BT/EE and Three fingered by Ofcom for spectrum shenanigans

Ofcom CEO Sharon White has decided to put pen to paper and rant her way through the weekend, pointing the finger at BT/EE and Three for the UK’s potential failures in the digital economy.

It’s an interesting little rant, which appeared in the form of a by-lined piece in the FT over the weekend, and seems to be laying the foundations for blame should the UK fall behind in the digital arms race. In short, White has her defences up and is preparing for an onslaught should judicial reviews ahead of the 5G spectrum auction drag on for longer than what would be considered ideal.

“We appreciate companies must look after their own positions,” said White. “But commercial interests must not derail a golden opportunity for the UK to achieve leadership in 5G and be among the world’s best connected nations, which will benefit consumers and businesses and give our economy a competitive edge.”

It’s all very British. Nothing has gone wrong yet, but the adults are already preparing for failure. And the troublemakers are BT/EE and Three according to White.

Thanks to legal challenges to spectrum rules, BT/EE and Three have put the digital ambitions of the UK on shaky grounds. Three is arguing Ofcom hasn’t put strict enough controls on what BT/EE can bid for in the upcoming 5G auction, whereas BT/EE is challenging on the grounds the controls are too strict. Currently, the limit on airwave ownership stands at 37%.

Both have argued the challenges are for the benefit of the consumer, but the thinly vailed rationale isn’t too much of a distraction. It is entirely self-serving, as is pretty much every other statement and action in an industry which is proving to be the anti-Christ of customer centricity.

“The courts have agreed to fast-track litigation, but the benefits for mobile users will inevitably be delayed,” said White. “We planned to complete the auction this year. Now we will be in court in December. We believe that auctioning some 5G airwaves early would allow companies to start the vital groundwork to make 5G a reality as soon as possible.”

All the relevant parties will be eye balling the courts from December 5 as the review kicks off. It’ll be a tense three days for the Ofcom offices, as success will bring a sigh of relief and business as usual, but failure will not. Should Ofcom end on the losing side, the result will be months of delays as rules are redrawn. It’ll be back to square one, and of course there is no guarantee there will not be more legal challenges should there be any changes.

The UK is currently sitting in legal limbo for the moment, and considering the fact Ofcom’s CEO felt it necessary to pen a slightly defensive rant it doesn’t give the greatest impression of confidence. If you were to look at this article in isolation, you would probably assume Ofcom has resigned to loss already.

After reading the piece from White, we got in touch with Three, and the team is firmly standing behind the legal challenge. Ofcom seems to be validating its position with this rant, but Three is still wondering how the watchdog got to the number 37 for the cap. This rationale has not been fully explained to date, and considering Three wanted it much lower (a 30% cap on spectrum ownership), the challenge is far from surprising.

Another interesting area which has had Three up in arms is a review of the cap. According to Three, the cap will be reviewed ahead of the release of the 700 MHz spectrum (which will be in 2020 should everything run smoothly), but BT will not be below the cap by this point. Three argues whether there is any meaning to a cap which will not be realized before a review. It does have a point here.

Three might be crafting a bit of a reputation for being a bit moany, and the challenge itself does appear to be self-serving (not necessarily a bad thing), but at least this time there is logic. Three wants the decision making process reviewed independently so it can sleep soundly.