The ACA's discussion paper aims to gauge the level of interest in private band management and to identify which bands might attract the attention of potential band managers.
ACA acting chairman Bob Horton said that under private band management, the ACA would lease or sell blocks of spectrum to a band manager who would sub-lease spectrum access rights to users or tenants.
"The tenants would operate under the band manager's licence though a contractual agreement negotiated between each tenant and the band manager. It can be compared to a shopping centre owner sub-leasing the various units in the centre to different business and retail tenants," Horton said.
However, Horton assured that band managers will be required to comply with rules set down by the ACA to "ensure protection of the rights of other spectrum users".
"Because of their market position, private managers may be better placed to offer more flexible spectrum access conditions in some bands," Horton added.
The ACA currently manages access to the spectrum by issuing radiocommunications licences that authorise spectrum use.
"In the past year, regulators in many countries have started to look at introducing private band management as a way of dealing with rapidly changing communications technologies and increasing demand for spectrum," he said.
"Private band management could bring even greater efficiency to the use and management of spectrum in Australia."
The ACA's preliminary talks with industry and other government organisations had shown that there was growing interest in the concept of private band management.
"We would like to know whether there are people or organisations interested in becoming private band managers, which specific bands may be of interest, and whether the ACA should consider options for a policy framework to support private band management," Horton said.
In the ACA's Radiocommunications Inquiry Report of 2002, the Productivity Commission argued that there should be "greater market involvement in the allocation and management of spectrum".
One of the recommendations given was that spectrum licences "should be sold in encumbered spectrum and that the ACA should develop the necessary arrangements and identify suitable bands for its implementation".
The ACA discussion paper said that the it is taking a "consultative approach to scoping options for, and identifying the level of interest in, a private management framework that would expand market-based allocation and management of the spectrum".
The paper also said that band management licences would most likely be allocated through a market-based process; consistent with methods the ACA uses to allocate spectrum licences.
"Market-based allocation mechanisms allow the market to determine the allocation and price by identifying the person or organisation that values the spectrum most highly," the paper said.
ACA will also address competition issues that would be relevant to acquiring and trading licences under private band management.
"As competition policy is administered by the [Australian Competition and Consumer Commission] under the Trade Practices Act 1974, the ACA would need to consult with the ACCC to clarify competition issues applicable to private band management," the paper said.
The deadline for written submissions on the proposal will be on 2 May 2005.
