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MPs Pile Pressure on UK Mobile Operators to Resolve 4G Auction Dispute

Posted: 04th Nov, 2011 By: MarkJ
UK DCMSuk lte 3g 4g ofcom mobile broadbandThe UK governments Commons Culture, Media and Sport Committee (CCMSC) has released a new report that condemns the "infighting" and "lack of co-operation" from mobile operators, which has already forced Ofcom into "delaying rollout of faster broadband services" (i.e. 4th Generation Mobile Broadband service).

The communications regulator, Ofcom UK, originally aimed to begin the auction of its re-farmed radio spectrum (800MHz and 2.6GHz) for used by next generation 4G ( LTE ) Mobile Broadband services in Q1-2012. Last month this was delayed to Q4-2012 (here), following "substantial and strongly argued responses to [its] consultation" (e.g. legal threats from O2 UK).

The delay happened despite an earlier intervention by the governments DCMS Secretary of State, Jeremy Hunt MP, whom warned mobile phone operators to "put aside competitive differences and work together". They didn't and today's report supports Ofcom's position.

John Whittingdale MP, Chair of the Committee, said:

"Ofcom has had a very difficult job adjudicating between competing and polarised interests, and we are concerned that constant disagreement and special pleading from the four mobile network operators appears to have further delayed the spectrum auction. We believe that the basic rules for the auction which Ofcom has laid down are sensible and fair, and that further delays will result in the UK falling further behind in this vital area. The auction needs to proceed as soon as possible.

Where a mobile provider is set to gain a windfall from the sale of what was originally a public asset, Government and Ofcom should find a way to ensure that at least some of the proceeds are invested for public benefit.

Access to fast broadband services will become increasingly important in the future and those without coverage, particularly in rural areas, will be left at a disadvantage. We believe that Ofcom needs to go further than it currently proposes by setting a condition that at least one of the new licence holders must achieve 98 per cent coverage across the country."

We suspect that Everything Everywhere ( Orange and T-Mobile ) will be feeling somewhat frustrated after reading the report, which claims that they are "making a substantial profit from a public asset that was granted to it for free." This forgets that they were forced to sell 1800MHz as part of the recent merger and do have to pay £33m in annual license fees.

The report reads very much like a shot across the bow for certain mobile operators, which will surely want to avoid stricter legislation and more government controls over how they do business. All sides are expected to meet up before Christmas, although they've done so before and rarely seem to make much progress. Perhaps this time the government will use a stick instead of the carrot.

Meanwhile the boss of Three (3) UK, David Dyson (CEO), would surely be the first to point out that any delay might also benefit O2 and Vodafone UK, which were recently allowed to use their existing 900MHz (shares many of the same coverage and cost benefits as 800MHz) spectrum for 3G data services.
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