Government plans new broadband wireless auction

With the 28GHz auction still failing to attract any new bids, the government is hoping to persuade telecoms companies to splash out on a 3.4GHz licence instead

The government is gearing up to sell off another part of the UK's radio spectrum in an attempt to boost the availability of wireless broadband Internet access services.

The Radiocommunications Agency announced on Monday that it is proposing to hold an auction of licences in the 3.4GHz spectrum. No date has been set for an auction, but if it does go ahead the licences would allow telecoms companies to provide always-on, high-speed wireless Internet services, and could be a way of bringing broadband to rural areas.

Under the Radiocommunications Agency's plan, 15 licences will be made available. Seven licences cover major metropolitan areas within England, Wales and Scotland, with a further seven licences dividing up the rest of the mainland UK. One licence will cover the whole of Northern Ireland.

These licences will be awarded by an auction process, even though the government has attracted criticism following its 28GHz and 3G auctions.

The first 28GHz auction, held in November 2000, saw only 16 of the 42 available licences taken up. A second auction of the remaining 26 licences has been running for some six months, and has failed to attract a single bid.

Despite this, the government is confident that a 3.4GHz auction would be a success. "We're already had a number of expressions of interest from the market," said a spokesman for the Department of Trade and Industry (DTI), who told ZDNet UK that the proposed auction was part of the government's commitment to promoting broadband in the UK.

"The 3.4GHz frequency band can be used to provide services for small and medium-sized businesses and high-end consumers at speeds similar to ADSL," the DTI spokesman said.

Similar comments were made by e-commerce minister Douglas Alexander last summer when he kicked off the second 28GHz auction. Alexander said that 28GHz would give small firms "fast, always-on access to the Internet and high capacity data transfer between offices and customers," and added that consumers would also benefit from being about to "access Internet services quickly and efficiently, with costs kept low." Telcos, though, do not appear to share Alexander's confidence.

It's unclear how much a 3.4GHz-based broadband service would cost, but to be commercially attractive it would have to be no more expensive than a satellite broadband service.

BT's satellite broadband package costs at least £60 ex. VAT per month, and also involves installation fees of at least £899 ex. VAT. A cheaper "one-way" satellite package is currently being trialled.

One company, Tele2, already offers wireless broadband services in a number of metropolitan areas of the UK, but while it plans to increase its presence, its services will remain confined to towns and cities.

Interested parties have until 30 May, 2002 to respond to the Radiocommunications Agency's plans.

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