Kip Meek has been directing Government plans to reallocate broadband spectrum in the UK over the last few months.
This culminated in the publication of a consultation document in October, ?which adopts Meek’s proposals on the division, auction and liberalisation of spectrum in the UK.
The journey has not been smooth, with the UK’s five mobile operators having to be dragged to the negotiation table this summer by Lord Mandelson. But just as talks were starting to make headway, up popped another obstacle: the proposed Orange/T-Mobile merger.
The consultation document, based on Meek’s report in May, was hastily revised to cover the possibility of the merger and finally published last month.
Now Meek is looking forward to some plain sailing, and says he is confident that all five operators are fully on board.
‘I think the mobile industry has done a really good job in terms of finding a way through to a new solution. Historically, positions were entrenched but the five operators have all moved in different directions and they have all compromised,’ he says.
There could still be some hard negotiations ahead, but Meek is not expecting significant problems. He says: ‘I have not asked operators to sign in blood every component of what I proposed, but in general they are happy to go forward on the basis of the report.’
However, the Orange/T-Mobile merger continues to muddy the water since the combined spectrum allocation of the two operators would take their holding above the acceptable limit.
Meek explains: ‘The implication is that some of the rules will need to be modified.’ However, he is confident this poses no serious problem. ‘These things can be accommodated alongside the merger while still meeting our key objectives,’ he insists.
Nonetheless, the merger has added a new dimension to the negotiations. ?Meek says: ‘In a sense, there is a new round of negotiations and discussions taking place between the mobile operators and the competition authorities. We have reached a broad agreement among the networks that the arrangements are fine, but the competition authorities will have another look at this and may seek additional remedies.’
Meek declines to comment on what those additional remedies might be, explaining that he does not want to influence the discretion of the competition authorities.
Meek was brought on board to pilot the process through challenging times.
‘The property rights associated with spectrum, particularly 900MHz and 1800MHz were not entirely clear and, therefore, the reallocation of those became a very contentious issue. It was quite difficult for Ofcom to find a way through that. So in a sense, my proposals are a way of navigating through that process.’
Meek is keen to point out that his proposals are temporary measures to take the industry through a transitional phase. ‘My aspiration was always to create a set of sensible arrangements, which won’t persist. They are just there to help get through this difficult period,’ he says, adding: ‘So all the proposed spectrum caps are temporary, they are not permanent. In due course, if people want to build up spectrum via trading, it will be permitted, subject to the competition authorities.’
Meek says this is an evolutionary process with three key aims – to allow a smooth transition to next generation mobile, to maintain competition and to deliver universal broadband in line with the Government’s Digital Britain plans.
He explains: ‘The whole point is we are moving from an environment where spectrum is basically allocated to one where it is liberalised and traded.’
So how will spectrum reallocation change the face of the industry? Meek predicts keen competition for spectrum rights not only from the existing operators, but also from contenders such as BT, Intel and Freedom Four. Other European Telcos could also join the fray, Meek speculates, in the wake of EU plans to harmonise broadband spectrum across Europe.
Asked what would be the impact of another merger, Meek says it is not on the route map. He says: ‘We produced a set of propositions based on four or five operators. We had not thought in terms of a three operator universe – perhaps we should have but we didn’t. Until now, the policy has been to encourage competition.’
On further reflection he adds: ‘We would have to go back to the drawing board obviously, and some thinking in my report would be a useful starting point.’
Meek’s journey may not be over quite yet.