Operators deny 4G litigation threats
Mobile operators have denied making legal threats to hold up the 4G spectrum auction process, as Ofcom chief Ed Richards accused them of doing.
Richards said on Tuesday that "incumbent mobile operators have chosen to entangle this process in litigation or threats of litigation". He said the threats, which had led the regulator to extend its consultation period on the auction rules, were strategic and showed a "willingness to game the system".
Everything Everywhere insisted on Wednesday that it had never threatened legal action in the auction process, and had simply submitted recommendations for how the auction should be run.
"We believe that the 4G auctions should be held as soon as possible so the benefits of faster data speeds reach consumers quickly. We understand though from Ofcom that the complexity of the issues means that further consultation is necessary," an Everything Everywhere spokesperson said.
The auction was originally supposed to take place in 2008, but has been delayed multiple times by legal action or the threat thereof. It is now scheduled for late 2012, putting the UK far behind many other countries in terms of 4G deployment, and the government has begged the operators to stop fighting and allow the auction to go ahead.
It is certainly true that Everything Everywhere has never launched legal action around the auction — the company has only existed for a year and a half — but its predecessor T-Mobile UK was one of the first operators to stall the process through the courts.
The original delays took place because the issue of spectrum refarming — reusing 2G 900MHz spectrum for 3G services — had not yet been sorted out, leaving some operators unsure of how much they valued the new 800MHz and 2.6GHz spectrum for rolling out mobile broadband services.
The old 2G spectrum is still key to the fights that are going on. T-Mobile and Orange, or Everything Everywhere, have 1800MHz spectrum while Vodafone and O2 have 900MHz spectrum. The latter type can be refarmed as it has similar qualities to the new 800MHz 4G spectrum — both offer good performance over long distances and in-building penetration.
That is why Ofcom's proposed auction rules would force Vodafone and O2 to give up some of the 900MHz spectrum they own if they want to buy a substantial amount of 800MHz spectrum. However, Everything Everywhere is still not happy.
"We stand by our recommendation that to ensure fairness, the auction is designed so that all operators — not just Vodafone and O2 — get access to sufficient low frequency spectrum. The sooner this is resolved, the better for all of our customers," Everything Everywhere's spokesperson said.
Vodafone said it was not keen on litigation and just wanted the auction to go ahead.
"There is much to commend in Ofcom's initial proposals for the auction of new spectrum next year, but there is still work to be done to ensure the auction is a success," Vodafone said. "We think there should be a level playing field between operators and a fair auction that provides UK consumers with the most competitive market for 4G services."
Vodafone added that it has "no desire to become involved in litigation and there shouldn't be any need for litigation if the hard work is done now to get the rules right".
"Unlike some of our rivals, Vodafone is not a serial litigator. In the last eight years, we have only appealed two Ofcom decisions and we have actually supported Ofcom in the courts on ten separate occasions," the operator said.
Approached for comment on Tuesday, O2 did not say whether or not it had threatened litigation, but it did say it had used the extended consultation process to highlight flaws in Ofcom's approach.