Variation of UK Broadband’s 3.4 GHz Licence

  • Start: 13 June 2014
  • Status: Statement published
  • End: 25 July 2014

This statement sets out Ofcom’s decision to approve a request by UK Broadband Limited for a variation to the terms and conditions of its 3.4 GHz radio spectrum licence. The variation extends the duration of the licence for an indefinite period beyond the previous expiry date of July 2018.

The UK Broadband 3.4 GHz licence authorises the use of 40 MHz of radio spectrum in two separate 20 MHz blocks at 3480 to 3500 MHz and at 3580 to 3600 MHz. Our decision to grant an indefinite extension to the licence follows proposals set out in a consultation document published in June 2014.[1] The extended licence will be subject to an annual licence fee commencing from the original expiry date (i.e. from July 2018).

Our consultation considered the benefits to consumers that would arise if the licence were extended and UK Broadband proceeded with its investment in a new broadband network. We weighed this up against the potential costs – including the potential spectrum inefficiencies that may arise as a result of the non-contiguous nature of UK Broadband’s 3.4 GHz holdings. In setting out our proposals, we said that the benefits to consumers of granting the extension outweighed any potential costs.

Following consideration of the consultation responses and further assessment of relevant factors, this statement sets out our decision to proceed with the licence extension. That decision, and the analysis which supports it, takes account of the full range of our statutory duties.

Having considered the evidence, we believe that it is more likely that UK Broadband’s investment will go ahead if the licence extension is granted than if it is refused.

Among the potential benefits we expect to arise from UK Broadband’s investment are the delivery of faster broadband speeds in under-served areas; lower prices for broadband; provision to under-served customers (students, the less well-off etc.); additional end-to-end competition in the market for fixed broadband; and the quicker development of new equipment capable of using the 3.4 GHz band. Additionally, we consider UK Broadband’s use of new technology in the 3.4 GHz band and the ability of its customers to subscribe to fast broadband without the need for a land-line as innovative approaches.

We also note the likelihood that there will be synchronisation between different users of the 3.4 GHz spectrum band. This makes it likely that much of the potential for spectrum inefficiency we identified in our consultation, related to UK Broadband having a split frequency assignment, will be mitigated.

We have also considered what would happen if we did not extend the licence and the frequencies were auctioned. While it is possible that an operator other than UK Broadband might then acquire the spectrum, and might obtain more value from the frequencies than UK Broadband, this is uncertain. In any case, such use would not be realised for some time.

UK Broadband on the other hand is a current active user of the spectrum already beginning to roll out new services to customers, and planning further significant investment. A decision to reject the licence extension risks these clear consumer benefits not being extended to other customers – and without any certainty about whether the same level of competition, innovation or investment will come about through another spectrum user.

We also note that UK Broadband’s licence comprises only 40 MHz of spectrum within a total of 190 MHz of spectrum suitable for broadband use in the 3.4 GHz band. The forthcoming auction of the other 150 MHz means alternative operators will still have an opportunity to obtain 3.4 GHz spectrum. The granting of a licence extension to UK Broadband does not affect this.

We have therefore decided to grant an indefinite extension to the spectrum licence held by UK Broadband in the 3.4 GHz band.


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Responses

Responder name Type
Airwave.pdf (PDF File, 14.7 KB) Organisation
BT.pdf (PDF File, 149.3 KB) Organisation
Ministry_of_Defence.pdf (PDF File, 14.5 KB) Organisation
Simon_Hughes_MP.pdf (PDF File, 26.3 KB) Organisation
Stephen_Timm.pdf (PDF File, 12.7 KB) Organisation
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