Ofcom pushes ahead with spectrum auction despite legal hold-up

Telecoms regulator Ofcom will start to lay the groundwork for the auction of mobile broadband spectrum in the 2.3GHz and 3.4GHz bands despite the possibility of a successful legal appeal against it, saying it is not in the public interest for the auction to be delayed any longer.

The auction was supposed to have happened in 2015, but was put on hold at the end of that year because of the uncertainty created in the market by BT’s acquisition of EE. The regulator tried to get things back on track in 2017 but found itself stymied by objections from smaller operators – including Three – which claimed that the combination of BT and EE controlled too much of the existing spectrum and that its purchasing power should be capped.

In December 2017, the High Court dismissed legal challenges by BT-EE and Three over the terms and conditions of the auction. Since then, Three has sought and received permission to take its case to the Court of Appeal. This new hearing will be subject to an expedited process and is due to take place on 13 and 14 February 2018.

In a statement, Ofcom said it considered it was in the public interest for the auction to take place as soon as possible, thanks to skyrocketing consumer demand for network bandwidth and the potential to use a tranche of the available spectrum to immediately beef up existing 4G networks.

“The litigation by Three is continuing to delay access to the spectrum and the benefits to consumers and businesses that can flow from it,” said the regulator. “We are keen to ensure that we are in a position to move as quickly as possible to hold the auction, once the judgment of the Court of Appeal has been given.”

Ofcom will therefore proceed to lay out the auction regulations – set to happen on 24 January – to enable it to get on with the preliminary steps to hold the auction, such as inviting applicants and receiving their deposits, which will have to happen whether or not the Court of Appeal upholds the High Court’s ruling.

This means that should the Court of Appeal rule in Ofcom’s favour, the process will be slightly ahead of where it would otherwise be. If it has to make any changes in the light of the court’s judgment, it will do so with “utmost expedition”, the regulator added.

Mark Evans. CEO of Telefónica UK, which owns the O2 mobile network, said his position all along had been that the auction should take place as soon as possible.

“Delays are not in the interests of consumers, businesses, or UK plc,” he said. “Ofcom’s announcement is therefore to be welcomed, especially as there are frequencies that can be used immediately to improve customer experience, boost investment in digital connectivity, and deliver economic growth.”