Ofcom still determined to rinse UK MNOs over license fees

UK telecoms regulator Ofcom has announced a fresh consultation on the license fees MNOs have to pay for some spectrum.

This marks the culmination of a process that began four years when Ofcom decided the UKs mobile operators should pay four times more for their 900 MHz and 1800 MHz spectrum than they currently did. That was eventually tweaked down a bit but still represented a 200% tax increase.

EE, which pays the most of this spectrum tax thanks to its 90 MHz of 1800, decided to take matters into its own hands, took the matter to court and, in 2017, won its appeal. A few months of pouting and regrouping occurred, which culminated in today’s announcement of some new proposed tax levels.

Imagine EE’s surprise then, when Ofcom suggested £908,000 per MHz of 1800, which amounts to £81.72 million – more than EE successfully appealed against! We gather that many people within EE are deeply frustrated by this development, not least because they have been paying the higher license fee level anyway, pending the conclusion of the appeal process.

It seems inevitable the this will go back to court now, but it’s hard to see what new evidence Ofcom can present to overturn the previous ruling. It has certainly laid out a pretty exhaustive case in the consultation document, but what new stuff could it have possibly dug up in the past few months?

The whole reason these license fees seem to exists is that those spectrum weren’t won in an auction so the state didn’t get its pound of flesh. The assumption seems to be that all spectrum should come with a tax burden and if that’s not achieved through auction then other means should be explored. Since Ofcom is always banging on about how operators don’t invest enough in their networks, another idea might be to let them keep the cash for that very purpose. Just saying.