Posted: 12th Oct, 2010 By: MarkJ


The
Competition Appeal Tribunal, a specialist UK judicial body whose function is to hear and decide cases involving competition or economic regulatory issues, has rejected an appeal by mobile operator O2 to use existing 2G (voice) 900MHz and 1800MHz radio spectrum for 3G / UMTS (data) Mobile Broadband services.
Opening up 900MHz and 1800MHz for use by Mobile Broadband services, which could improve internet coverage and make the network cheaper to run, is already part of the UK governments spectrum liberalisation plan. This, along with the auction of 800MHz for use by 3G services (currently used for old analogue TV signals), is due to be concluded "
by the end of 2011".
However O2 didn't want to wait any longer for the UK 900MHz and 1800MHz proposals to be heard in parliament and mistakenly believed that it could use EU law instead. O2 considered that it had a directly effective right to deploy UMTS in the 900MHz and 1800MHz bands, derived from two sources.
(i) Council Directive 87/372/EEC on the frequency bands to be reserved for the coordinated introduction of public pan-European cellular digital land-based mobile communications in the Community, as amended by Directive 2009/114/EC of the European Parliament and of the Council (“the Amended GSM Directive”).
(ii) Commission Decision 2009/766/EC dated 16 October 2009 on the harmonisation of the 900MHz and 1800MHz frequency bands for terrestrial systems capable of providing pan European electronic services in the Community (“the 900/1800MHz Decision”).
Indeed the new EU rules, which mirror the proposed UK position on spectrum harmonisation, were supposed to take effect in May 2010 and should have allowed O2's original
licence variation request with Ofcom to proceed.
It doesn't take a genius to work out that May 2010 was also the date of a certain
UK General Election, which resulted in a new government and caused delays to many political and regulatory related processes. This is quite normal.
The JudgementThe Directives comprising the European common regulatory framework, and in particular Directive 2002/20/EC on the authorisation of electronic communications networks and services (“Authorisation Directive”), make clear that a two stage approach is to be adopted:
* first, the necessary harmonisation across the EU under the GSM Amendment Directive must take place by 9th May 2010; and
* secondly, the implementation of the necessary authorisations and licence amendments under the Authorisation Directive.
The majority therefore did not accept that O2 already had an inviolable right to use the 900 MHz and 1800 MHz frequency bands with UMTS technology. O2’s only right was to use the 900/1800 MHz bands for GSM systems. Much clearer words would have been used, had it been intended that licence restrictions on the use of UMTS technology should be lifted without any prior evaluation of the competition implications or any compliance with the procedures laid down by the Authorisation Directive (and in particular with the mandatory provisions of Article 14).
The Tribunal further concluded by a majority that, because of the way in which the GSM Directive had been implemented in the UK, the GSM Amendment Directive and the 900/1800 MHz Decision did not require OFCOM to take any specific steps to implement it prior to 9th May 2010. O2, therefore, had no directly enforceable right to require OFCOM to take specific steps to lift the restrictions on its licence before 9th May 2010.
In addition 900MHz is presently only owned and used by O2 and Vodafone and they still don't want to share it. Legal challenges by rival operators, which all hold differing amounts of spectrum in various bands, have also conspired to stall the process. The reality is that, once auctions are underway and the usual parliamentary processes completed, we will most likely find ourselves in 2013.
O2 Statement to PC Pro .
"We are naturally disappointed as we believe EU legislation gives us the immediate right to use 2G spectrum for 3G services. However, we are encouraged by the Tribunal’s view that it would be 'a tragedy if yet further legal wrangles caused more delay'.
The Tribunal agrees with us that speedy liberalisation is in the best interest of UK consumers."
The Tribunal’s final judgment was handed down on 7th October 2010 and upheld Ofcom's original decision, which sought not to take any further action at this time (i.e. waiting for the government to adjust the rules as required). At the very least this case should encourage the government to get a move on and resolve the issue as soon as possible.