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WiMAX New Zealand: spectrum cap doesn't fit, say licensees

The wireless Regulator in New Zealand has decided to cap the amount of spectrum it will assign to new companies, who are planning to set up WiMAX networks.

These rules were imposed by the regulator "to halt spectrum trading," reports a local web site, quoted by Telegeography - but the down side (say network operators) is that these rules "are hindering the development of the sector."

Telegeography quotes Claire McEntee from NZ Infotech Weekly who has found a tame consultant, Paul Budde, to express industry dissatisfaction in public:

The Commerce Commission’s decision to limit each WiMAX licence to 40MHz of spectrum is discouraging telcos from building networks.

The regulator claims the 40MHz cap, which is in force until December 2012, is designed to increase the number of players with WiMAX spectrum, and that 40MHz is sufficient spectrum to deploy a nationwide network. Operators disagree, however, and say it does not make sense for several firms to deploy separate networks.

The report adds: "Firms are also complaining that they are unable to utilise their WiMAX licences until current licensees lose their rights to frequencies in 2009 or 2010."

McEntee also quotes Susie Stone, development manager at Kordia – which bought some of the spectrum – saying: "Government regulations have the potential to hold back investment in WiMax. 'It doesn't make sense for us to duplicate infrastructure'," she adds.

From the other side of the globe, it's not immediately possible to tell whether these arguments are technical, commercial, or political. There is a looming election, and it's impossible to say for sure that the Regulator won't come under Government pressure to offer licensees a better deal because of that.

Equally, it's hard to see how accurately these new incumbents could predict likely traffic, and bandwidth requirements for a service using a new technology, with no existing customers to base demand forecasts on. This could easily be a lobby designed simply to cut franchise prices.

What it does show is that nobody is in a position to splash out on confident expectations of a wild WiMAX success story, yet.