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Ovum warns 4G spectrum auction legal challenge seems inevitable

Wednesday, May 2nd 2012
A legal challenge to the 4G spectrum auction seems likely, according to Ovum.
Ovum warns 4G spectrum auction legal challenge seems inevitable
Legal action against Ofcom's proposals for the UK's 4G mobile broadband spectrum auction seems "almost inevitable", independent analyst firm Ovum has warned.

The country's four network operators - Everything Everywhere, O2, Vodafone and 3 Mobile - require additional spectrum to support the rollout of 4G services.

A sell-off of newly-freed-up airwaves is being organised by Ofcom, but the process has already been significantly delayed and is currently not set to take place until early 2012.

Many other countries - including France and Germany - have already held their spectrum auctions, meaning the UK is at risk of being left behind in the race for super-fast mobile broadband access.

Delays have been caused by the failure of the network operators to agree on the best way to regulate the auction.

O2, for instance, argued that the process of imposing spectrum floors - designed to control the amounts of airwaves acquired by each carrier - could potentially allow Everything Everywhere and 3 Mobile to make purchases at a discounted rate.

The company claimed this could distort the auction and would be tantamount to state aid, which is illegal in the EU.

With this opposition in mind, practice leader of Ovum Regulation Matthew Howett said some "material changes" to the current proposals must be made if litigation is to be avoided.

Mr Howett explained: "With no obvious way out of the deadlock, any legal challenge could send everyone back to the drawing board.

"Only a direction from the UK government could keep the auction on track and this is something that it must now wake up to."

The Ovum analyst went on to claim plans to allow Everything Everywhere to deploy 4G services this year would not truly benefit consumers, as there would be no competition between rival operators.

"This can only be fully achieved through the joint award of spectrum at 800MHz and 2.6GHz," he stated.

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