The head of UK regulator Ofcom has hit out at some of the country’s incumbent mobile operators for delaying its upcoming 4G auction with legal threats.
“I think some major companies will have to reflect upon whether they have inadvertently…
The head of UK regulator Ofcom has hit out at some of the country’s incumbent mobile operators for delaying its upcoming 4G auction with legal threats.
“I think some major companies will have to reflect upon whether they have inadvertently jeopardised the benefits of objective, independent regulation in this area by virtue of their willingness to game the system,” said Ed Richards at an industry conference in Brussels on 29 November.
According to Richards, although companies are naturally inclined to defend their commercial interests, they should make use of their right to appeal rather than entangle the regulatory process with litigation, or threats of litigation.
He said “when litigation becomes essentially strategic rather than based on objective grounds, and when it has the effect of holding back innovation and hampering growth, it is legitimate to ask whether the overall legislative framework fully supports the public interest in this increasingly vital area”.
As UK legislators draw up a new communications bill, Richards hinted that they could be looking to take on board lessons gained from the fraught auction, which after several years of set backs is set to take place in the second half of next year.
“I am sure legislators would be all too willing to accept an argument which returns power in such matters to politicians, in light of the apparent inability of the current model to make timely decisions where the national interest is at stake.”
Edward Rea, a telecoms lawyer at London-based firm Halebury, warned that delays to network upgrade projects because of the stalled auction will have wide-reaching effects.
“Telecoms equipment suppliers such as Ericsson, Nokia Siemens, Alcatel-Lucent and Huawei, which only months ago had been hopeful of securing contracts for network upgrade projects during 2011, will now have to wait well into 2012 before securing such contracts and booking revenues for upgrade projects – heaping additional financial pressure on suppliers already suffering from intense competition,” said Rea.
“While Germany, Sweden, Italy and Spain have all completed their spectrum auctions and France is well on the way to doing so, the UK will be the last of the leading European economic powerhouses to auction its airwaves.”
Earlier in November, a government committee condemned the infighting between the country’s four mobile operators – Vodafone, Everything Everywhere, O2 and Three – for delaying the roll out of 4G services.
John Whittingdale MP, chair of the Commons culture, media and sport committee, said he was concerned about the “constant disagreement and special pleading”, which “appears to have further delayed” the auction.
“We believe that the basic rules for the auction which Ofcom has laid down are sensible and fair, and that further delays will result in the UK falling further behind in this vital area. The auction needs to proceed as soon as possible,” said Whittingdale.
His comments came as the committee published a report that concluded that overall Ofcom had been doing a good job in facilitating the auction.
