O2, one of the “big five” UK network operators, has spoken out about the upcoming Ofcom auction for 4G frequencies, and – in a nutshell – it’s not happy.
The network reckons the process is biased against O2 and Vodafone, and effectively could lead to a taxpayer bill of a whopping £1 billion.
The Ofcom auction will determine which networks gain access to 4G 800MHz frequencies, and the regulator has stated that – in the interest of competition – “at least four” networks will be awarded with frequencies below 1GHz.
However (here’s where it gets complicated), O2 and Vodafone already operate on 900MHz frequencies. O2’s assertion is that the “spectrum floors” will work against it and Vodafone, with other networks potentially picking up 4G pie for cheap, hence the aforementioned taxpayer bill.
“We believe that the proposed spectrum floors are a state aid and are therefore illegal under EU law," said an O2 spokesperson. “The spectrum floors would distort the auction process, allowing all bidders, except Vodafone and O2, to potentially acquire spectrum at discounted prices. Ofcom’s own figures suggest this effect could cost taxpayers £1bn.
“The European Courts have determined that using different rules and pricing mechanisms for different classes of bidders in a spectrum auction would constitute an unlawful aid under the EU Treaty,” continues O2.
“Ofcom is faced with a difficult choice of either revisiting its spectrum floors proposal or discarding the floors and getting on with the process.”
Ofcom hopes to get the process underway in early 2012.
via: PC Pro