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Ofcom moots the 900MHz boot for O2 and Vodafone

Let's have another spectrum auction!

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UK regulator Ofcom has opened a consultation on the future of the 900MHz band, currently allocated to Vodafone and O2 for their 2G services, and has suggested that a technology-neutral auction might be in order for 2009.

900MHz is a good frequency for building penetration and decent range, and is used in rural areas where the small-cell-site advantage of 1800MHz is less applicable. In the past a frequencies license was always allocated to technologies, so while O2 and Vodafone have a license to use 900MHz, they can only use it for a 2G telephony service, nothing else.

The GSM Association has been campaigning for 900MHz to become available for 3G services, arguing that the more-advanced 3G technology would make better use of the band.

Ofcom would like to go one stage further, not just making the frequency licenses technology-neutral, but also allowing them to change hands on the open market. This would mean a company could buy a chunk of spectrum, then carve it up for resale, or just sell it on as a lump if they ran out of money or interest.

Vodafone and O2 didn't originally pay for the 900MHz frequencies, instead committing to building the infrastructure to support a digital phone service. Ofcom isn't planning to whip away their entire allocation, though it does want to auction off part of it, ideally in three separate chunks to support three new operators.

Generally operators like technology-neutral licensing, as it opens the doors to WiMAX or the like without additional licensing. Being able to trade their frequencies will sit well with them too, though it could drive up the price slightly.

Ultimately Ofcom would like to see all radio frequencies auctioned off to the highest bidder, who would then be able to deploy whatever technology they like or sell the spectrum on in chunks to interested third parties.

Anyone who feels differently, particularly with reference to 900MHz, should respond before November 29.

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