Radiocommunications (Spectrum Licence Limits—26 GHz Band) Direction 2020

This instrument is a ministerial direction under subsection 60(10) of the Radiocommunications Act 1992. It compels the Australian Communications and Media Authority (ACMA) to include spectrum aggregation limits in the allocation procedures it determines under subsection 60(1) of the Act for the 26 GHz band. The direction applies only to the allocation of spectrum licences enabled by the Radiocommunications (Spectrum Re‑allocation,26 GHz Band) Declaration 2019. The central mechanical requirement is that ACMA must ensure no single person or specified group of persons (as defined in the direction) may, as a result of that allocation process, use more than an aggregate of 1 GHz of spectrum in the 26 GHz band in each designated area.

The designated areas are those listed in the re‑allocation declaration: items 1 to 26 each correspond to a named area (likely major metropolitan licence areas), and items 27 to 29 are combined into a single composite area (likely covering regional and remote Australia). The 26 GHz band is defined as the part of the spectrum from 25.1 GHz to 27.5 GHz, though the lower boundary (25.1 GHz) is excluded from the band as a matter of interpretation. The direction does not itself impose limits directly on licence applicants or licensees; it imposes a statutory duty on ACMA to design its allocation procedures so that the limits operate. If ACMA fails to incorporate the 1 GHz cap into the allocation rules, it would be acting contrary to a binding legislative instrument. The direction is therefore a constraint on agency discretion, not a direct rule for private parties. However, its practical effect is to limit the amount of high‑bandwidth millimetre‑wave spectrum any one entity or economically linked group can hold in a given geographical area, which directly shapes the competitive structure of the 5G and fixed‑wireless market in those areas.

Spectrum and spectrum licence. These terms are defined in the Radiocommunications Act 1992. A spectrum licence grants the licensee the right to use a specified part of the spectrum, subject to conditions, and is tradeable. The direction refers to spectrum licences allocated under Subdivision B of Division 1 of Part 3.2 of the Act (the price‑based allocation process).

26 GHz band. Defined as the frequencies between 25.1 GHz and 27.5 GHz, with the lower boundary excluded. This is a millimetre‑wave band suitable for high‑capacity, short‑range mobile and fixed wireless services, including 5G.

Designated area. These are geographical licence areas from the re‑allocation declaration. The direction treats each of items 1-26 as separate areas, but items 27-29 are aggregated into one. Thus there are 27 distinct designated areas for the purpose of the 1 GHz cap.

Specified group of persons. This is the key aggregation concept. It includes: (a) a person plus all of that person’s associates; and (b) any combination of such groups that share at least one member. For example, if Company A and its associates form one group, and Company B and its associates form another group, and one individual is an associate of both (because they hold 15% of each or are a director of both), then the two groups are treated as one specified group. This prevents circumvention through multiple corporate vehicles. However, there is an exception (subsection 4(3)): an individual providing company secretarial services through an independent third‑party provider to related bodies corporate incorporated outside Australia is not treated as a common member solely because of that role. The exception is narrow: it only applies where the service provider is separate, the bodies are foreign incorporated, and the individual is not otherwise an associate.

Associate. A layered definition covering directors, secretaries, related bodies corporate, individuals controlling or holding 15% or more of voting power or issued shares, and spouses or de facto partners. Crucially, it also includes any person (other than the Commonwealth represented by ACMA) who is party to a “relevant agreement” with the first person that relates to the use of spectrum in the re‑allocation bandwidth or the acquisition of such a spectrum licence.

Relevant agreement. Extremely broad: any agreement, arrangement or understanding, formal or informal, written or oral, legally enforceable or not. The only exclusions are roaming services agreements (carrier agreements for supplying public mobile services where another carrier’s services are unavailable) and agreements between carriers provided for under the Telecommunications Act 1997 or Part XIC of the Competition and Consumer Act 2010 (which deals with telecommunications access). This means a handshake deal or a memorandum of understanding about spectrum sharing could create an associate relationship, triggering aggregation.

The primary addressee is ACMA, as the direction is directed to it. ACMA must adjust its allocation procedures to reflect the 1 GHz cap. This may require redesigning the auction or allocation methodology, determining eligibility and bidding limits, and possibly imposing post‑allocation licence conditions to ensure compliance. ACMA’s compliance and enforcement staff must also monitor aggregate holdings.

The immediate private‑sector impact falls on entities that intend to acquire spectrum licences in the 26 GHz band, particularly telecommunications carriers and infrastructure companies. The direction forces bidders to consider their existing associates and any relevant agreements with third parties. A carrier that already holds 500 MHz in a designated area through an existing licence (acquired outside the re‑allocation process) may still be able to bid for another 500 MHz under the new allocation, but it cannot exceed 1 GHz in that area from the re‑allocation licences. The direction only caps the usage “as a result of the allocation of a spectrum licence that is enabled by the re‑allocation declaration”; it does not aggregate pre‑existing licences unless they are obtained through the same allocation process. This point is crucial: the cap applies only to licences allocated under the specific re‑allocation declaration, not to all spectrum holdings in the band. However, if a person already holds 600 MHz in a designated area from a previous allocation, they would still be limited to an additional 400 MHz from the re‑allocation process, because the cap is 1 GHz of the band from re‑allocation licences.

Indirectly, consumers of 5G and fixed‑wireless broadband services in the 26 GHz band are affected. The cap is intended to prevent foreclosure by a single carrier in high‑demand areas, potentially preserving competitive supply. However, the cap also limits the ability of a single operator to deploy a very high‑capacity network that might require the full 2.4 GHz of available bandwidth (25.1 to 27.5 GHz is 2.4 GHz wide). Whether this trade‑off benefits consumers depends on market conditions, but the direction imposes a structural constraint.

Professional services firms, such as law firms and consultants advising carriers on spectrum strategy, need to map the associate definitions carefully. The broad “relevant agreement” definition means that a joint venture agreement, a spectrum sharing arrangement, or even a non‑binding memorandum of understanding could bring two otherwise unrelated entities within the same specified group. This creates a compliance burden for bidders to identify all informal arrangements before bidding.

The direction imposes a single duty: ACMA must determine allocation procedures that include limits ensuring no person or specified group of persons uses more than 1 GHz of the 26 GHz band in each designated area from re‑allocation licences. The duty is not optional; the word “must” appears in subsection 5(2)(a) and (b). If ACMA fails to do so, a person aggrieved could, in theory, seek judicial review of the allocation procedures or the minister could issue a further direction.

No direct duties are imposed on private parties by this direction. However, the allocation procedures determined by ACMA (which are not part of this instrument) will impose duties on applicants and licensees. Those duties may include declarations about associates, aggregation limits on bidding, and licence conditions that cap aggregate holdings. A licensee that breaches a licence condition because it exceeds 1 GHz (for example, because it later acquires an associate with another licence) could face enforcement action under the Radiocommunications Act. The direction itself does not create a private right of action; a competitor cannot sue another licensee directly under this instrument.

Rights are also limited. A potential applicant has a right to have the allocation procedures comply with the direction, but this is a procedural right enforceable through administrative law rather than a substantive property right. The direction does not confer any right to a licence; it only constrains the maximum amount of spectrum one entity can control from the re‑allocation.

This instrument contains no penalty provisions. It is a direction to a regulator, not a rule directly binding on licensees or other parties. Enforcement of the aggregation limit therefore relies on the enforcement mechanisms in the Radiocommunications Act 1992 and the conditions of the spectrum licences themselves.

If ACMA incorporates the 1 GHz cap into licence conditions, a licensee that breaches that condition (for example, by holding 1.2 GHz through a combination of its own licence and licences held by an associate that is part of the same specified group) could face civil penalty provisions under the Act. Section 132 of the Act (not in this source, but part of the parent statute) provides for penalties for breach of licence conditions. The ACMA could also suspend or cancel the licence under Part 3.4 of the Act. However, the direction does not create a new offence or penalty; it operates through existing enforcement pathways.

Additionally, if ACMA itself fails to comply with the direction, the minister could issue a further direction, or the failure could be challenged through the Administrative Decisions (Judicial Review) Act 1977 or the common law grounds of jurisdictional error. The direction is a legislative instrument registered on the Federal Register of Legislation, so it has legal force; a court could declare allocation procedures invalid if they are inconsistent with the direction. The practical enforcement mechanism is therefore administrative law, not a specific penalty code.

This direction is made under subsection 60(10) of the Radiocommunications Act 1992, which empowers the minister to give written directions to ACMA about the determination of allocation procedures. It operates within the broader framework of the Act, particularly Part 3.2 (spectrum licences) and the re‑allocation declaration made under sections 153A-153C of the Act. The re‑allocation declaration itself designates spectrum for re‑allocation and triggers the obligation to allocate by price‑based methods. The direction complements the declaration by constraining the outcome.

The definition of “carrier” and “public mobile telecommunications service” cross‑references the Telecommunications Act 1997, importing that Act’s definitions. This means the direction’s effect on carriers is consistent with their licensing and regulatory obligations under telecoms law. Roaming services agreements (as defined in the direction) are excluded from the definition of relevant agreement, which prevents ordinary roaming arrangements from creating associate relationships. This interacts with Part XIC of the Competition and Consumer Act 2010, which deals with access to telecommunications services, including roaming. Also, agreements between carriers provided for under the Telecommunications Act or Part XIC are excluded from the relevant agreement definition, so legitimate access arrangements do not trigger aggregation.

The definition of “related body corporate” adopts the meaning from the Corporations Act 2001, ensuring consistency with corporate law definitions. This means that two companies that are subsidiaries of the same holding company will be associates because of the related body corporate link. The direction therefore aligns with existing corporate group concepts.

There is also a potential interaction with competition law: the spectrum cap could be seen as a sector‑specific competition measure, but it does not replace or override Part IV of the Competition and Consumer Act 2010 (anti‑competitive conduct). A carrier that accumulates 1 GHz in an area could still be subject to misuse of market power provisions if it engages in anti‑competitive conduct.

The direction does not interact with state or territory laws, as spectrum management is a Commonwealth responsibility under the Constitution (s 51(v)). It also does not affect international obligations, though the 26 GHz band is allocated globally for mobile services, and Australia’s domestic allocation must be consistent with the ITU Radio Regulations.

The instrument is the Radiocommunications (Spectrum Licence Limits,26 GHz Band) Direction 2020. According to the commencement table, the whole instrument commenced the day after it was registered. No amending instruments are listed in the source text, and the note to the table states that the table will not be amended to deal with later amendments. As of the provided text, no amendments are recorded. It is a single, standalone direction.

Because it is a legislative instrument made by the minister under a statutory power, it can be amended or revoked by a later direction. The Radiocommunications Act 1992 does not require a specific procedure for amending such a direction (other than the usual requirements for legislative instruments under the Legislation Act 2003). Any amendment would be registered and published. Practitioners should check the Federal Register of Legislation for any subsequent amending instruments that might adjust the 1 GHz cap, the definition of designated area, or the associate definitions. As at the date of the source, the direction remains in its original form.

The source text contains no reference to any litigation concerning this direction. The instrument is a relatively narrow direction to a regulator and is not the kind of instrument that typically generates direct court challenges. However, it could become the subject of litigation if ACMA’s allocation procedures are challenged on the basis that they do not give effect to the direction, or if a party argues that the aggregation provisions are ambiguous or go beyond the minister’s power under s 60(10). Any such challenge would likely be heard in the Federal Court. To date, no reported decisions mention this direction. This is unsurprising, as the allocation process for the 26 GHz band is still ongoing or recent. If the ACMA subsequently allocates licences and a dispute arises about the aggregation limit, litigation may occur. The direction itself is not directly amenable to review by the Administrative Appeals Tribunal, as it is a legislative rule. Judicial review under the Administrative Decisions (Judicial Review) Act 1977 would be available for decisions made under the direction (such as the allocation procedures), but not for the direction itself. Practitioners should monitor the Federal Court for any cases citing this instrument.

The most significant trap is the breadth of the “relevant agreement” definition. It captures informal, oral, and non‑binding arrangements. Two carriers that have a casual understanding about coordinating spectrum purchases could be deemed to have a relevant agreement, making them associates and collapsing their separate holdings into one specified group. The only exceptions are roaming services agreements and certain carrier agreements under the Telecommunications Act or Part XIC of the Competition and Consumer Act. This means that many ordinary commercial negotiations, if they crystallise into any form of understanding, could create unwanted aggregation.

The specified group definition has an exception for company secretarial services, but it is extremely narrow. It only applies where the company secretarial services are provided through an independent third‑party provider, each related body corporate is incorporated outside Australia, and the individual is not otherwise an associate. A company secretary who sits on boards of two Australian subsidiaries of the same foreign parent could still be a common member, causing the two groups to be aggregated. This is a hidden aggregation risk for multinational groups.

The definition of “associate” in relation to an individual includes a de facto partner under the Acts Interpretation Act 1901. This captures long‑term domestic relationships beyond marriage. If two individuals who are de facto partners each control separate businesses that bid for spectrum, they may be associates, and their businesses’ holdings could be aggregated. This is an unusual intrusion of personal relationships into corporate licence aggregation.

Another nuance: the 1 GHz cap applies only to the “aggregate of the 26 GHz band in each designated area”. Because the band is 2.4 GHz wide (25.1 GHz to 27.5 GHz, excluding the lower boundary), the cap is less than half the total available bandwidth. However, the cap is per designated area. A person or group could potentially acquire 1 GHz in each of the 27 designated areas, but that would require 27 separate licences (or sets of licences). The aggregate across Australia is not capped; only the per‑area total.

The direction states that the limit applies “as a result of the allocation of a spectrum licence that is enabled by the re‑allocation declaration”. This means that licences acquired on the secondary market after the initial allocation are not captured by the cap. A person could buy an existing licence in the band from another party and hold more than 1 GHz in an area, because that acquisition is not “as a result of the allocation”. However, if the initial allocation occurs and the cap is embedded in licence conditions, those conditions might restrict subsequent acquisitions. The direction is silent on secondary trading, so the cap’s durability depends on how ACMA implements it.

Because the direction is addressed to ACMA, the compliance burden falls first on the regulator. ACMA must ensure its allocation procedures explicitly impose aggregation limits that mirror the direction. This likely involves including eligibility and bidding restrictions in the allocation rules (such as an auction), and possibly imposing post‑allocation licence conditions that prevent the licensee from later holding spectrum in excess of 1 GHz through associate arrangements. ACMA should also define clearly how it will verify associate relationships and relevant agreements. It will need to create a process for applicants to declare their associates and specified groups, and perhaps require ongoing reporting.

For entities that wish to acquire spectrum licences in the 26 GHz band, compliance is indirect but critical. They must first map all potential associates under the direction’s definitions. This includes identifying all directors, secretaries, related bodies corporate, shareholders with 15% or more voting power or shares, and any relevant agreements. A prudent entity will conduct a thorough due diligence of all current arrangements, including informal understandings, joint ventures, network sharing arrangements, and even discussions with other carriers about coordination. Any agreement that relates to the use of spectrum in the re‑allocation bandwidth or the acquisition of such a licence could create a relevant agreement. The exception for roaming services agreements requires that the principal purpose is enabling one carrier to supply services where another carrier’s services are unavailable. If the agreement has a broader purpose, it may not qualify.

If an entity discovers that it is part of a specified group that already holds, or intends to bid for, more than 1 GHz in a designated area, it must restructure its holdings or refrain from bidding. This could involve terminating relevant agreements, divesting shareholdings, or changing board composition. The company secretarial services exception is only available for foreign‑incorporated bodies; Australian groups cannot rely on it.

During the application process, entities should obtain legal advice on whether any proposed bidding consortia or partnerships create associate relationships. The direction applies to “the allocation of spectrum licences”, so bidders must ensure that their aggregate bid does not exceed the 1 GHz cap, accounting for all associates. Practitioners should also advise clients to keep detailed records of all communications and agreements with other potential bidders, to demonstrate that no relevant agreement existed if later challenged. After the allocation, licensees should monitor any changes in their associate relationships (such as a new director appointment or a change in shareholder structure) that could cause an aggregation breach. Licence conditions may require immediate notification to ACMA. The best defence is a clear compliance programme that tracks all entities within the specified group on a real‑time basis.