Using spectrum allocations to address indigenous rights claims: The case of New Zealand

In February 2022, the New Zealand Government announced that a yet-to-be-formed "Ma over bar ori Spectrum Entity" would "receive an ongoing allocation of 20 percent of future national commercial spectrum allocations, at no cost." This is in addition to the 25 percent of spectrum designated for 5G technology (mid-band, 3.4-3.8 GHz) under the Ma over bar ori Spectrum Working Group agreement. The novel arrangement, which creates a perpetual obligation rather than simply a one-off transfer, appears to settle a long-standing dispute between the Ma over bar ori indigenous people of New Zealand and the Government regarding a claim under an 1840 treaty that Ma over bar ori were entitled to a share of spectrum due to their historic property rights and the Government's obligation to ensure that their language could flourish. Further support apparently derives from New Zealand's obligations as a signatory to the United Nations Declaration on the Rights of Indigenous Peoples. The decision is notable for the lack of analysis of the expected effects on long-standing sector competition and efficiency objectives in the New Zealand telecommunications industry. Importantly, it introduces a tension into New Zealand spectrum policy between the (historic) allocation of spectrum rights to achieve the most economically efficient future outcome for the benefit of all New Zealanders (including all Ma over bar ori), and the (post-memorandum) allocation where a preferential set-aside has been created to address a narrow distributional objective in spectrum "ownership" and governance involving only a subset of the population identifying as Ma over bar ori. While raising the latter question, this paper addresses the competition and economic efficiency issues absent so far in official consideration of the arrangement. Using comparative economic and policy analysis, we find that while wealth and control is transferred from the Crown to the Ma over bar ori entity, the Ma over bar ori entity faces very different opportunities and incentives to deploy the spectrum in the most socially-useful manner compared to commercial operators. The "set-aside" creates both artificial scarcity for commercial spectrum and alters the strategic options for all parties due to the Ma over bar ori rights being perpetual and not subject to the same terms and conditions as commercial spectrum. Additional burdens are imposed on New Zealand telecommunications service consumers not borne by those in jurisdictions without such policies, and relative to the counterfactual of full open auction of the relevant rights. We conclude that the agreement effectively subjugates sector competition and efficiency objectives to distributional concerns. Furthermore, granting specific policy development rights to the Ma over bar ori entity suggests the agreement is not simply a vehicle for administering Ma over bar ori spectrum but instead establishes a constitutional "co-governance" partnership between a state agency and the Ma over bar ori entity governing future New Zealand spectrum policy. These fundamental changes to spectrum policy are unprecedented internationally.