Shadow minister slams government over 4G auction

Helen Goodman claims the government is losing £1m in revenue a day

Labour's shadow minister for media, Helen Goodman, has issued a damning statement on the government's handling of the 4G spectrum auction, claiming that its slow progress is costing the taxpayer hundreds of millions of pounds in lost revenue each year.

Goodman argues that the 4G auction, which has been delayed until Q4 2012, could raise between £2bn and £4bn in capital, as well as generate about £300m a year in licence fees.

"The auction could have taken place in 2010 but this government decided not to give Ofcom the backup to go ahead with the sale of 4G," said Goodman.

"Consumers need better mobile coverage, particularly in rural areas, and it is disappointing that it has taken the government 18 months to get on with the auction," she added.

"At a time of deep cuts to the public sector, the government is in effect losing almost £1m in revenue a day. We will be one of the last major countries in Europe to get 4G coverage, which is shameful because Britain is one of the largest producers of mobile phone technology in the world."

However, the delays have actually been the result of ongoing conflict between the network operators about how and when the auction should take place, and arguably the government's response, and subsequent Ofcom consultations, have aimed to ensure it is conducted fairly and competitively.

Goodman's comments follow Ofcom's second consultation document on the 4G spectrum auction released yesterday. This revealed that Ofcom has now decided not to reserve 800MHz spectrum for network operator Everything Everywhere.

The first consultation, carried out between March and May 2011, had guaranteed Everything Everywhere access to sub-1GHz spectrum to ensure it was a credible national wholesaler following the auction.

However, Ofcom now claims it miscalculated the risk and because Everything Everywhere already holds a significant amount of 1800MHz spectrum, which can be used for 4G rollout, Ofcom no longer needs to reserve this 800MHz spectrum for it in the run-up to the auction.