The new government minister responsible for Digital Britain, Ed Vaizey, has prodded Ofcom to get on with the long-awaited and much delayed auction for spectrum in the 2.6GHz and 800MHz bands. This is to be applauded, but it does not amount to much more than was already, albeit slowly, in train.
Unbelievably, Ofcom initially announced its plan to auction this radio spectrum as early as December 2006. The plan called for 20-year licences for 215MHz in three spectrum bands (2500-2690MHz, 2010-2025MHz and 2290-2300MHz), which would form part of a wider program to release around 400MHz of spectrum including spectrum freed up by the switchover to digital TV. Licences were initially to be capped at 80MHz each (or up to 90MHz in the case of a split, unpaired assignment that contains two restricted lots). The initial auction date of mid-2008 was put on hold following legal challenges by O2 and T-Mobile, which both claimed that without knowing whether re-farming of the 900MHz spectrum band would be allowed they could not calculate how much of the 2.6GHz and 2010MHz expansion band they would need.
Progress was made in June 2009 when T-Mobile withdrew its legal challenge, leaving O2 to contest alone. Soon afterwards, Ofcom pushed the auction to 2010, in the wake of the government’s Digital Britain report recommendation to bundle the 2.6GHz and digital dividend spectrum in the 800MHz band into a single auction. Ofcom also proposed a temporary cap on spectrum holdings, at 2x60MHz for overall mobile FDD spectrum. Existing holders of sub-1GHz frequencies would also face a cap, so in order to obtain 800MHz frequencies they must give up 900MHz holdings. The caps would expire a year after the combined spectrum auction. The latter cap applies to Vodafone and O2, who each hold 2×17.2MHz in the 900MHz band. Orange and T-Mobile each have 2x30MHz at 1800MHz. While they could bid for 800MHz or 900MHz given up by the other two operators, to remain under the cap they could only bid for 2x10MHz of the 2.6GHz frequencies. 3 and any new entrants can bid for any of the spectrum, within the limits of the auctions.
Tying 2.6GHz with 800MHz spectrum only made things more difficult for Ofcom. The 800MHz spectrum is part of the digital dividend. In 2003 the government envisaged releasing 112MHz when digital switchover was complete, in two distinct bands: an upper band of 48MHz and a lower band of 64MHz. Since then, two further channels were cleared, providing a total of 128MHz of spectrum. However, much of Europe intends to release 72MHz at 790-862MHz (channels 61-69, also known as the 800MHz band). Thus far, Finland, Sweden, France and Switzerland have released the whole 800MHz band as their digital dividend, largely to be used for mobile broadband services. To follow suit (releasing the whole 800MHz band) the UK had to clear channels 61, 62 and 69, which had originally been allocated for digital terrestrial TV, program-making and special events. The cost of providing different spectrum for the services is expected to be met either by licensees in the 800MHz band or by the government.
In February 2010 the regulator again deferred making decisions on the auction until the end of the year, pending discussions by the Electronic Communications Committee (ECC), the European Conference of Postal and Telecommunications Administrations (CEPT) and the European Telecommunications Standards Institute (ETSI) regarding co-channel sharing between GSM-R, short-range devices (SRDs) and radio-frequency identification (RFID).
So the government has finally put an end to this silly prevarication, by tasking Ofcom to get on with the job and proceed with the combined 2.6GHz and 800MHz auction and the refarming of 900GHz spectrum Yet despite the government’s intervention, the auction will still not take place before the end of 2011 at the earliest. Given that operators would not have access to the bands before 2012, this would leave the UK behind many other parts of Europe: Denmark, Finland, Germany, Norway, the Netherlands and Sweden have already awarded 2.6GHz spectrum, and some countries now use it commercially.
One significant policy change is that 3G licences would be tradable and essentially indefinite (in a bid to encourage investment in networks and technologies): after the initial licence term ends in 2021 there will be an annual fee set according to the current market value of the licences.
By 2012, the UK would be one of the last in Europe to have released digital dividend spectrum. True, it would be (just) within the time limit set by the EU for regional ASO, but the frustration for operators is palpable, particularly since the government is also talking long and hard about its commitment to Digital Britain and to the wonderful broadband future for all.
The experience of one mobile operator speaks volumes: Clear Mobitel, which this month began trialling LTE technology in the 800MHz band in eastern Cornwall, took a full 12 months to secure its trial licence. This is despite the fact that it is testing broadband connectivity in an existing ‘not spot’ zone, where the spectrum was released in the region following the switch to digital broadcasting as early as April 2009.
Although Ofcom has been prodded to get a move on with the auction, the likely date has not been brought forward. In the meantime, the UK remains the laggard in Europe, slowing moving in the wake of other countries which long ago viewed mobile broadband as a pressing concern, and so provided spectrum for it quickly.
For more information on the UK’s mobile market, see:
United Kingdom – Mobile Market – 3G, Mobile Data & Forecasts;
United Kingdom – Mobile Market – Overview, Statistics & Forecasts.