Legal Squabbles Over the UK 4G Auction Result in Tougher Ofcom Rules

The legal threats and challenges that preceded this year’s much delayed auction of new superfast 4G (LTE) based Mobile Broadband spectrum (800MHz and 2.6GHz) have resulted in the government’s Department for Business, Innovation & Skills (BIS) proposing new rules to prevent future hold-up’s.

The new streamlined appeals system has been designed for businesses that are intending to appeal a “decision by an economic regulator or competition authority“, such as Ofcom, Ofgem or any of the other related bodies.

It would, in theory, save money and make the process faster. By contrast the current system, which has seen more than 50 appeals of regulatory and competition decisions over the past five years, is estimated to cost around £22 million per year.

In essence the changes would require businesses, such as O2 or EE for example (they helped to delay the 4G auction for quite a while), to prove they’re challenging the substance of the regulator’s decision instead of its technicalities. The move might similarly help Ofcom to push through changes in the fixed line broadband ISP market.

Jo Swinson, Business Minister, said:

“The UK’s appeal rules work well and we have a world-class framework in place. But we also recognise that there is room for improvement to support growth.

It is only right that firms can hold regulators and competition authorities to account when they think the wrong decision has been reached. But it is in nobody’s interest that appeals end up being unnecessarily lengthy and costly.

A new streamlined system will mean that businesses see their appeals sorted quicker and that they and regulators spend less time and legal resources on disputes. Reduced delays will help build a stronger economy and provide better outcomes for consumers.”

Key Changes of the New Proposals

• Making the standard of review for appeals more consistent between sectors, focusing appeals on identifying whether regulators have made material mistakes

• Providing consistency as far as possible between appeal routes in different sectors, to reduce complexity and make sure that the expertise of the main appeal bodies is used most effectively.

• Measures to encourage better engagement between regulators and firms before decisions are made through better information sharing.

The appeal against Ofcom’s proposals for the award of 2.6GHz spectrum in 2008 took 14 months to resolve but under the new proposals this might never have been given the time of day.

Ofcoms Statement

We welcome the Government’s efforts to simplify the current appeals system. Many of Ofcom’s important regulatory decisions are subject to appeals, which can be slow, expensive and burdensome in the fast-moving sectors we regulate. This means it can take longer to implement measures that benefit consumers.

On the other hand it’s fair to say that all these legal squabbles did force Ofcom and the government to take more appreciation for some of the operators arguably legitimate commercial concerns, which could perhaps have been overlooked had the regulator been allowed to push through its changes.