after the offer date. Subsequent instalments (if elected) are due on each anniversary of the licence’s commencement. NBN Co should set up a payment schedule and ensure ACMA receives payments on time. Late payment is not penalised under this instrument, but the Act may provide for interest, suspension, or cancellation.