Ofcom back to drawing board over broadband wireless plans
Ofcom has been forced back to the drawing board over one of its most ambitious changes to the mobile phone market, which would have brought broadband wireless services to a greater proportion of the UK population.
Last year the regulator proposed grabbing back more than a third of the mobile phone spectrum that Vodafone and O2 have been using for over 22 years, to sell it to rival firms so they can run so-called 3G services over it.
The regulator had hoped to make its final recommendations about what is called the 'refarming' of the old 2G (second generation) spectrum in the summer. But yesterday Ofcom chief executive Ed Richards admitted that the sheer weight of responses to his initial plans means the regulator will instead have to re-open the consultation.
In his evidence to a joint session of the Commons culture, media & sport and business & enterprise committees he said he had planned to release either a statement or consultation in the summer but "it may well be the latter" because of the number of responses to his initial plans.
The news will be warmly welcomed by O2 and Vodafone who were stunned by Ofcom's proposals when they were unveiled back in September. Their full responses, when they were released in January, were forthright.
Vodafone accused the regulator of making its decision "based on a hypothetical and fanciful version of the future". O2, meanwhile, contended that the proposals were based on "flawed policy" and would result in "very substantial costs ... and disruption to customers".
O2 went as far as suggesting that if it was forced to give back some of its original spectrum it could adversely effect the service offered to customers of its Tesco Mobile joint venture, which uses the 2G spectrum.
In stark contrast, Ofcom said in its proposals that reclaiming part of the old 2G spectrum and re-auctioning it to rivals Orange, T-Mobile and 3 would lead to cheaper services, fast wireless broadband in rural areas and 10,000 fewer masts.
But while news that the debate over refarming is going back to another round of consultation was good for the mobile operators, Richards said yesterday that they have failed in another of their lobbying efforts.
Several mobile phone companies have been pushing for a delay in the sale of the wireless spectrum that will become free when the existing analogue TV signal is switched off in 2012.
Ofcom intends to realise the so-called 'digital dividend' through an auction next year, but some in the mobile industry have balked at the idea because they will not actually be able to use the spectrum - which could be used for services such as mobile TV - until 2012.
But Richards gave their arguments short shrift in his evidence yesterday saying "our general instinct on this is to try and release the spectrum for use as soon as we can".
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