SWAIN CLAIM UNFOUNDED

Speculation by Labour Commerce spokesman Paul Swain about competition surrounding the 2GHz Auction shows his limited understanding of the issues,
Communications Minister Maurice Williamson said today.

"Competition is important and the issues have been carefully considered by the Government prior to taking the decision to proceed.

"The Auction has been designed so that all bidders can see other participants bids and can respond. No bidder can "secretly' buy all the spectrum on offer.
In addition all the successful bids have to be cleared by the Commerce Commission under the Commerce Act to ensure there are no competition concerns," said Mr Williamson.

Mr Williamson said that history in this area associated with mobile telephones indicates that the Commerce Act can ensure that one applicant does not dominate. "For example, in the early 1990s, Telecom was not allowed to hold all the available spectrum for cellular telephones."

"Also, no one can purchase all of the 2GHz spectrum because, as bidders are aware, there is another 15MHz of spectrum which is likely to be available to
auction in three to five years."

"What the opposition fails to explain is how it makes commercial sense for anyone to purchase this valuable resource and "warehouse it", as Mr Swain
claims, when it has tremendous potential for next generation cellular technology," said Mr Williamson.

"It's also interesting to note that the issue of including a "Use or Lose" provision in the Radio Communications Act was considered in 1988 by the then
Labour Government, who decided against it."

"The Government's confident anyone buying this spectrum will want to use it."

Further information on the Auction: http://auction.moc.govt.nz/