"We regulate for the benefit of the consumer, not the industry"
Ofcom's Group Director of Spectrum Policy, Professor H Nwana has said that Ofcom is still "minded" to approve EE's application to refarm 1800MHz spectrum for LTE services, despite continued strong opposition from Telefonica and Vodafone.
Describing the refarming of 1800MHz as a "very thorny issue", Nwana said that Everything Everywhere's competitors had reacted "very vigorously" and had "promptly rebuked" him for his recent statement that he was "minded" to approve EE's liberalisation application.
Yet speaking to Mobile Europe on the fringes of Informa's LTE World Summit in Barcelona, Nwana said that his principal, government-mandated duty is to regulate for the benefit of the consumer, not the industry.
"I have to regulate for the benefit of consumers and the wider economy, not for the industry. The mobile data curve that we've seen is that customers have soaked up all the broadband supply - so we have to look at the benefits to consumers, e-commerce and to UK Plc of access to 4G. That must be the right thing to do."
"And I have not said we will definitely liberalise. We have said we are "minded" to liberalise, and in fact we have received strong responses to that. Obviously [Vodafone and Telefonica] have reacted very vigourously saying that you are going to give our competitors a 12-18 month head start for LTE. "
Nwana also held on to Ofcom's line that although the auction is happening later than it would have wished, its delay will not delay actual LTE deployment for operators, as spectrum would not be fully cleared in time for use across the UK before late on in 2013 in any case.
The two main issues are clearing DTV channels 61,62,66 as well as mitigating interference on UK airport radar systems that operate at 2.7GHz, a band that sits right next to 2.6GHz LTE spectrum.
Nwana said that some airport receivers are very old, and can hear signal right down as low as 2.4MHz, meaning that the potential for interference — and grounded planes as a result — is high. The solution is to upgrade those receivers, fitting filters to ensure they receive the signals they should. It will be 2013 and even into 2014 before solutions for all the radio types at UK airports are operational, he said. Until then, operators will face exclusion orders and other license conditions for 2.6MHz LTE around airports - meaning that around key areas for operators, the London and South East airports, LTE deployment would necessarily be delayed in any case.
"We've been clear - the earliest we can clear spectrum around London and the South East is October 2013 - and that's where the operators are likely to start rolling out their networks. That's not guiding our timetable, but every time someone throws rocks at me, I also point out that they would not be able to use that spectrum for quite a while anyway."
That said, Nwana did concede that the spectrum auction process has been difficult. "We've been trying to get the spectrum on the road in the UK for quite a while, with quite a lot of difficulties."
Nwana said that Ofcom would publish the rules for the auction in July 2012, with applications made before Christmas, and spectrum awarded in 2013.
Other items Nwana clarified for Mobile Europe:
- The regulator is still proposing to reserve 800MHz spectrum for a fourth operator. Nwana said that the regulator is committed to having four national wholesale providers.
- The proposal to keep 2x10MHz at 2.6GHz for shared, low power use, is still on the table. This would allow multiple license holders to provide indoor LTE coverage on a local basis. The aim here is to provide the option for companies to build business cases based on indoor capacity and coverage.
- The re-assignment of license fees for 900MHz spectrum is still likely to be determined, "in some manner", by the price achieved by 800MHz spectrum. This matters because at present, Telefonica and Vodafone pay relatively little for 900MHz spectrum. The two 900MHz license holders are not too keen on the idea, because it means that any bid they make for 800MHz spectrum will effectively boost the fee for their 900MHz spectrum
- One 800MHz license will carry an obligation to provide 2Mbps service by 2017 to 98% of the population.