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Three complains to Brussels over NFC exclusion

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The UK's smallest operator, Three, has launched a preemptive strike against the NFC gang of three which was announced in June, claiming its exclusion is competitively motivated.

The alleged cartel, which still lacks a name, is jointly owned by Everything Everywhere, Telefonica UK and Vodafone, and is intended to create a standard platform for the delivery of NFC-based advertising. The joint venture hasn't applied for regulatory approval yet, though it will have to soon, so Three's representation to the European Commission preempts that application.

The venture was announced in June, but despite being billed as a cross-operator initiative, Three's CEO says he didn't even hear of the deal until half an hour before it went public. The other operators say Three is welcome to sign up, just as Facebook or Skype is welcome to sign up, but only as a customer of the service, not an owner.

The single-platform plan is a good one: operators sensibly abandoning their dreams of raking a percentage of every electronic transaction, and instead ensuring that they get control over the electronic coupons and location-based advertising that NFC makes possible.

Those opportunities are significant as the secure element inherent in the Near Field Communications standard makes distribution (and use) of loyalty points and promotional vouchers possible, and it's not a business already dominated by Visa, Mastercard and their ilk.

Companies planning to use such things will want to deal with a single entity, so they can launch an electronic loyalty card and have it work on every NFC phone regardless of the network operator (and able to transition between network operators). That's what the joint venture is intended to provide, though without Three it lacks critical ubiquity.

Three reckons this is a deliberate move to stifle a growing competitor who is starting to take customers from its bigger rivals. The other operators say Three has never shown significant interest in NFC and their race to market would be delayed by including another company in the ownership structure.

The venture will need regulatory approval, and Three's arguments are pretty compelling. If a joint venture can't offer cross-network compatibility then it will simply fall to Apple and/or Google to provide the services on which the operators can't agree, and not for the first time. ®

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