High court rules in favour of Ofcom in spectrum battle

Ofcom has beaten back a legal challenge from Three and BT/EE which threatened its planned auction of mobile spectrum for 4G and 5G assets set to take place next year.

The High Court ruled in favour of the regulator, which has sought to limit the amount of new spectrum that any single operator could acquire. While the decision impacted BT/EE the most, as the biggest hoarder of spectrum in the UK (42% currently), Three was the first to throw a wobbly, believing the restrictions didn’t go far enough, though the complaint was focused on the methodology Ofcom used to come to the 37% spectrum ceiling Ofcom announced.

BT/EE’s issue with the ruling was a bit more logical; the restrictions were too rigid, placing too much red tape around the telco as it moves towards the connected economy. Logical or not, the judicial review has gone in favour of Ofcom, with the court decided the regulator did its job perfectly reasonably.

“In the light of my review of the evidence I am clear that the approach taken by Ofcom was comprehensive, coherent and logical,” said The Honourable Mr Justice Green, in his ruling summary.

“Ofcom’s findings are evidence based and justified. To arrive at its Decision Ofcom engaged in a detailed predictive analysis of how the market would work in the future under a series of different assumptions and scenarios.

“It consulted upon its economic and econometric analysis and modelling. In the Decision it sought to strike a delicate balance between protecting competition and consumers, on the one hand, and setting restrictive caps which were not disproportionate to BT/EE. The balancing exercise was sound.”

This is certainly good news for Ofcom. The legal complaints essentially questioned the competence of the regulator, though Mr Green has given the thumbs up, describing a process which was in-depth and knowledgeable enough to dictate the on-goings of a crucial spectrum auction. While Mr Green did admit Ofcom could have given more reasons with previous rulings, neither Three or BT/EE provided enough evidence to undermine the regulators rationale or ultimate decision. Overall, a good day at the office for Ofcom.

While it is a moot point now, should the court have gone the other direction, Ofcom would have had to have gone back to the drawing board, reassessing the landscape, before deciding on new limitations. The result would have been a delay in the rollout of 5G networks, a set-back in a country which is already considered by some to be lagging in the digital race.

In response, EE has confirmed it will not appeal the decision.

“While we don’t believe that spectrum caps in this auction are in the best interests of consumers, we’re pleased that the court has reached a decision so quickly and are now looking ahead to investing in the best mobile experience across the UK,” said an EE spokesperson.

Three has other intentions however.

“We are disappointed by the initial ruling of the court as a fairer distribution of spectrum is vital for UK consumers and the digital economy,” said a Three spokesperson. “The team at Three is committed to providing the best possible offering for our customers and we are seeking permission to challenge the ruling in the Court of Appeal urgently. Ofcom does not expect 5G to rollout in the UK until 2019/20 at the earliest, so this will have no impact on the delivery of this new technology.”