EE UK Starts Legal Challenge to Stop Cap on 3.4GHz 5G Mobile Spectrum

Mobile operator EE (BT) has formally lodged a legal appeal against the matter of Ofcom’s forthcoming 4G / 5G radio spectrum auction in the 2.3GHz and 3.4GHz bands. The aim is to stop Three UK’s own challenge from imposing a cap on their ability to bid for a slice of 3.4GHz band.

At present EE holds about 42% of all mobile spectrum, while Vodafone has 29%, O2 14% and Three UK 15%. Often the more spectrum you own, the better your services. Ofcom has agreed that the market needs a little correction and so their auction proposed to place a cap of 255MHz on the “immediately useable” spectrum (i.e. EE wouldn’t be able to bid on the 2.3GHz band).

On top of that the regulator also proposed a cap of 340MHz on the overall amount of mobile spectrum that a single operator can hold as a result of the auction (i.e. 37% of all the mobile spectrum expected to be useable in 2020, including the 700MHz band), which meant that EE would still be able to bid on a slice of the 3.4GHz band (they need this in order to prepare their own future 5G Mobile services).

However Three UK (CK Hutchison Holdings) has long campaigned for a punitive 30% cap and earlier this month they began a legal challenge of the auction in order to get it, which if successful would completely block EE from bidding. On top of that such a cap could also reduce the money earning potential of the auction itself, which would anger the Government.

Naturally EE were never going to take that lying down and so this week they too have carried out an earlier threat by formally lodging their own appeal against Three UK’s attempt to win a Judicial Review of the auction rules (credits The Register). As usual Ofcom’s canned statement is unchanged from the last time.

A Spokesperson for Ofcom said:

“It is very regrettable that the auction will now be delayed by this litigation, which will harm consumers, businesses and ultimately the UK economy. We hope this matter can be resolved promptly, so that we can release the spectrum as soon as possible.”

Meanwhile Three UK continues to deny that their litigation will harm Ofcom’s release of the aforementioned spectrum and they’ve optimistically predicted that their challenge will be a “short process,” which could be followed by a court decision in early 2018 (history shows that such cases can drag on for a long time, especially when more parties join the fun).

Rivals have frequently argued that Three UK’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, but haven’t.

Similarly critics point to Three UK’s recent purchase 5G friendly spectrum via their £250m acquisition of UK Broadband Ltd. (here), which they claim might give the operator a big incentive to delay the auction for as long as possible, although this is denied.

Funnily enough we are expecting to hear more about Three UK’s plans for UK Broadband’s spectrum and network before the end of 2017. Eyes will surely roll skyward if those plans involve some form of national 5G or similar network.