Ofcom Confirms 4G Spectrum Auction Delay

Ofcom has delayed the auction of the 4G spectrum after deciding to launch a second consultation process on receiving a “substantial” number of “strongly argued” responses to its first consultation.

“Ofcom has published a statement updating its timetable for the award of 800MHz and 2.6GHz spectrum,” said the UK communications regulator. “This outlines plans to undertake a further round of consultation with stakeholders.”

Auction Statement

“Between March and May of this year we consulted on our assessment of likely future competition in mobile markets and proposals for award of the 800MHz and 2.6GHz spectrum bands,” said Ofcom in a statement. “We received a number of substantial and strongly argued responses to this consultation. We have been reviewing these responses over the summer, and refining our analysis as a result.”

“In light of these responses, and the significance of the decisions that we need to take – decisions that are likely to shape the future of the mobile sector in the UK for the next decade or more, we have decided to undertake a further round of consultation on these issues,” the statement said.

The postponement in the 4G auction comes after Ofcom denied in early September that its 4G auction would be delayed.

The auction process is still on target, an Ofcom spokesperson told eWEEK Europe at that time. This was despite some media reports that Ofcom would miss the November deadline to reveal the auction details.

Slipping Deadlines

“We announced on Friday that we will be holding a second consultation on our proposed design for the 4G auction,” an Ofcom spokesman told eWEEK Europe UK.

The first consultation took place this year, but the regulator was flooded with feedback and complaints from most mobile operators. 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.

“We had hoped to conclude the consultation process before the end of this year, but now because of the substantial consultation responses, we are now hoping to conduct the 4G auction sometime in Q4 2012,” said the Ofcom spokesman.

Appropriate Response

“It is the appropriate thing to do [run a second consultation process],” explained the spokesman, but the decision will not please those looking to 4G as a solution for the UK’s broadband problems.

Last month the culture secretary Jeremy Hunt, pleaded with operators to avoid delaying the auction process any further.

The proposed 4G auction, which has already been delayed for four years by legal challenges, drew sharp criticism of a number of mobile operators in the UK, prompting fears of more disruptive legal challenges. Indeed, the language from the operators has been dramatic.

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

UK Laggard?

Last week, a report from the policy advisory group Open Digital warned that British businesses will lose £730m a year because of the delay in rolling out 4G mobile broadband.

And there is little doubt that the UK is lagging behind other countries when it comes to rolling out 4G. Indeed, this country is four years behind the world’s first LTE deployments in Oslo and Stockholm, and three years behind the first commercial service in the United States.

So how does Ofcom respond to the fact that the UK is increasingly being viewed as something of a 4G laggard?

Ofcom Response

“The first really important point to make in response to that is that the necessary spectrum will only be available in 2013. Some parts of the UK will have the needed spectrum before then, but nationwide, it will only be the end of 2013 that the necessary spectrum will be freed up,” Ofcom told eWEEK Europe.

“Secondly, it is not fair to make direct comparison between the UK and other countries, because the UK TV network, for example, has been heavily dependent on terrestrial digital TV,” said Ofcom.

To be fair, Ofcom has a point when comparing the UK with rival countries, especially when we remember that it is a very competitive and crowded market. At one stage the UK had five major mobile operators (now, four after Orange and T-Mobile UK merged), whereas many other European nations tend only to have two or three major operators.

Ofcom said that it plans to publish a further consultation document around the end of this year. It will then give stakeholders an appropriate period of time in which to comment on Ofcom’s refined analysis and respond to its revised proposals (likely to be at least eight weeks).

Ofcom then hopes to make a decision and publish a statement in the summer of 2012, with the auction following that, likely in Q4 2012.