Spectrum auction rule changes being considered by Ofcom have been met with warnings of legal action from Vodafone UK head Jeroen Hoencamp.
The changes may prevent big money players from outspending others to get the lion’s share of bandwith, leaving smaller players less able to compete.
Three’s Chief Executive Dave Dyson has campaigned for these rule changes to include a 30% spectrum cap, meaning any player with more than this amount would be forced to sell back exceeding bandwidth. This would negatively affect EE who have over 40% and possibly Vodafone, who are already close to this limit even before the auction.
In an interview with The Sunday Telegraph, Hoencamp responded to the rumours of similar systems being enacted by Ofcom, stating: ‘Of course we will oppose it, and we are looking at it now.’
Ofcom’s spectrum auctions are rarely uncontested, with the initial 4G auction in 2013 having been gazumped by EE’s early 4G rollout the year before.
This move outraged rival players and in his book due to be released later this year, ex EE CEO Olaf Swantee commented on the outrage stating: ‘The competition will not shy away from using armies of lawyers to stop industrial policy – even when it is good for society and for the viability of the market.’
These words reveal the industry’s willingness to use the courts to do battle with each other as now it is EE, alongside their new owners BT, who are understood to be examining legal routes to prevent any rebalancing of spectrum holdings as promoted above by Dyson.
Dyson also responded to accusations of demanding special treatment for Three by telling The Telegraph, ‘Our proposal is not that we get the spectrum below market value, but that we pay a fair price relative to the scale of the business. It is a scale game. You can afford to pay more if you have a bigger customer base.’
Any rule changes made by Ofcom are likely to be published in September, when the auction is rumoured to be taking place. When Ofcom initially announced the Auction in October 2015, it was said to be taking place in ‘early 2016’, however, legal threats by all four networks caused the regulator to backtrack on this pledge.