Ofcom consults on award of new spectrum licences and shared spectrum bands - 700 MHz and 3.6 - 3.8 GHz

On 8 February 2019 Ofcom issued a clarification update to its proposed consultation to award 200 MHz of spectrum - with 80 MHz in the 700 MHz band and 120 MHz in the 3.6-3.8 GHz band. The regulator anticipates that this spectrum will be used to meet the increasing demand for mobile broadband services and to invest in the implementation of new wireless technologies such as 5G, the next generation of mobile technologies.

In particular, the 700 MHz band is well suited for improving mobile coverage over wide areas, in buildings and in other places that are hard to reach. The 3.6-3.8 GHz band has been identified as the primary band for 5G services across Europe and would allow network operators to support high data rates and high capacity for a larger number of users. These bands should both become available for use by June 2020.

Ofcom also hopes to use the allocation to encourage the telecommunications industry to provide services with greater capacity and wider coverage. To this end, the regulator is proposing to provide two bidders with discounted auction prices if they commit to substantial coverage obligations aimed at providing better quality services in rural areas of the UK that currently have poor quality service.

The consultation also proposes a "combinatorial clock auction format", which would allow bidders to bid on packages they compose from spectrum lots in the two bands, with or without coverage options. A cap of 416 MHz (37% of the total spectrum available) on the cumulative spectrum for mobile services held by any winner in the auction is also proposed.

The proposal also suggests potential options to facilitate rearrangement of fragmented holdings of spectrum in the 3.4 - 3.8 GHz band, given that the lower part of the band (3.4 – 3.6 GHz) has already been awarded in April 2018 (with all four UK mobile network operators wining blocks of this spectrum). Ofcom's current view is that defragmentation is likely to be best achieved on by commercial spectrum trading between operators.

Ofcom is also consulting on a proposal to make spectrum that supports mobile technology available on a shared basis across a range of spectrum bands. These bands include 3.8-4.2 GHz, the 1800 MHz shared spectrum and the 2300 MHz shared spectrum. The proposal would enable users to access spectrum bands in locations unused by other licensed users. Potential users would be able to make a simple request to Ofcom specifying the bands and locations in which they wanted to operate. Ofcom anticipates that this could improve the quality of coverage in poorly serviced areas and could support the deployment of local networks in sectors such as the Internet of Things, mining, agriculture and logistics.

Ofcom is inviting responses to both consultations by 12 March 2019 and anticipates to have concluded the auction by Spring 2020. Early 2019, Ofcom plan to give formal notice of their proposals to make a number of statutory instruments in connection with the auction, and consult on them.