Posted: 26th Jul, 2011 By: MarkJ
The
Communications Consumer Panel (CCP), an independent watchdog that seeks to champion consumer interests within the UK telecoms industry, has proposed that some of the money created by Ofcom's forthcoming auction (
here) of next generation superfast Mobile Broadband spectrum (
800MHz and
2.6GHz) should be set aside for
subsidising extended mobile coverage to 98% of the country.
The Consumer Panel advised:
"In our consultations with mobile operators and others they have said that current 2G coverage is at its commercially economic limit and is unlikely to be significantly extended and that 3G and 4G services are unlikely to extend significantly beyond the current 2G footprint without some intervention to impose more stringent coverage conditions or to fund increased coverage in commercially unattractive areas.
....
None of the £22bn raised by the [previous] 3G auction was used to provide improved coverage for consumers. We believe that, this time around, significant sums should be set aside from the windfall to the Treasury to provide coverage benefits to consumers and citizens.
In the recent Parliamentary debate on this issue, a figure of 1400 new base stations at an approximate cost of £250m was mentioned as a means of achieving 98% coverage. This would require verification but we consider that a sum of money of at least this order is necessary to provide satisfactory coverage at this level. The sum required, although large, will be small in comparison with the overall revenue generated by the auction."
Ofcom claims that the bands currently up for grabs amount to three quarters of the mobile spectrum that is in use today and should significantly
widen the coverage of mobile broadband to 95% of the UK population.
However the regulator fears that imposing additional obligations, as recently proposed by
Rory Stewart MP (
here), could result in operators paying less for the related spectrum. A subsidy from the auction money would be one way of overcoming that.
In reality
Ofcom has very little power over what actually happens to the money itself, although it could propose such a solution if it so wished. The UK government probably has its own ideas about where that cash should go, although its ability to pre-allocate it would be constrained because they don't know the final sum.
Ofcom intends to
start the auction in Q1-2012, subject to its current consultation, with the first 4G services being expected to surface towards the end of 2013.