Ofcom’s 4G auction may yet face legal challenges

Ofcom’s 4G auction may yet face legal challenges

The fabled 4G LTE network that has been promised to UK mobile broadband users appeared to be a step closer last month when the communications watchdog Ofcom unveiled its plans for the auction of the spectrum.

With the sales process and bidding set to begin in early 2013, Ofcom said it is in line with its timetable, even though nation's around the world already offer 4G connectivity to their businesses and individuals.

As the auction of the 4G spectrum will start at the beginning of next year, the watchdog is hopeful that services will be up and running by the end of the year.

The auction process will sell chunks of radio spectrum sold that supports future 4G mobile services, which will allow users to download data such as music and videos at much faster speeds.

Ofcom hopes that at least four wholesalers of 4G mobile services will emerge so that consumers benefit from better services at lower prices.

"In the interests of competition, Ofcom has decided to reserve a minimum amount of spectrum in the auction for a fourth operator. This could be either Hutchinson 3G or a new entrant altogether," Ofcom said.

Everything Everywhere, Vodafone and Telefonica are the three other operators that would be involved, but recent developments may put Ofcom's plans for the auction in jeopardy once again.

The debate about how the spectrum is sold off has been fierce since the plan was announced, with each of the major players involved in the auction threatening to take legal action at one time or another.

"It's a racing certainty there will be objections," said Ofcom's chief executive, Ed Richards, however he noted that the organisation is "fully prepared" for any litigation.

Lawyers from each of the main players have been poring over documents outlining the mechanisms for an auction so complicated it was likened by one network source to "playing four-dimensional chess".

While Everything Everywhere, Vodafone and Telefonica have reacted favourably to Ofcom's auction process, the smallest network in the UK, Three, has declined to comment on the issue, hinting that further litigation threats may be just around the corner.

It appears as though the company would like some protection in the auction and the option to acquire the 800 megahertz (MHz) airwaves, which are more desirable due to their ability to travel further, meaning they require fewer masts.

Ofcom says it wants to ensure the UK has healthy competition in the auction between the four viable networks to keep prices low, but its decision means that Three is likely to come out of the process with the less desirable 2600MHz spectrum at the reserve price rather than lower-frequency airwaves.

These airwaves need a greater number of masts and infrastructure, something which the operator may struggle to provide due to its recent poor performance and financial losses.

"After all the controversy, operators must now put their concerns to one side and get on with the auction process to ensure 4G is delivered as fast as practicably possible," said telecoms research firm CCS Insight.

The longer the regulatory and legal issues go on, the longer it will take for businesses and individuals to access the 4G connectivity 40 other nations around the world are enjoying.