Ofcom clears deck for re-farming
Competition issues just evaporated
Ofcom is now recommending that the UK government let Vodafone and O2 run 3G networks at 900MHz, arguing that the creation of Everything Everywhere removes any threat to competition.
Last time the regulator looked at the question it concluded that as only Vodafone and O2 have 900MHz spectrum it would be unfair to let them use it for 3G services, given that T-Mobile, Orange and 3 paid top dollar for 2.1GHz spectrum on the basis that it was the only place where 3G was allowed. But now that Everything Everywhere exists, Ofcom reckons it can offer a credible competitor without 900MHz spectrum, by jumping to 4G technology at 800MHz.
900MHz is important because it has much greater range than 2.1GHz, and can penetrate buildings better too - Ofcom reckons you need twice the number of base stations to provide the same coverage. Given that Vodafone and O2 were allocated the 900MHz spectrum (rather than having to bid for it) it had been assumed that refarming (as the process of allowing 3G to operate at 900MHz is called) would only be allowed if they gave up some of that spectrum.
But no: now that Everything Everywhere exists it has twice the number of base stations, so Ofcom reckons it can provide the same coverage, and given that 3 is in the process of integrating its 3G network with Everything Everywhere (3 claims the reverse is true, but the result is the same) then the total coverage will be the same for all networks and everyone is a winner.
Particularly Vodafone and O2, who get to massively extend their 3G networks without having to spend any more money on radio spectrum, but what they don't get to do is deploy 4G (LTE) technology into that same space.
It had been assumed that Ofcom's modifications to the regulations would open up the 900MHz bands to any radio technology - the preferred way of licensing spectrum these days, but the rules being proposed by the regulator don't do that - they just add UMTS to the list of permitted technologies. A decade down the line we'll probably see Vodafone and O2 campaigning for another round of re-farming, while Everything Everywhere snaps up a load of digital dividend spectrum in next year's mega-auction.
3, meanwhile, remains stuck at 2.1GHz with a 3G network and an autonym-based objection to 4G technologies which will end up locked into the Digital Dividend (ex-analogue TV) spectrum once the regulator gets round to auctioning that off next year. ®
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