Are the bureaucrats strangling 4G mobile? Ofcom responds

Ofcom will be doing a second round of consultation which will push back any 4G mobile network rollout to 2015, four years later than key economic rivals, the US and Germany.

Local companies Everything Everywhere and BT have also been testing 4G networks in Cornwall.

The first round of consultation took place in March this year and would have seen the auction occur in the first half of 2012. Originally this auction was meant to occur in 2009, but squabbling over standards have caused problems here, and worldwide.

Ofcom Communications Manager Rhys Hurd says that this last round of consultation had such a huge response that further discussion was needed. This second round of consultation will take between 8-12 weeks.

Ofcom wants to will report the changes to stakeholders by the end of the year. After developing the auction design in the new year, a statement to that effect will be released in summer 2012 with the auction to get underway shortly after.

So why is it taking so long? Why have there been so many delays?

One of the problems with the first round of consultation was competitive tension between the telcos. Hutchinson and other newer players maintain that Vodafone and o2, who already have access to quite a bit of sub 1GHz spectrum (around the 900MHz area), should have their access to the 800MHz band limited. Mr Hurd would not be drawn on whether these proposals would appear in Ofcom’s recommendations this time round.

The UK has also had to adjust to match Europe. This meant a larger band of 800MHz was required than was originally set aside. Unfortunately, much of the UK’s Digital Terrestrial Television (DTT) network floats around in this space, and Ofcom claims it needed time to clear it. This is not expected to occur until late 2013.

When asked if he was concerned that the UK will, by 2015, be four years behind key economic rivals, the US and Germany, Mr Hurd was pragmatic.

"It’s quite tricky to draw comparisons between here and other countries. We operate in quite a different way to other countries with regard to radio spectrum allocation. The main difference for us is DTT; around 50% of the UK population rely on DTT as their main source of TV, which is quite unusual compared to other countries which have moved onto cable or satellite TV," he said.

The other band is at 2.6GHz which is seeing problems with interference. Users in neighbouring bands, such as aeronautical radio, for example, may experience interference. This problem is simple, says Mr Hurd, as it will only require the installation of filters.

"Regardless of when the 4G auction takes place, the spectrum won’t actually be cleared and available until 2013 at the earliest," he said.

When asked what he expected the ‘digital dividend’ to the UK taxpayer to be, Mr Hurd was again diplomatic.

"Our role is to produce the best possible result for consumers, rather than simply raising revenues for the treasury."

The digital dividend is the payment from providers to the government for the right to use these radio spectrums. Ofcom has stated in the past that it estimates to deliver benefits with a value of £2bn-£3bn. By comparison, the 3G auctions in 2000 saw telcos pay £22.5bn ($34bn) in the UK and around £30bn in Germany, which many analysts believe led to the telecoms crash of 2001. Some of the companies involved were so burdened they couldn’t afford to actually build the infrastructure following their bids.

Our 4G Auction: What Are The Benefits?

– Faster mobile internet services. Use of smartphones and tablets for services such as video, social networking, email and internet browsing is growing fast. It will help mobile operators meet these demands and offer faster service.

– Continuation of a competitive mobile market. Access to the spectrum is access to the market. Access to 4G can mean the difference between success and failure for new market entrants. More competition means better choice and price for consumers, both enterprise and retail.

– Broadband in rural areas. The 800MHz band is key to the delivery of next generation mobile broadband services in less densely populated areas, where physical infrastructure such as fibre may not be financially viable.

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