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All 4G telcos must hit 98% coverage, Ofcom told

MPs not happy with EE flogging free frequencies, either

The smart choice: opportunity from uncertainty

Ofcom should demand 98 per cent coverage from all 4G operators, rather than 95 per cent from one, and claw back some cash from EE for the spectrum it was given.

So says The Ministry of Fun, which took governance over Ofcom earlier this year. A committee of MPs has been looking at the 4G auction plans and concluded that the regulator has done a pretty good job, though not quite good enough as it wants to see greater coverage requirements as well as some money from the sale of 1800MHz spectrum which was allocated to Everything Everywhere's parents.

Everything Everywhere is being forced to flog off the spectrum as part of the merger approval which saw T-Mobile and Orange combining to create the company. Orange and T-Mobile were both allocated radio spectrum at 1800MHz for 2G services, and both bought 2.1GHz spectrum for 3G, so to avoid a glut the EU demanded that EE sell some.

Which leads us to the sight of a foreign-owned company (EE is owned, in equal proportions, by the Germany-based T-Mobile and France Telecom) making money selling an asset which was freely given by the UK government – something the chair of the committee, John Whittingdale MP, finds unacceptable:

"Government and Ofcom should find a way to ensure that at least some of the proceeds are invested for public benefit," says his statement on the subject.

EE does pay an annual rental on the band, but nothing close to the market value. Clawing that asset back from the company will be legally fraught, though as the committee notes the whole mega-auction process is a minefield of vested interests:

Those mobile network operators with sub-1 GHz spectrum play down any advantage it may offer, stating that they are not immediately able to use it for 3G because the spectrum is already in use by 2G customers, who cannot simply be cut off. Those operators without sub-1 GHz spectrum claim to be frozen out of the market. These irreconcilable claims highlight the difficulties faced by Ofcom in overseeing competition in the spectrum market place.

In general the committee approves of Ofcom's proposals for a mega auction next year, though comments from the rest of the industry have thrown them back into draft until the end of the year. Ofcom reckoned one 4G licence should come with a coverage requirement, while the committee reckons all licences should be required to cover 98 per cent of the UK.

Coverage requirements are getting more important as operators increasingly share infrastructure, and thus stop competing on coverage, but such details are a small matter compared to the other issues that need to be resolved before the mega-auction can go ahead. The full report is here. ®

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