This would mean O2 and Vodafone can refarm both their 900MHz 2G spectrum and their 2.1GHz 3G spectrum, EE (the combined entity of Orange and T-Mobile) have already started refarming of their 1800MHz spectrum, but they will be allowed to also refarm their 2.1GHz 3G spectrum. 3UK only have (currently) 2.1GHz 3G spectrum but will be able to refarm this and when EE transfer around 25% of their 1800MHz spectrum to 3UK they will also be allowed to use this for 4G (though this is not expected to happen until September 2013).
This is separate from any spectrum that is currently being auctioned (800MHz and 2.6GHz) though Ofcom has not yet announced who is bidding for what spectrum.
3UK have announced that when they launch 4G services, they will not differentiate on price between 4G and 3G services. The consultation is available here and interested stakeholders can respond on-line.