MPs Hit Out At Operators For 4G Auction Delay

MPs have stepped into the 4G auction debate, criticising mobile operators for delaying spectrum allocation

Frustration at the UK’s mobile operators has boiled over, after a committee of MPs criticised them for further delaying the already much-delayed 4G spectrum auction.

The criticism came from the Commons Culture, Media and Sport select committee, and follows the Culture Secretary Jeremy Hunt in September pleading with operators to avoid delaying the auction process any further.

Operator Bickering

“Ofcom has had a very difficult job adjudicating between competing and polarised interests, and we are concerned that constant disagreement and special pleading from the four mobile network operators appears to have further delayed the spectrum auction,” John Whittingdale MP, Chair of the Committee, was quoted as saying by the BBC.

“We believe that the basic rules for the auction which Ofcom has laid down are sensible and fair, and that further delays will result in the UK falling further behind in this vital area,” he added. “The auction needs to proceed as soon as possible.”

Vodafone and O2 had reportedly threatened legal action if the auction went ahead in its current form, but other operators have been equally critical of the auction process.

O2 complained that guaranteeing spectrum to Everything Everywhere (T-Mobile and Orange) and 3UK equates to “illegal state aid”, whilst 3 described the plan as a “boot on its head” that could force it to wind up its operations.

Auction Delay

In October Ofcom officially announced that its auction of 800MHz and 2.6GHz spectrum was to be delayed, after it received a “substantial” number of “strongly argued” responses to its first consultation. The postponement came after Ofcom denied in early September that its 4G auction would be delayed.

Ofcom had initially been hoping to conduct the 4G auction in the first quarter of 2012, but then it slipped to the first half of next year. Now, because of the second consultation round, the auction will not be held until the end of 2012, with commercial deployments expected towards the later half of 2013.

The 4G auction in the UK has already been delayed for four years by legal challenges. This is despite the financial consequences of failing to improve mobile networks. Last month, for example, a survey from the policy advisory group Open Digital warned that the delay in rolling out 4G will cost British businesses £730 million a year.

And there is no doubt that the UK is falling behind other European nations regarding 4G. Indeed, the plan to only start deploying 4G networks in 2013 is 4 years behind the world’s first LTE deployments in Oslo and Stockolm and 3 years behind the first commercial service in the United States.

Meanwhile the EU has recently told member states to get the 800MHz band cleared for mobile broadband by the end of 2012, stating that they must deliver 4G mobile broadband by 2013.

Vodafone Statement

Vodafone, which recently announced plans to extend its femtocell trial into rural areas, told eWEEK Europe that it welcomed the MPs intervention.

“We welcome the Select Committee’s report into spectrum as a timely addition to the debate about this vital national asset,” Vodafone said in an emailed statement. “We note that the Committee agrees that Ofcom’s decision to allow the existing mobile phone companies to re-use their older spectrum for 3G services was ‘a considered decision based on thorough research’ and ‘has not resulted in a significant or permanent distortion of competition’.”

“We share the Committee’s concerns about coverage in rural areas which is why we yesterday called for local communities to get involved in Vodafone’s trial of an innovative technology that has the potential to provide local communities with an affordable way of getting 3G mobile Internet coverage. As the Committee has recognised, we are the only UK mobile phone company that offers this ‘femtocell’ technology,” said Vodafone.

“We look forward to engaging with Ofcom on the details of the auction rules in December and agree with the regulator that there is time for reflection given that the spectrum will not be available until 2013,” it concluded.

Rural Not-Spots

Meanwhile communications infrastructure and media services specialist Arqiva also welcome the MP’s input.

“Using 4G Wireless broadband alongside fibre will ensure that access to broadband for all consumers is achieved cost-effectively,” said Alastair Davidson, MD of government, mobile and enterprise at Arqiva. “Arqiva agrees with the Committee that the proposed 4G coverage obligation of 95 percent of the population should be increased to at least 98 percent.

“Imposing a 98 percent coverage obligation should encourage more infrastructure sharing and collaboration; allowing the provision of multiple mobile operator services in the most cost efficient manner and minimising disruption and the environmental impact for consumers,” he said.