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EE Launch UK Legal Challenge to Ofcom’s 5G Mobile Spectrum Auction

Monday, August 21st, 2017 (9:38 am) - Score 1,296
radio spectrum tower mast united kingdom

Last month Three UK threatened Ofcom with a Judicial Review unless they changed the rules of their 4G and 5G radio spectrum auction in order to aggressively curb EE’s (BT) dominance (here). Now EE has issued its own letter before action in order to defend against such measures.

Ofcom recently set the final rules for their auction of radio spectrum in the 2.3GHz and 3.4GHz bands, which aims to help Mobile Network Operators (MNO) to launch “very fastMobile Broadband (4G and 5G) services by 2020. The rules included a number of caps on the amount of spectrum that any one operator can bid for, which is the solution that will be used to help rebalance the market.

Currently EE holds 42% of all related spectrum for their mobile services, while Vodafone has 29%, O2 owns 14% and Three UK has 15%. The more spectrum you own, the better your services perform (e.g. faster speeds) and the wider your network coverage (assuming operators make the best use of it).

Ofcom’s Bidding Restrictions

* First: As we proposed in November last year, we will place a cap of 255MHz on the “immediately useable” spectrum that any one operator can hold as a result of the auction. This cap means BT/EE will not be able to bid for spectrum in the 2.3GHz band.

Immediately useable spectrum refers to mobile spectrum currently licensed in the 800MHz, 900MHz, 1400MHz, 1800MHz, 2100MHz and 2.6GHz bands and the 2.3GHz band available in this award.

* Second: We have decided to place a new, additional cap of 340MHz on the overall amount of mobile spectrum a single operator can hold as a result of the auction. This cap amounts to 37% of all the mobile spectrum expected to be useable in 2020, which includes not only the spectrum available in this auction but also the 700MHz band (due to become available in 2020).

The mobile spectrum we expect to be useable in 2020 includes immediately useable spectrum plus 190 MHz in the 3.4GHz band as well as 80 MHz in the 700MHz band.

Naturally the serial complainer, Three UK, wasn’t best pleased with this because they had campaigned hard for a 30% cap (i.e. effectively blocking BT from bidding and seriously restricting Vodafone). Meanwhile Ofcom knows that EE will need to prepare their own 5G services too (they need some 3.4GHz) and removing a bidder would also reduce the auction’s money earning potential (i.e. a very unhappy Government).

Suffice to say that Three UK threw their toys out of the pram and began gearing up for a High Court challenge, which could significantly delay the auction. The fear of what impact that might have has now caused BT to wade into the fight and begin their own proceedings against Ofcom, which won’t challenge the measures for 2.3GHz but will fight restrictions being threatened for the 5G friendly 3.4GHz band.

In theory this could enable Ofcom to proceed with a quick auction of the 4G friendly 2.3GHz band, while still leaving 3.4GHz to be fought over in court. The regulator has also been considering an alternative option of temporary spectrum licences, which might enable Mobile operators to access the spectrum before the case with Three UK completes.

Meanwhile the EE / BT and Three UK challenges are likely to be merged into a single case. Three UK’s rivals have frequently noted that the operator’s parent company (CK Hutchison Holdings) has more than enough money to buy a good chunk of spectrum and indeed they’ve had plenty of opportunities to do so in the past too, but haven’t.

In addition, Three UK’s recent purchase of 5G friendly spectrum via the £250m acquisition of UK Broadband Ltd. (here) might give them an incentive to delay any 5G auctions for as long as possible, although the operator denies having such a strategy.

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Mark Jackson

By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.

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5 Responses
  1. JustAnotherFileServer

    That’s a risky thing for EE to do. If they loose a court battle they may be forced to give up some of the spectrum they already have.

    The problem with people who have lots of power is that they always want more power and are afraid to loose it.

  2. Mike

    Three wanted O2 but was blocked so it seems they want everyone else to get similar treatment.

    • G.Lee

      To be honest O2 & Three should of been allowed the merger… the networks have only started getting more expensive to be on anyway.

      I’m starting to notice a steep price increase or contract requirement trend this year.

      Pretty much impossible to get something without a contract, a few gig of data and at least 500 mins for under £20 a month now.

      Unless you go to an MNVO, which has some disadvantages for many.

      Broadband is following too, but I suspect that’s because it will be silly to push line rental above £20 when nobody wants it and many people switching for Broadband only services where they can.

      and finally high end subscription TV is probably showing a large loss of revenue to streaming services (legal and illegal) meaning whilst Broadband goes up, TV will come down.

    • MikeHunt

      I noticed prices going up after T-Mobile got gobbled up, Three also hiked prices conincidently just before the assumed merger with O2 as they promised a 5 year price freeze, prices stayed the same afterwards.

  3. ian

    “Naturally the serial complainer, Three UK,” ?

    i think id complain too if the market became bias towards certain companies.

    bt shill much?

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