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New Powers Allow Ofcom to Fine Mobile Operators for Poor Coverage

Saturday, September 17th, 2016 (8:19 am) - Score 1,170

Tucked deep within the new Digital Economy Bill 2016-17 is a measure that will give Ofcom enough power to impose a financial penalty (worth up to 10% of a company’s gross revenue) on Mobile Network Operators’ (MNO) or Fixed Wireless ISPs that fail to deliver on a coverage obligation.

Back in December 2014 the Government reached a new £5bn legally binding agreement with all of the major mobile operators (Vodafone, EE, O2 and Three UK), which committed them to extend their geographic network coverage (voice and text) of the United Kingdom to 90% by the end of 2017 (falling to 85% for Mobile Broadband data coverage).

At present most of the major operators’ are still a fair distance from achieving this target, although EE’s mass of spectrum and their early head-start on the 4G roll-out should put them in a better position than some of the others (their website currently reports 70% geographic coverage and climbing), but all operators still face a lot of hurdles.

Since then we’ve seen plenty of bickering between mobile operators, Ofcom and the Government over various issues related to mobile coverage. For example, EE recently lost a court battle over Ofcom’s proposed licence fee hike for the 900MHz / 1800MHz bands (here).

Meanwhile reform of the Electronic Communications Code (ECC), which is needed to make it easier and cheaper for operators to deploy infrastructure on private land, still faces plenty of opposition from land owners (this forms part of the above bill).

On top of that Ofcom’s forthcoming auction of the 2.3GHz (2350 – 2390MHz) and 3.4GHz (3410 – 3600MHz) bands appears to be facing plenty more threats and challenges, with Three UK in particular claiming that EE and Vodafone should be blocked from owning too much spectrum (here).

The Government has clearly had enough of trying to use a carrot instead of the stick to resolve such issues and as a result we already know that the new bill will make it harder for telecoms operators to obstruct new Ofcom regulation. But that’s not all they want to see changed.

Matt Hancock MP, Digital Economy Minister, said:

“In the digital age, getting a mobile signal is not a nice to have but a critical part of modern life. It’s vital for the economy as well as personal calls, texts and web browsing.

The mobile operators have signed up to legally binding obligations to deliver coverage to at least nine tenths of Britain. This new legislation will mean the Government can ensure their commitments are delivered.”

In relation to this the The Telegraph has spotted that Part 2 (Digital Infrastructure) of the bill also includes a new power to fine mobile / wireless operators (Dynamic spectrum access services) a hefty amount for failing to deliver on a coverage obligation (this will normally reflect an accounting period of 12 months before the contravention).

53H Amount of penalty under section 53E

(1) The amount of a penalty notified under section 53E is to be such amount, not exceeding 10% of the relevant amount of gross revenue, as OFCOM think—

(a) appropriate, and

(b) proportionate to the contravention in respect of which it is imposed.

Ofcom tends to give operators a chance to meet their obligations first before taking action and past experiences with Vodafone’s 3G coverage suggest that they’ll probably do this again for the geographic target (here), which might result in a delay to meeting the 90% goal but would avoid an immediate financial penalty. Never the less the threat does exist and 10% is no small piece of pie, especially for big companies.

We should point out that the 90% obligation applies to any of the 900MHz (GSM), 1800MHz (GSM), 2100MHz (UMTS) or 800MHz (LTE) bands as set out last year (here).

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
3 Responses
  1. Avatar dragoneast says:

    up to, appropriate and proportionate: all plenty of room for argument then. And Ofcom have to behave with the judges in the background. All necessary, of course; but it isn’t you fail, you pay like some sort of cash machine. Not a punishment, but a useful incentive nonetheless.

    I note the way we seem to be moving backwards towards legislation prescribing everything in detail; as in so much else of life. At least we tried freedom and responsibility for a few decades; then decided it didn’t work after all. A shame, in my view; but it was good whilst it lasted.

  2. Avatar Billy says:

    And the ‘up to 10%, appropriate, and proportionate’ financial penalties will be paid for by the customers, including the customers with no coverage, by continual increasing tariffs.

  3. Avatar NGA for all says:

    How does this work with 02’s 4G coverage obligation of 98% or 95% of premises by Devolved Nation? I think the signal strength is measured -85dbm to support 2Mbps indoors. This is by the end of 2017. It is caveated by being measured when the cell is lightly loaded.

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