Ofcom Unveils Proposal for Major Spectrum Award for Mobile Broadband Services
LONDON -- The U.K. Office of Communications said it will auction 250 MHz of spectrum next year for 4G mobile services. The “largest ever single award” will include spectrum in the 800 MHz and 2.6 GHz bands, Ofcom said Tuesday. Part of the 800 MHz band freed up by the digital switchover will be used for next-generation mobile services in rural areas, it said.
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The government asked Ofcom to assess likely future competition in the U.K. mobile market, so the regulator looked at national and subnational operators, resellers and mobile virtual network operators, Ofcom Spectrum Policy Director Graham Louth said Tuesday at the IIR Telecoms Regulation Forum in London. The consultation has come to several provisional conclusions, he said. One is that the country’s four-player national market should continue, though new players are welcome, Louth said.
Review of the mobile market also led Ofcom to believe that holding the right amount of spectrum is important to players, and access to suitable spectrum is key to competitive subnational networks, Louth said. Wholesale regulated network access isn’t needed if there are at least four players, he said.
Spectrum holders should have enough bandwidth to be credibly capable of offering high quality data services in the future, Louth said. Ofcom’s proposal said it would achieve that by using spectrum “floors” in the auction that will disregard any potential outcome in which a minimum number of licensees don’t win at least the minimum amount of spectrum. Competition in the auction will determine how much spectrum each bidder wins, which could exceed the minimums Ofcom plans to set but will serve as a backstop, a consultation document said.
The regulator also recommended capping the amount of spectrum that each bidder can win, to give buyers flexibility to express their preferences while avoiding uneven outcomes that could suppress competition. Ofcom is proposing to allow up to 10 competitors to bid to use some spectrum in the 2.6 GHz band for shared, low-power uses, Louth said.
The plan envisions a 95 percent coverage obligation on one of the 800 MHz licensees, Louth said. The operator will have to make 2 Mbps available to 90 percent of indoor locations, he said. For mobile broadband to be useful, it must get into buildings, Louth said. A problem with the 95 percent coverage obligation is that large parts of the U.K. could still miss out on mobile broadband, so Ofcom has also asked whether it should include a requirement on the same licensee to ensure a minimum coverage level everywhere, he said.
Ofcom also proposed liberalizing the use of mobile frequencies at 900 and 1800 MHz and 2.1 GHz for LTE and other technologies as soon as possible after discussions in Europe. It will have a better idea after the auction about the market value of 800 MHz and 2.6 GHz spectrum, which will help it work out how much to charge licensees for 900 and 1800 MHz spectrum, Louth said.
Other issues that Ofcom wants comment on include what non-technical license conditions are likely to promote the best use of the spectrum; which spectrum-packaging and auction design are most likely to support the most efficient assignment of the spectrum; and how to spur competition in the mobile market after the auction.
Comments are due May 31. Ofcom plans to develop regulations this year and invite applications to bid in Q1 of 2012, Louth said. The auction is expected to end the next quarter, he said.
It’s a “very interesting package of proposals,” said Regulatory Counsel Robyn Durie of Everywhere Everything, the joint U.K. business of France Telecom and Deutsche Telekom, saying she was speaking for herself. She praised Ofcom for not reserving spectrum specifically for new entrants or treating them differently, and for letting the market decide whether the 2.6 GHz band should be used for low-power uses.