Government claims success as broadband auction closes

UK Plc is £7m richer, and three operators can now offer wireless broadband services at 3.4GHz in the UK. But will they?
Written by Graeme Wearden, Contributor

The 3.4GHz spectrum auction ended on Tuesday with Hong Kong telco Pacific Century CyberWorks (PCCW) winning all but two of the licences on offer.

The government has already declared the auction -- which raised a total of £6,955,000 -- a success. According to e-commerce minister Stephen Timms, the sale of all 15 licences is an important part of the government's overall broadband strategy.

"The aim of the auction was to see the licences in the hands of the operators best able to take advantage of them, and in turn, to see consumers -- including those in areas currently without ADSL or cable -- benefit from fixed wireless broadband access," said Timms in a statement.

"Our aim is to make sure every community in the UK, regardless of location, should have the opportunity to access affordable broadband services," Timms added.

Some in the industry, though, believe the auction cannot be declared a success until the 3.4GHz spectrum is actually being used to provide homes and businesses with broadband connectivity.

Somewhat controversially, the licences do not include any rollout obligations or service restrictions, so winning bidders could in theory just sit on their assets, or use them for another purpose -- such as carrying mobile network traffic.

PCCW's capture of 13 licences mean the telco can now operate wireless services at 3.4GHz everywhere in the UK apart from the metropolitan North of England -- including Manchester and Liverpool -- and in rural Southern England.

Two UK-based firms took these licences -- the northern licence was won by Red Spectrum, while the southern licence was won by Public Hub.

PCCW had been expected to try and win all 15 licences, and it isn't completely clear why it didn't. Sources close to the auction process have claimed that PCCW made an error during the bidding that meant it could only win 13 licences. PCCW has not responded to requests for comment on this matter.

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