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WiMax spectrum auction set for 2008

Terms of auction for the wide-range wireless technology to be published in October or November
Written by David Meyer, Contributor

Ofcom has revealed more details on its timetable for auctioning off the spectrum that could be used to introduce WiMax on a large scale to the UK.

Peter Bury, the regulator's director of strategic resources, said on Wednesday at the Wireless Event in London that the auction of 192MHz of spectrum, situated around the frequency of 2.6GHz, would happen in the first quarter of next year. The terms for the auction will be published in October or November of this year.

The spectrum in question is highly contentious as it could be used for WiMax, a long-range, high-bandwidth wireless broadband technology which has thus far failed to gain a significant foothold in western Europe due to spectrum availability issues. However, the spectrum could also be used as an expansion band for 3G and its descendent technologies (such as the as-yet-undefined 4G), which also represent a type of wireless broadband. Ofcom's firm stance is one of technology neutrality, which represents a break from the old days of mandating that a certain frequency can only be used for a certain technology.

"Our belief is that wireless service providers may well find that broadband is an opportunity for them," said Bury. "We don't have an opinion on which technology will be successful. We wish them all well." Bury did however concede that, due to falling DSL prices in the UK, it would probably be "tough for wireless solutions to match those kinds of prices". He added that wireless broadband was flourishing in the UK in the public access market, where the country is — globally — second only to Ireland in terms of hotspot penetration.

Bury also discussed the complexity of drawing up terms for the auction. It still needs to be decided, for example, whether the auction will take place over one or more rounds, and how the spectrum will be packaged — he pointed out that the size of the spectrum range on offer would make it unlikely that one bidder would try to buy all of it.

What is certain, though, is that the highest bidder will win. The winner will pay up-front for a 20-year licence, after which the spectrum rights will need to be paid for on an annual basis. Bury denied that Ofcom was "seeking to get a lot of money into the Treasury", but instead insisted that the purpose of the auction was to find which business plan placed the highest value on the spectrum. "Sensible business plans will be funded to the level that makes sense, rather than the regulator favouring one," he added.

In the next month or two, Ofcom will issue a consultation on the issue of "refarming" 2G spectrum. Some operators have called for the rules to be changed so they can use their existing GSM spectrum to carry 3G services, and suggestions have even been raised that certain operators might hold back on bidding for the 2.6GHz spectrum until Ofcom makes a decision on refarming, as this may reduce their need for the new spectrum.

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