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4G-auction rural notspot scheme would actually be illegal

Would mean lockout, massive subsidy

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Comment The Consumer Communications Panel has called for 4G money to be used to help build rural networks, which sounds eminently sensible but, as BT pointed out last month, would almost certainly be illegal too.

The CCP got huge amounts of publicity for its public response to Ofcom's ongoing consultation on the best way to sell off the 800MHz and 2.6GHz bands in next year's mega-auction. That response calls for the 4G licences to have coverage obligations extending 2G networks into the remaining not-spots, but last month BT's response to the same consultation explained that such an obligation would amount to an illegal subsidy, not to mention that it would block new entrants from bidding next year.

The CCP's response (PDF, short and sweet) is a media-friendly single page, compared to BT's 43 pages and Telefonica's 101-page epic, ensuring the CCP response was more widely read. The brevity also removes the need to explain any details, limiting itself to vague calls for Ofcom to mandate that those bidding for 4G licences be obliged to help provide national 2G coverage.

That would, of course, exclude any new entrants from bidding – anyone without an existing 2G network (including Three) would be at a huge disadvantage. Even if such a bidder could license from a competitor, it would put the winner at a distinct disadvantage if they didn't have their own infrastructure.

BT pointed out that any coverage obligation could also fall foul of competition law as an illegal subsidy. A licence with coverage obligations will be less valuable, effectively taking money from the UK treasury and using it to build a privately-owned mobile network, which isn't allowed.

If we seriously want national coverage, for voice or data, then better to look to the Australian model, which saw the government building out rural coverage and wholesaling it to the network operators, but that would take government action rather than fiddling around with the auction conditions.

Complete national mobile voice coverage would be a nice thing, but there are better ways to get it than simplistic calls on the national regulator which don't stand up to a moment's examination. ®

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