Sunday, 24 September 2017

3UK confirms Ofcom legal challenge

By Nick Wood, Total Telecom
Thursday 10 August 17

Mobile operator to seek judicial review of spectrum caps; insists it will not delay launch of 5G services.

3UK has confirmed plans for a legal showdown with Ofcom over its 5G spectrum auction rules. In a statement emailed to Total Telecom on Wednesday, a spokeswoman for the operator said it will seek a judicial review to challenge the regulator's plans for allocating 2.3-GHz and 3.4-GHz spectrum. "We feel it is a proportionate response to request an independent review of Ofcom's proposal…

3UK has confirmed plans for a legal showdown with Ofcom over its 5G spectrum auction rules.

In a statement emailed to Total Telecom on Wednesday, a spokeswoman for the operator said it will seek a judicial review to challenge the regulator's plans for allocating 2.3-GHz and 3.4-GHz spectrum.

"We feel it is a proportionate response to request an independent review of Ofcom's proposal, which we feel unduly puts at risk its stated objective of a competitive four-player market and is to the detriment of U.K. consumers," the spokeswoman said.

Ofcom's auction rules, issued in July, cap the amount of immediately usable spectrum that any one operator can hold at 255 MHz. They also cap the amount of spectrum expected to be usable by 2020 at 340 MHz – equal to 37% - per operator.

It means BT and its EE arm, which currently hold around 42% of mobile spectrum, would be prevented from bidding for 2.3-GHz spectrum, and limited to acquiring no more than 85 MHz of 3.4-GHz spectrum.

Vodafone, which holds around 29% of the U.K.'s mobile spectrum, would be restricted to bidding for a maximum of 160 MHz of spectrum across both the 2.3 GHz and 3.4 GHz bands.

"Our auction will help support the U.K.'s four-player mobile market, which has provided choice and value to customers for many years," said Ofcom, in a statement on Wednesday.

However, 3UK argues that the caps do not go far enough to address the country's spectrum imbalance, and has called for a spectrum cap of 30%.

"It is absolutely vital that the regulator gets this auction right for the long-term benefit of all consumers," said 3UK's spokeswoman, on Wednesday.

The operator confirmed a Daily Telegraph report earlier this week that claimed 3UK had sent a formal letter to Ofcom about the impending legal challenge.

"Ofcom are aware of the decision," the spokeswoman said.

Last week, 3UK CEO Dave Dyson said a final decision had yet to be made, and he was at pains to emphasise that a judicial review would not take very long, and would therefore not disrupt the U.K.'s 5G ambitions.

"We anticipate a short process and a court decision by early 2018. Ofcom does not expect commercial services in the U.K. before 2020, so this short process will not impact the availability of 5G to U.K. consumers," 3's spokeswoman said.

But if 3UK's judicial review is successful, there could conceivably be appeals by rivals, and Ofcom may also have to consult on any proposed rule changes, which could attract challenges from players that don't agree with 3UK's point of view.

Ergo, a three-month judicial review could merely be the start of a much more protracted and acrimonious process.

"We want to see new spectrum in use as soon as possible, so operators can build for the future and the U.K. can start benefiting from 5G mobile by 2020," Ofcom said.

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