Having found that it can charge more than it used to for mobile spectrum, Ofcom is planning the same trick for 28GHz Broadband Fixed Wireless Access.
The pricing model radio spectrum charges used to be called AIP (administered incentive pricing), which covered Ofcom’s cost of administering the spectrum.
But then Ofcom hit upon the idea of charging
what the market would bear a fee which reflected the "true value" of the spectrum.
To this end, the regulator is consulting on what to do when the current 28GHz licences come to an end.
The original November 2000 auction was a farce, with the government eyeing a £2bn pot of gold and only coining £38.2m. Now the 15-year fixed term is coming to an end and you might understand why Ofcom doesn’t want another auction. The regulator says:
In response to requests from licensees, the majority of these auctioned licences have since been varied to make them indefinite, subject to the payment of fees from January 2016. Today’s consultation proposes to implement fees from January 2016 which are based on existing charges for fixed-link deployments in similar frequency bands.
The licence holders are
- Vodafone (four licences, bought from Cable & Wireless which in turn bought them from Thus PLC – formerly Your Communications, formerly Norweb – the first holder)
- Chorus Communications (one licence)
- Telefonica UK (six licences, bought from Cambridge Broadband, which bought from Fastnet Spectrum Holdings, which bought from Energis, the first holder)
- Urban Wimax (one licence, bought from Broadnet, the first holder)
- UK Broadband (three licences, bought from Faultbasic, the first holder)
The lots are divided by both frequency and region, and Ofcom argues that by charging a more commercial rate, the licence holders will make better use of their spectrum. The proposed pricing is as follows:
The deadline for comments on the proposed regulations is 2 November 2015. This seems like a very short deadline for a consultation with so many players, but in reality it came about off the back of a call for inputs which was run in May. The process has pretty much been thrashed out already.
One of the more interesting areas of spectrum where licences are about to run out are the DECT guard bands, which run at 1800MHz and so cover mobile phones. BT is using this for OnePhone and TalkTalk has ambitious plans in the space. Ofcom’s success with handling other licence expiries will be watched closely by those two companies in particular. ®