Spectrum caps call as Digital Dividend auction looms

Summary:It's 3 versus Vodafone in the spectrum auction policy face-off...

It's 3 versus Vodafone in the spectrum auction policy face-off...

Mobile base station: Seminar hears calls for spectrum caps ahead of Digital Dividend auction

Seminar hears calls for spectrum caps ahead of the Digital Dividend and 2.6GHz spectrum auctionsPhoto: Shutterstock

There have been fresh calls for caps on the amount of spectrum any one operator can own to encourage newcomers to enter the wireless fray - and shake up the UK's mobile landscape.

Speaking at a Westminster eForum Keynote Seminar in London on Tuesday, professor Martin Cave of the London School of Economics told delegates: "My great fear is that in 30 years' time we'll have four mobile operators [3, Everything Everywhere, O2 and Vodafone] in this country - and they'll be exactly the same as they are now."

"I think that would be a huge loss of potential innovation," he added.

As the appetite for mobile data increases, the biggest UK release for years of the radio spectrum for carrying that data is looming. The auction for the Digital Dividend spectrum released by the switchover from analogue to digital broadcast is due to take place next year.

The UHF Digital Dividend band spectrum lies in the frequencies 470MHz to 862MHz and is especially coveted by mobile operators because transmissions can cover large geographical areas with relatively few transmitters, meaning networks are cheaper to build. Spectrum in the 2.6GHz band is also up for grabs next year.

The next generation of mobile network technology - long-term evolution (LTE) - requires spectrum, as do alternative next-gen mobile broadband technologies such as mobile WiMax. But none of these technologies can properly get off the ground without suitable airwaves - and that means all eyes are on the forthcoming auction.

Cave, who is the author of two independent reviews for the UK government on spectrum reform, said the UK's spectrum landscape has been "a story of delay" since the year 2000 when the original 3G auction took place, noting that existing operators have turned to lawyers to stall further spectrum releases to protect existing businesses.

These delays are likely to have slowed the development of new wireless services in the UK, in Cave's view. "We don't want to have a situation in which the existing suppliers just roll over from one generation to the next," he told delegates at the seminar. "A policy which is designed to promote entry is quite justified."

Brian Potterill, director of telecoms, media and technology strategy at professional services company PricewaterhouseCoopers, also spoke up in support of spectrum caps. "We really do need to look at spectrum caps," he told delegates. "Otherwise we're trying to solve the competition issue with a market process and it simply won't work."

Potterill warned there is also confusion over the ultimate aims of the Digital Dividend auction. "Are we trying to make money [for the Treasury]? Are we trying to create an industry structure that works for the economy?" he said.

The original 3G auctions netted some £22bn for the Treasury - a sum the current cash-strapped coalition might be forgiven for coveting. Yet encouraging similarly massive outlays for new spectrum licences would present a barrier of entry that could inhibit innovative newcomers from entering the market and crowd out smaller players.

There are also social considerations when it comes to spectrum releases: should Ofcom be setting coverage requirements on any new spectrum to ensure rural or less populated parts of the country don't miss out on the resulting technology benefits? It is just such issues the government and telecoms regular have to resolve as the spectrum auction looms.

Last month, Ofcom unveiled proposals to...

Topics: Networking

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