Three launches legal challenge over 5G spectrum auction

Mobile operator claims Ofcom's rules are detrimental to UK consumers

UK network operator Three has threatened Ofcom with legal action over its upcoming mobile spectrum auction.

The Telegraph reports that Three's lawyers have hand-delivered a letter to Ofcom which threatens the watchdog with a High Court challenge over its 37 per cent spectrum cap.

Ofcom announced the cap last month, which means that BT and Vodafone, which currently own 45 per cent and 28 per cent of the spectrum currently available, will be restricted in how much of the critical 5G spectrum they can buy up later this year.

At the time, Three - which had called for a 30 per cent cap - described the decision it as a "kick in the teeth for all consumers" and claimed hat Ofcom is "damaging competition, restricting choice and pushing prices up for the very consumers that it is meant to protect."

Three's letter, seen by The Telegraph, formally threatens a judicial review and claims that Ofcom's decision is "liable to be quashed unless it is revoked and remade".

It goes on to allege that Ofcom's plans "fail completely to achieve… the decision's own basic objective of avoiding very asymmetric spectrum shares," adding that the proposed auction rules means that BT could have a share of more than 39 per cent until 2020.

Three confirmed its move to seek a judicial review in a statement given to the INQUIRER.

"We confirm that we intend to seek a judicial review before the UK courts in relation to the competition measures that will apply in the upcoming spectrum auction. Ofcom is aware of the decision," a Three spokesperson said.

"We anticipate a short process and a court decision by early 2018. Ofcom does not expect commercial 5G services in the UK before 2020, so this short process will not impact the availability of 5G to UK consumers.

"It is absolutely vital that the regulator gets this auction right for the long-term benefit of all consumers. For a relatively short process, we feel it is a proportionate response to request an independent review of Ofcom's proposal, which we feel unduly puts at risk its stated objective of a competitive four-player market and is to the detriment of UK consumers."

An Ofcom spokesman retaliated: "Our auction will help support the UK's four-player mobile market, which has provided choice and value to customers for many years.

"We want to see new spectrum in use as soon as possible, so operators can build for the future and the UK can start benefiting from 5G mobile by 2020."

Seperately, The Telegraph reports that O2 last week proposed a new system of temporary licences in a meeting with regulators last week and urged Ofcom to sell temporary licences in the 2.3GHz band, which is immediately usable, that would be handed back once a full sale can take place.