Home > Consultations > Consultation Documents > 2.6GHz > Executive Summary

Executive Summary

1.1 Spectrum in the 2.6GHz and 2010MHz bands in the UK is expected to play an important role in the development of advanced mobile data services and is of particular interest to operators looking to adopt the next generation of wireless data technologies such as LTE[^(-1-)] and WiMAX.[^(-2-)]

1.2 Making this spectrum available will support the introduction of innovative mobile services and foster competition in the provision of these services in the UK. This has the potential to deliver substantial benefits for consumers and the UK economy as a whole, as well as enabling the UK to remain in the vanguard of European mobile development and deployment.

1.3 We have previously set out our proposals to auction this spectrum on a technology neutral basis, using a flexible auction approach to allow different potential uses to compete efficiently for spectrum.[^(-3-)] These proposals drew a substantial number of comments from stakeholders on a wide variety of issues, including the timing of the award, the technical and non-technical licence conditions that should be applied, the approach to spectrum packaging as well as the auction rules and procedures themselves. We expect to be in a position to make a Policy Statement in respect of all these matters in early 2008, and (subject to that Statement) to invite applications to participate in the award in spring 2008, with the auction itself able to take place in summer 2008.

1.4 This is the same timetable for making the regulations, and holding the award, as previously advised, though we have decided to hold a non-statutory consultation on the draft regulations before proceeding to the statutory consultation. This will allow interested parties an additional opportunity to comment on the draft rules, and will allow us to take account of developments in relation to the Radio Spectrum Committee.

1.5 In light of the stakeholder feedback on the August 2007 Discussion Document, and drawing on comments and questions raised in a workshop on auction rules and procedures that we held on 29 November 2007, we are now in a position to:

• present further detail and, where relevant, updated proposals for the rules and procedures for the auction of the 2.6GHz and 2010MHz bands; and
• demonstrate how these rules and procedures can be translated into the form of draft auction regulations.

1.6 The specific changes and additions to the auction rules and procedures are summarised in the following table.

Subject Area	New / updated proposal
Auction information policy	In addition to the information release proposed in the Discussion Document: release to bidders at the end of each primary round information on bids made on an anonymised basis. announce publicly the base prices paid by each winner at the end of the Principal Stage Provide bidders with information on all possible permutations of how the winning bids at the end of the Principal Stage can be accommodated in the 2.6GHz band. Publish summary auction information e.g. at the end of each bidding day
Changes to eligibility for unpaired lots	Change (reduce) the eligibility points associated with bids for unpaired spectrum to account for the lot(s) with restricted usage rights: the eligibility associated with n unpaired contiguous lots is n-1; and the eligibility associated with n unpaired lots in two contiguous blocks (in a split bid) is n-2.
Pricing algorithms and winner determination	Minor changes to the pricing algorithm used in the Assignment Stage.[(-4-)]
Deposits and bidder default	Set deposits in the Principal Stage to no more than 50% of a bidder’s highest bid value, with refinements to the rules and penalties for bidder default. Deposits for participation in the Assignment Stage remain at 100%.
Bidder association	Allow an entity that holds a material interest in several applicants or bidders to “opt out” of the relevant bidder groups under certain conditions designed to safeguard the integrity of auction process so as to comply with the requirement that an entity cannot be an associate of more than one bidder group.
Spectrum cap	Adopt a spectrum cap that is equivalent to 80MHz of unrestricted spectrum in the 2.6GHZ band (i.e. up to 90MHz in the case of a split, unpaired assignment that contains two restricted lots). This brings the cap into line with the revised treatment of eligibility points in respect of unpaired lots.

Question 1: Do you agree with Ofcom’s proposals for changes to the rules and procedures for the award of the 2.6GHz and 2010MHz band or have any other comments on the contents of this document?

1.7 A number of other suggestions were made by stakeholders for changes or additions to the rules and procedures which we are presently not minded to implement. We explain our reasoning in these cases and set out questions which give stakeholders an opportunity to comment further if they wish to do so. In addition, stakeholders raised some points on the technical conditions for use of the 2.6GHz spectrum which we are still considering and which could potentially alter details of the auction approach. However, for reasons explained in Section 2, the potential for such changes does not dilute the value of consulting on the revised auction rules set out in this document.

1.8 The effects of the changes in the above table are captured in a revised description of the auction rules and procedures presented in Annex 6 of this document. These revised rules and procedures are then expressed in the form of draft auction regulations in Annex 7. We expect these to resemble closely the draft of auction regulations on which we will hold a statutory consultation at the time that we publish our Policy Statement for this award. Accordingly, we invite stakeholder comments on whether the draft auction regulations presented in Annex 7 provide an accurate representation of the auction rules and procedures set out in Annex 6 and whether there are any ways in which they could or should be adjusted. This feedback will help to increase the effectiveness of the subsequent statutory consultation process.

1.9 This consultation marks an important step forward in the award of these bands. However, we have not taken any decisions at this point, either on the timing of the award, on the precise form of the award or on the conditions attaching to the licences which will be awarded. However, as noted above, we expect to be in a position to make a Policy Statement in the first months of 2008.

1.10 A number of responses to our August 2007 Discussion Document commented on the relevance of European regulatory discussions on technical conditions for mobile bands taking place under a mandate from the European Commission. The CEPT regulatory group SE42 has recently completed its report under this mandate on spectrum masks for the 2.6GHz band. The publication of this consultation document provides us with the opportunity to summarise the SE42 spectrum masks which we are proposing to apply for the 2.6GHz award in the UK. Whilst there are some differences to the masks proposed in our August 2007 Discussion Document we do not believe that their adoption will require any change to the proposals for auction design and spectrum packaging.

Footnotes:

1.- Long Term Evolution, the planned successor to 3G/UMTS technology

2.-Worldwide Interoperability for Microwave Access, a family of fixed, nomadic and mobile communications technologies based on IEEE 802.16 standards.

3.- A Consultation Document in December 2006 ( http://www.ofcom.org.uk/consult/condocs/2ghzawards/) and a Discussion Document in August 2007 ( http://www.ofcom.org.uk/consult/condocs/2ghzdiscuss/)

4.- Note that, in the calculation of base prices, modified bids can be negative.

The full document is available below

• Award of available spectrum: 2500-2690MHz,2010-2025MHz [pdf]
  Consultation on auction rules, procedures and draft Regulations

Back to top