08/10/2011

Ofcom delays auction of 800MHz and 2.6GHz (again)

Ofcom, the regulator that deals with broadcast, media, telecoms, radio and now the postal service has once again delayed the 800MHz and 2.6GHz spectrum auctions which now won't happen until at least the Q4 2012.

The 800MHz band will become available after the digital dividend (i.e. when the analogue television services are turned off in 2012), while the 2.6GHz band was reserved as an IMT-2000 (3G) band for future 3G services (or if the new 3G entrant i.e. 3UK failed and another network was set-up).

Both 800MHz and 2.6GHz are suitable for 3G services as existing phones should be able to use them (multiple band phones), they are also suitable for future mobile services such as LTE (Long Term Evolution) which is better known as 4G.

There is as more spectrum available in the 2.6GHz band than all existing 3G networks have already, however 2.6GHz has poor propogation characteristics as it is easily absorbed by buildings etc. 800MHz on the other hand has extremely good propogation characteristics (analogue TV signals work all over the UK) but can't transmit so much data. Thus 2.6GHz is suited to urban areas where there are large amounts of users and high data rates are required, while 800MHz is suited to rural areas as single sites can cover large areas.

This is also why all the legal wrangles have hindered the auction. All the 2G networks (O2, Vodafone, Orange and T-Mobile) got new 3G spectrum when the 3G licenses were awarded, while 3UK just got 3G spectrum. Recently Ofcom allowed the 2G networks to refarm their 2G spectrum for 3G use, giving existing 2G networks extra 3G spectrum.

Meanwhile Orange and T-Mobile combined (and had to give up some 2G spectrum in order to meet competition rules) to become Everything Everywhere.

3UK also felt aggrieved that it had a lack of spectrum as it didn't have any 2G spectrum in the first place.

Initially O2 and Vodafone had complained as they felt the 2.6GHz spectrum should have been given to existing 3G networks as it was a 3G band and threatened to take Ofcom to Judicial Review.

3UK also felt that existing operators should have their sub 1GHz spectrum capped (both O2 and Vodafone have spectrum in 900MHz for their 2G networks).

Court threats came and went and Ofcom held consultations and the spectrum auctions (that were originally meant to take place in 2007) got delayed and delayed again.

Then the Olympics were won by UK and by now broadcasters were using HD TV and even 3D TV and that meant remote broadcasting camera systems required much more spectrum than Ofcom had originally planned so they just allocated the unused 2.6GHz band and the (what would be now freed) 800MHz band for the broadcasters so neither could be made available at least until after the Olympics.

Ofcom is now planning a further consultation in late 2011 which will take at least 2 months which will then allow Ofcom to publish a statement in Summer 2012 and then an auction can follow later (i.e. not practically until Q4 2012). Ofcom actually released this information on Fri 7th Oct at 5pm (oddly when most news desks had closed for the day - Government departments tend to release bad news late on a Friday or just before public holidays - though Ofcom of course isn't a Government department but a Quango).

Various groups have seen this as hugely damaging to the UK economy as it will eave the UK well behind the rest of Europe (and the US) in terms of rolling out next generation 4G networks (LTE), though it's also a bit of a red herring as the UK networks haven't actually published plans to to rollout 4G networks any time soon (refarming 2G bands should provide considerable spectrum and greater 3G coverage). Though groups have claimed the economic loss to the UK could be around £730m.

As Ofcom have now reserved these bands for the Olympics they wouldn't realistically be available until 2013 anyway, so the new consultation and further auction delay won't materially affect actual rollouts based on these bands.

Things are not yet settled, there could still be legal battles and it's not going to be plain sailing. It's unfortunate that Ofcom (and thus the UK) was going to be one of the first countries to auction the 2.6GHz and 800MHz bands and now it's likely the UK will be one of the last to.
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