New Zealand's Radiocommunications Act 1989 was pioneering and radically changed the landscape of spectrum management. New Zealand was the first country to create a management rights system whereby owners of blocks of “management rights spectrum” are free to issue spectrum licences for the specified part of the spectrum according to their own policies. In New Zealand’s case, there are 209 management rights blocks with 70 reserved for the government covering services like broadcast. The other 139 blocks are reserved for essentially commercial services like fixed and mobile services.
Spectrum Licences granted by a manager of a block of management rights spectrum usually have the following characteristics:
- assigned for a defined period of time;
- non-specific to equipment or transmission methods; and
- define an envelope within which the licence holder is free to operate at his or her discretion.
A band manager will typically have assignment rights over, or be the licensee of, a block of spectrum, which it will then subdivide among many users. In many respects, a band manager can be thought of as a ‘wholesaler’ of spectrum, which it then ‘retails’ to individual users.
Use of a band manager may simply be a means of reducing transaction costs, if competitive tendering produces a manager which is more efficient in the relevant business process than the regulator itself. Band managers can also permit more efficient use of spectrum by pooling demand. Such policy is effective if:
- individual users have insufficient spectrum to achieve efficient usage, and
- different users of spectrum have demand patterns that peak at different periods.
New technological developments such as ‘agile’ technologies which allow transmitters and receivers to ‘hop’ across frequencies increase the potential role of band management.
On the other hand, band managers can become possessive of the spectrum which they have been awarded to manage, and this can thwart spectrum policy objectives, for example, when the spectrum regulator wishes to re-allocate the spectrum managed by the band manager to another purpose.