UK - judicial review of spectrum initiative

Multibillion pound 3G auction derailed

Ofcom's plans for a multibillion pound auction of mobile phone spectrum later this year have been derailed after T-Mobile called for a judicial review.

T-Mobile is expected to be joined in its legal action by several other mobile phone companies angered by the fact that the regulator is pushing ahead with plans to sell new spectrum before it has finalised what can be done with the airwaves that they already own.

Ofcom is planning to sell a new chunk of the mobile phone spectrum, known as the 3G expansion band, in September. The capacity on offer is 40% larger than the 3G spectrum the government sold eight years ago. That auction took place at the height of the dotcom boom and raised £22.5bn.

The 3G expansion band can be used for the next generation of super-fast wireless broadband, a project named Long-Term Evolution.

But the mobile operators are up in arms about this plan because Ofcom has not finalised what can be done with the spectrum they currently use.

Last year Ofcom proposed grabbing back more than a third of the mobile phone spectrum used by Vodafone and O2 to sell to rival firms so they can run 3G services on it. Ofcom hoped the move - termed a "refarming" - would bring wireless broadband services to a greater proportion of the population.

A firm decision was due in the summer, just before the sale of the 3G expansion band. But last month Ofcom boss Ed Richards admitted he had been forced back to the drawing board on this proposal.

The mobile phone operators contend that without a proper idea of what they can do with their existing spectrum, they cannot work out how much of the 3G expansion band they will need.

T-Mobile has requested a judicial review of Ofcom's decision in the high court because it believes that Ofcom is in breach of its duties in relation to efficient allocation of spectrum and its need to benefit consumers.

Its main question is whether Ofcom has adequately justified its decision to start the auction before taking a decision on refarming.

Several other mobile phone companies are watching the T-Mobile situation with interest.

A spokesman for O2 said: "We believe that Ofcom should make its refarming decision ahead of trying to sell us new spectrum. We are aware that T-Mobile has appealed Ofcom's auction decision and we are considering our position in light of the scope of T-Mobile's appeal."