Everything Everywhere Disputes 4G Auction Plans

The 4G auction next year is facing fresh operator concerns after the UK’s largest mobile operator, Everything Everywhere, admitted it had ‘fundamental disagreements’ with Ofcom.

Ofcom announced back in March its plans to auction 800MHz spectrum for 4G mobile services in 2012. It will also auction off some 2.6GHz spectrum, an event expected to take place in the first quarter of next year. The auction will mark the arrival of 4G technology in the UK, and is expected to fuel an explosion of next-generation services and applications.

Ofcom has already set strict maximum and minimum limits to the amount of spectrum which can be bought by any one operator, in an attempt to maintain competition in the market and allay fears that the auction could squeeze out smaller players, such as 3UK.

Operator Jockeying?

But now Everything Everywhere, which is now the UK’s largest mobile operator following the merger of Orange and T-Mobile UK last year, has also stepped in to voice its own concerns.

Specifically the operator is concerned that under Ofcom’s current proposals, the auction will favour Vodafone and O2.

This came after Kip Meek, the company’s Director of Public Affairs, told the Telegraph newspaper that parts of the spectrum best suited to offering new services risked being disproportionately held by Vodafone and O2. Meek is no stranger to controversy, or spectrum allocation – after a spell as chief policy officer at Ofcom itself, he became a board director at Phorm, the packet inspection firm at the centre of a BT trial which breached privacy laws, and then became head of the BBC-controlled Project Canvas Internet TV project, which has become YouView.

“The way the auction rules could play out now, it is perfectly possible Vodafone and O2 will have five times as much sub-1Ghz spectrum as either Three, Everything Everywhere, or anyone else”, he was quoted as saying. “That five to one ratio isn’t an effective redistribution.”

“We welcome Ofcom’s proposal for the forthcoming spectrum auction as it provides a clear opportunity for the industry to move forward to serve consumers better,” said Everything Everywhere when approached by eWEEK Europe UK. “There is much to commend in their approach which accepts the notion that all spectrum is not equal and that access to low frequency spectrum is a competitive necessity.”

Areas Of Concern

“However, whilst we agree with the overall design of the proposals, there are several of Ofcom’s detailed proposals we disagree with fundamentally,” it said.

“Unmodified, we believe that they will limit competition amongst the operators by undermining the long term prospects of the MNOs who do not currently hold critical sub-1GHz spectrum, which offers significant cost and service advantages. This will not be in the best interests of the UK consumers,” it added.

Everything Everywhere is therefore requesting new proposals that would still leave rivals with twice as much of the vital spectrum.

This includes “increasing the minimum amount of sub-1GHz spectrum to 2×10 MHz to ensure that all operators have sufficient sub 1GHz spectrum to allow them to deploy LTE with the confidence to offer sufficient capacity, coverage and speed.”

“The current proposals for the sub 1GHz spectrum do not significantly reduce O2 and Vodafone’s dominance in the market as the only holders of this spectrum,” it said

It also suggests that Ofcom impose a cap on spectrum, and that it should be set at 2×120 MHz, to take into account the different characteristics of low and high frequency spectrum and differing numbers of customers (including MVNO customers) on each operator’s networks.

Ofcom Response

It also wants Ofcom to set the annual fees for 900MHz and 1800 MHz in a way that reflects more accurately their respective properties.

“We welcome engagement in our public consultation on the auction of new mobile spectrum at 800 MHz and 2.6 Ghz,” an Ofcom spokesperson told eWEEK Europe UK. “We look forward to considering the evidence and comments that are being made available to us.”

Ofcom will publish the responses it has recieved to its 4G auction proposals later this week.

Nonsensical Argument

But a Vodafone spokesman told eWEEK Europe that Everything Everywhere already has enough spectrum to run LTE, as the European Commission has already made plain.

“While we understand Ofcom’s desire to ensure that the UK remains one of the most competitive mobile phone markets in the world, to do that by giving the largest player in that market control over even more of the nation’s airwaves seems completely nonsensical,” said a Vodafone spokesperson:

“The European Commission has already requested that Everything Everywhere sell some of its spectrum holdings to prevent a distortion of competition, so it would be odd if the effect of the rules that Ofcom lays down for the forthcoming auction was to guarantee it even more.”

Last week Ofcom warned that the arrival of 4G services in the UK could well impact some digital TV signals. In some cases it could see householders having to fit filters to their TV aerial.