Original URL: http://www.theregister.co.uk/2010/07/29/mega_auction/
UK population to be guaranteed mobile 768Kb/sec service
Plus new-for-old deal for PMSE
The government has endorsed the plan to pass organisation of the digital dividend mega auction back to Ofcom, with universal service guarantees, and promises a new-for-old deal for the Programme Makers and Special Events (PMSE) crowd.
Minister for Communications Ed Vaizey drafted a statutory instrument covering the plan, which emerged from the Department for Business, Innovation and Skills (BIS) in March. He added a promise that wireless microphones that need to shift frequencies will be replaced on a new-for-old basis, and that 90 per cent of the UK population will get 768Kb/sec sustained data rate 90 per cent of the time – at least while they're outside.
In the statement, the Minister called for Ofcom to auction off the analogue TV frequencies (800MHz) and the unused space at 2.6GHz "as soon as possible" - but not before it has carried out a competitive analysis including consideration of how to help a new entrant. The minister has also promised "generous compensation" to help the entertainment industry shift its wireless mics down the dial – but won't say how much that compensation will be.
We asked what constitutes "generous compensation", but were told that it would be up to Ofcom to decide. PMSE companies have long argued that they're going to have to buy new kit to replace old stuff, and that compensating them for the value of the old kit was insufficient. Ofcom punted the issue back to the Treasury in April, and now BIS has decided that new-for-old is better, and constitutes "generous compensation".
More complicated is the question of who gets to bid for which frequencies, and whether any companies will face limitations on what they can buy. The issue is that Vodafone and O2 have nice chunks of spectrum at 900MHz, where they currently are only allowed to deploy 2G technology. That rule is about to change, and both networks are looking forward to deploying 3G at 900MHz (known as UMTS900), but that's hardly fair on the other three networks, which didn't get allocated frequencies.
T-Mobile and Orange bought spectrum at 1800MHz, which can also be used for 3G under the new rules, but 3UK has no such spectrum and wants to be compensated:
"It is critical for UK consumers that in setting out the auction process Ofcom addresses the distortions now created by allowing the incumbent operators to retain full access to 2G spectrum," as 3's CEO puts it.
The devil is in the details, and in the main those details follow the proposals made by the Independent Spectrum Broker Kip Meek, though the BIS has added some tweaks regarding the promise of (near) universal service.
The draft statutory instrument rather oddly (pdf) specifies "900MHz and 1800MHz bands for use for both GSM and UMTS systems". This seems curiously limiting given that 4G (LTE) is already on its way. Hopefully that will be amended before the text is approved, otherwise we could find ourselves in a similar position within a decade or two. ®