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Ofcom snatches spectrum

Ubiquitous 3G in 2009?

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Ofcom has published a consultation showing how it will create a fairer spread of 900MHz ownership, if the industry can't come up with something better before the end of April.

Vodafone and O2 are going to have to hand over 5MHz of spectrum each, in the 900MHz band, which will be auctioned off in 2010 and will have to be cleared for use by the new owner in 2011. The rest of their 900MHz holdings (29.8 MHz each) will move to Administrated Incentive Pricing* along with the 1800MHz spectrum owned by T-Mobile & Orange, everyone will be able to trade their spectrum, including "3G" licenses, and deploy whatever technology they like wherever they like.

Lord Carter's proposals, published last month, called upon the regulator to allow the use of 3G, aka UMTS, technology at 900MHz, but recognised that currently only Vodafone & O2 have holdings in that frequency: a situation that will have to change. The industry has been given until then end of April to come up with a plan for achieving that, after which Ofcom's new proposal will probably be forced on it. Given the speed at which the mobile industry moves Ofcom's proposals should be seen as close to the likely outcome, if not a description of how things will be.

What that means is that Vodafone & O2, could be deploying UMTS900 later this year, providing mobile broadband with decent in-building penetration and coverage, for those able to obtain one of the small number of handsets and dongles currently supporting the technology. UMTS900 is already being used elsewhere, and shifting the frequency isn't technically difficult so more handsets should appear pretty quickly - which will be good news for those who decide to bid for the 5MHz chunks stripped from O2 & Vodafone come 2010 (O2 & Vodafone being forbidden from buying back their spectrum).

Cleaning out of those chunks shouldn't present any particular problems, though that won't stop Vodafone and 02 screaming blue murder and predicting the fall of civilisation if they can't hang on to their freebie spectrum. Equally loud will be the screams from 3 that the whole thing is unfair and that it wants some free spectrum too, rather than the ability to bid for a little bit on an open market.

The regulator is acutely aware of the arguments that will be arrayed against it; the 2007 proposal to strip Vodafone & O2 of their entire holding at 900MHz brought those to light, so this proposal comes with 12 appendices comprising almost six hundred pages of explanation and analysis to forestall many of those arguments.

Argument is fine, and Ofcom is pleased to receive comment on the proposals until 1 May, but the real concern will be a legal challenge that could see the whole process mired in court until the only winners are the lawyers. But if the legal challenges can be seen off, and Ofcom has tried hard, then we should see ubiquitous 3G and early deployment of the networks, assuming anyone has money left to use them. ®

* A system by which Ofcom works out what the spectrum would be worth at auction, and makes the owner pay a commensurate amount.

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