A UK parliamentary committee has criticised mobile operators for fighting over how to share the next-generation 4G spectrum, as two major networks threaten legal action over the impending auction.
What appears to be a ’scuffle in the playground’ on an industrial level, the Commons’ Culture, Media and Sport select committee urged the mobile operators to speed up the auction process.
As the UK is on track to be the last European country to adopt a 4G spectrum auction, the UK’s communications watchdog Ofcom hopes to hold the sale next year.
MP John Whittingdale, the committee’s chair, said: ”Ofcom has had a very difficult job adjudicating between competing and polarised interests, and we are concerned that constant disagreement and special pleading from the four mobile network operators appears to have further delayed the spectrum auction.”
“We believe that the basic rules for the auction which Ofcom has laid down are sensible and fair, and that further delays will result in the UK falling further behind in this vital area. The auction needs to proceed as soon as possible”, he added.
Three says it is at an automatic disadvantage because it holds no share of the current 2G spectrum, while claiming that it was unfair of the UK government to ‘gift’ parts of the spectrum to other operators.
Ofcom wants Three to remain as a competitor to the remaining major networks, and set in place assurances to give Three a slice of the 4G spectrum at a discounted rate. But O2 and Vodafone have threatened legal action over the auction, claiming that “state-aid” would put their networks at a disadvantage.
The committee also said that Everything Everywhere, the UK’s largest mobile operator formed as part of the Orange and T-Mobile merger, would make a substantial profit from the 4G auction, and that it should be compelled to ring-fence some of its return for future investment.
Later this month, all four mobile operators will meet with Ofcom and the UK government to hold talks on the best way forward for how the auction should work.
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