Ofcom Tries To Reach Middle Ground On Spectrum Licenses
By Mike Masnick, Fri Jan 14 01:30:00 GMT 2005

While it may look like Ofcom wimped out a bit today by refusing to either loosen 3G license rules or to revoke 3G licenses, it's actually taking a reasonable middle ground.

Spectrum allocation policy is in the news quite a bit these days, all over the world. As more people realize that mobile technologies are a central part of many new innovations, spectrum policy is increasingly important. Generally, this has taken the form of complaints that whatever spectrum policy is being used is somehow harming innovation. Business Week, for example, is trashing the way the FCC has handled spectrum allocation in the US, and recommends moving it to a more free-market model. What that article misses, however, is that this is exactly what UK telecom regulator Ofcom is trying to do in that country.

Ofcom was in the news again today for outlining in more detail how it expects to respond to violations of the original regulations it created for the 3G spectrum licenses it auctioned off years ago. This rumored relaxing of the rules has, of course, upset 3, who actually followed the rules -- a strategy that has resulted in them losing lots of money.

Specifically, Ofcom said it won't really relax the rules, but it won't go so far as to take away the spectrum licenses for those who don't meet the rules. That doesn't mean there won't be other punishments -- but there seems to be a recognition that revoking the licenses goes too far. Like just about any "compromise" this one is likely to upset companies on all sides of the discussion -- though, mmO2 clearly breathed a loud sigh of relief, in discovering it's unlikely to lose its licenses. Either way, this is yet another sign of how Ofcom views spectrum allocation policy these days. It's called "being realistic."

By initially moving towards that open market spectrum policy, and now more or less admitting that some of its initial regulations for 3G licenses were too strict, Ofcom is saying that it wants the spectrum in use, but it wants the market to decide when and how. The original requirements for the 3G licenses, were obviously too aggressive. Neither the technology nor the market were ready. However, since some did try to follow the rules, it would be unfair to give those who didn't a completely free pass -- and today's ruling makes that clear. In other words, Ofcom was quietly admitting its own mistake, and doing the best it could to fix things, while still keeping everything as fair as possible. It won't make anyone happy now, but it might mean that the spectrum is put to the best possible use -- and, in the end, that should make everyone better off.