MPs call for action on 4G auction delays

Committee calls for spectrum windfalls to benefit public

Stewart Mitchell
3 Nov 2011

A group of MPs has called on the UK mobile phone operators to quit squabbling and get on with rolling out 4G networks.

In a report published by the Commons Culture, Media and Sport Committee, the MPs also questioned whether Everything Everywhere should be able to profit from selling some of the spectrum it currently holds under license.

The criticism comes weeks after Ofcom pushed back – for a second time – the 4G auctions designed to allocate spectrum to the service providers to improve mobile networks.

Ofcom blamed the delay on “a number of substantial and strongly argued responses” from industry players.

Constant disagreement and special pleading from the four mobile network operators appears to have further delayed the spectrum auction

"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,” said John Whittingdale, MP and chair of the committee.

“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. The auction needs to proceed as soon as possible.”

Second-hand spectrum for sale

Part of the argument revolves around how spectrum that is already in use could be re-used and sold off by operators with more spectrum than they need - a situation faced by Everything Everywhere, the offspring of the joint venture between T-Mobile and Orange networks.

The committee warned that the sale by Everything Everywhere of some of its spectrum would result in the company making a substantial profit from a public asset that was granted to it for free during second-generation rollout.

The MPs believe any windfall should be put into a fund to encourage public service rollouts to rural areas currently without mobile internet or phone coverage.

“Where a mobile provider is set to gain a windfall from the sale of what was originally a public asset, the Government and Ofcom should find a way to ensure that at least some of the proceeds are invested for public benefit,” Whittingdale said.

“We believe that Ofcom needs to go further than it currently proposes by setting a condition that at least one of the new licence holders must achieve 98% coverage across the country."

The call echoes demands by a cross-party group of MPs that said Ofcom should force carriers to push services further into rural areas.

Carrier makes £33m a year payment

Everything Everywhere said it would work with the Government on the issue but said it was being forced to sell the spectrum as part of its merger and that the UK already benefited from the payments it made.

"As part of the merger of Orange and T-Mobile to create Everything Everywhere, we are required to sell some 1800MHz spectrum, for which we pay £33 million in license fees to government each year," the joint venture said.

"It is our intention that all proceeds from the sale of this spectrum will be invested into our UK network to benefit our customers across the country."

Read more about: