In Poland's new 4G auction, operators are getting excited - and critics getting more critical

Deciding the fate of two slices of LTE-compatible spectrum is getting many hot under the collar.
Written by Michiel van Blommestein, Contributor

Prospective bidders have only a few days left to send in their initial bids for parts of the 800Mhz and 2600 MHz bands in Poland's upcoming LTE auction.

But while the large operators and the government are itching to get things moving, others believe the spectrum auction process will exclude access to broadband mobile internet and might even lead to corrupt or anti-competitive behaviour.

After an earlier botched attempt to sell off 19 blocks of LTE-compatible spectrum (five in the 800MHz band, 14 in the 2600MHz band), the Polish regulatory body UKE restarted the auction process last month. The deadline for first bids to be filed is Monday, and will serve to give the UKE a steer on the auction will run – the most popular spectrum blocks, who's likely to bid in the subsequent rounds, and so on.

The UKE reckons the auction will bring a sum between PLN 1.5bn and 3bn (€375m to €750m). So far, local operators Polkomtel, P4, Orange, and T-Mobile are thought to be lining up bids.

The auction procedure will be both complex and demanding, with twenty separate parties having sent in recommendations on how it should be conducted. "After the deadline on which initial offerings [first bids] can be sent in, the president of the UKE will publish a list of those bidding," a UKE spokesman told ZDNet. Only after that, a full schedule for the spectrum selloff will be determined. The first formal bids will be tabled, a 'test auction' will be completed, and then a second round of formal bids will start, according to the UKE.

The process has seen its fair share of criticism. Ludwik Dorn, a former interior minister, sent an open letter to the Polish government urging it to call off the auction for the 800 MHz band and to start an investigation by the Polish anti-corruption agency CBA into the process and those likely to bid. He argues that such a move is necessary as a director of one of the companies set to take part in the auction, Orange, is under investigation under the so-called Infoafera investigation. Following the letter, it was announced that the CBA would monitor the auction, and a number of agencies, the CBA among them, will be instructing the UKE officials coordinating the auction on how to prevent any possible corruption.

Dorn's letter also highlighted that the format of the auction will be a danger to network accessibility for less developed, rural areas – an issue others have spoken out on. Similar concerns have been raised by a former director of the UKE, as well as the UOKiK, the main consumer protection body in the country.

Criticism has also come from the Free and Open Source Software Foundation: "I firmly believe it would be beneficial for our communication landscape if there would be more open spectrums," says Michal Wozniak, board member of the organisation. "This particular auction is going exactly the opposite direction. While I appreciate how mobile carriers allow us to communicate right now, and that you need huge companies to cover huge swaths of terrain, I also see that we still have large areas uncovered by mobile signals."

While the auction's stated goal is to provide coverage everywhere, Wozniak doubts operators will bend over backwards to cover remote areas with LTE where profits would be modest at best. "I doubt any provider will offer LTE services in the Bieszczady mountain ranges. If parts of the spectrum were to be free, local governments could for example decide what smaller parties are best suited to providing services needed in that specific terrain. Providing coverage on the plains is a different game than doing so in the mountains."

According to Wozniak, opening up any small part of the spectrum would do, and that the rest can be sold to the highest bidder. "In the last 30 years, many communication problems have been solved by small, innovative parties, so maybe they should have a chance to have a go on the LTE front."

Decentralised communication could avoid future injustices, he says, citing the 2011 Tahrir Square protests in Egypt as an example. "We saw it in Egypt, where centralised telecom networks were shut down while more decentralised, grassroots means were still available for keeping the information flow."

Wozniak highlighted that Poland in the 1980s saw a similar situation to the recent upheaval in Egypt. "We need means of communication, regardless of who is in charge," he said. Wozniak realises chances of his arguments getting through are almost nil, however: "I am saddened that those in charge didn't open this matter for discussion at all."

In contrast to the first attempt to sell off the spectrum earlier this year, this time round companies seem to be happy with the process. Lewiatan, the main association of employers, has lauded the auction, and Jeremi Mordasewicz, an adviser for Lewiatan, cites estimates by Deloitte that the Polish GDP might gain PLN 106bn (€27bn) up to 2020 as a result of the auction, and that it will help the country meet European goals to make broadband connectivity accessible to everyone.

At the time of writing, only Orange replied to ZDNet's request for comment on the auction and the criticism it has received. "Orange Polska expects a fast and transparent process in the handing out of the frequency bands which guarantees competition in the market," a spokesman wrote. "That would be in the interest of the market as well as customers who are waiting for the speedy activation of services using the 800MHz band."

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