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Disappointing 4G auction to be investigated by National Audit Office

Category : Business

Auction generated £2.3bn in June – £1.2bn short of Treasury expectations

The National Audit Office is to investigate the low amount raised by Ofcom’s auction of the 4G airwaves, which in June generated £2.3bn – a total of £1.2bn less than the Treasury had forecast, and £3bn less than the theoretical maximum.

In a letter seen by the Guardian, the NAO’s auditor general, Amyas Morse, told the Labour MP Helen Goodman, shadow minister for media and communications: “I intend to conduct a value-for-money study of Ofcom’s recent auction of 4G spectrum.”

The Treasury’s forecast of £3.5bn from the auction was included in the government finances in the autumn statement last December, and allowed the chancellor, George Osborne, to claim that government borrowing was falling.

The Guardian understands that the NAO is preparing the terms of an investigation after complaints from Goodman, who pointed to remarks by the Ofcom chief executive, Ed Richards, indicating the government had not made maximising revenues the prime aim of the auction.

“By not making maximising the auction’s revenues an objective for Ofcom, the government has failed to get value for money on this project,” Goodman complained to Morse.

The 4G auction sold off more radio spectrum than ever before to bidders including the four main mobile networks and BT. By comparison the 3G auction in April 2000 raised £22.5bn.

Figures published by Ofcom in March showed that the highest bids for 4G spectrum came to a total of £5.2bn. But Ofcom said those were only theoretical because it was using a rule whereby winners only paid slightly more than the second-highest bidder – similar to an eBay auction – a measure taken to make the auctions harder to rig.

Goodman said she welcomed the NAO’s intervention: “It is entirely right that the National Audit Office has launched this investigation. Serious questions must be answered as to why the Conservative-led government ended up £1bn short of the estimate George Osborne had provided just months earlier. When the 3G auction took place, Labour ensured that maximising revenue was an objective. The Conservative-led government did not do the same for the 4G auction, which I believe was a serious mistake.”

Some sources at bidders felt that the design of the auction, using a system known as “combinatorial clock” – which has been used in other countries to sell off 4G airwaves – not only worked against maximising revenue but was also unsatisfactory for bidders. “[Ofcom] neither raised the amount that the government was looking for, nor did it ensure that spectrum found its way into the hands of everybody who wanted it,” one bidder said.

Their dissatisfaction could also become part of the study. Morse told Goodman that Ofcom had “a responsibility to ensure that the auction delivered an economically efficient allocation of spectrum”.

The allocation after the auction means that Vodafone’s share of all UK mobile spectrum has leapt from 23% to 28%, while that of its rival O2 has dropped from 20% to 15%, and that of the smaller Three network from 18% to 12%.

Though the NAO does not have the power to order a rerun of the auction, a report will go to the Commons public accounts committee, which in turn can censure the government and demand a response from Osborne.

Ofcom defended the auction. A spokesman said: “The 4G auction was a success, which will deliver the maximum benefit to UK citizens and consumers – in line with Ofcom’s statutory duties. It will create competition, with five companies able to launch competitive 4G services. This will lead to investment in new services, greater innovation and lower prices, plus enhanced coverage with a rule to cover almost all of the UK population by 2017 at the latest.

“The auction was designed to promote competition and ensure coverage, rather than to raise money.”

A Treasury spokesman said it was the Office for Budget Responsibility, not the Treasury, that estimated the auction would raise £3.5bn. He also said that, even if the actual figure raised had been available at the time of the autumn statement, the Treasury would still have been able to say it was on course to lower borrowing.

Spectrum revenue

Category : Business

Juliette Garside (Report, 16 March) suggests George Osborne could have got £3bn more than he did selling the 4G spectrum. Whatever the benefit to the public purse it was always a myth that the public would benefit from this sale since whatever was paid for 4G by the operators would be passed on to their customers in the form of higher bills. Using this revenue to keep petrol increases down would simply shift a Treasury revenue-raising impact from car drivers to smartphone users.
Stephen Barker
Napton, Warwickshire

• The 4G auction was never designed to maximise income. Ofcom’s auction was structured to ensure strong competition and efficient use of mobile spectrum, and that is exactly what it has achieved. Five companies acquired spectrum for 4G services, which will deliver greater value to consumers, businesses and the economy than any short-term revenues.
Graham Louth
Director of spectrum markets, Ofcom

Vecima Receives Notice of Legal Proceedings

Category : World News

VICTORIA, BRITISH COLUMBIA–(Marketwire – Dec. 18, 2012) - Vecima Networks Inc. (“Vecima” or “the Company”)(TSX:VCM), a leading designer and manufacturer in the broadband cable and wireless network infrastructure
Market, announced today that it has been named as a defendant in legal proceedings filed in the Supreme Court of Ontario by Inukshuk Wireless Partnership (“Inukshuk”). Inukshuk alleges in the legal proceedings, among other things, that an agreement existed for Vecima to sell to Inukshuk certain radio spectrum and that Vecima did not comply with that agreement. In the legal proceedings, Inukshuk is seeking, among other things, an order requiring Vecima to sell the radio spectrum to Inukshuk, an injunction preventing Vecima from selling the radio spectrum to any other person, and monetary damages.

Originally posted here: Vecima Receives Notice of Legal Proceedings

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Sprint would be spectrum king with Clearwire deal

Category : Stocks

If Sprint buys all of Clearwire, it would own the rights to the most spectrum in the United States. But there are questions about how value the spectrum is.

Originally posted here: Sprint would be spectrum king with Clearwire deal

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TVs will need retuning again to make room for mobile services

Category : Business

Mobile networks demand greater share of airwaves to connect phones to internet, leading to fears of ‘capacity crunch’

You may only just have worked out how to use your set top box after the digital switchover, but there is bad news for the nation’s TV lovers on the horizon – it will soon be time to adjust your television sets again.

It took five years of wall-to-wall advertising and engineer visits to complete the digital switchover, which saw flatscreen digital televisions replace bulky cathode ray sets. Now the telecoms watchdog is warning viewers of more disruption.

Mobile networks want a larger chunk of airwaves to connect phones to the internet, and television services on Freeview, BT and TalkTalk will have to move over to make room. Set top boxes will need to be retuned, some rooftop aerials will need replacing and filters may need to be fitted to homes near masts to prevent mobile interference.

Regulators said they would work to minimise the disruption, but the advent of the smartphone is ramping up the amount of data consumed over the airwaves, and there are fears of a “capacity crunch”.

With smartphone owners now using the small screen to shop, socialise, email and even watch television, mobile networks are pumping out 20m gigabytes of data a month, the equivalent of 5bn music tracks. The auction of 4G spectrum for superfast mobile internet will not be held until January, but planning is already under way for 5G services to cope with ballooning traffic.

“Within the coming months we will hold the UK’s largest ever auction of mobile spectrum for 4G. However that may not be enough to meet consumers’ future data demands, which is why we are already making significant efforts to prepare to go beyond 4G,” said the Ofcom chief executive, Ed Richards. “Our plans are designed to avoid a capacity crunch.”

In the hunt for more spectrum, technicians have set their sights on the airspace occupied by television. The changes are unlikely before 2018, but will represent a third wave of disruption for the country’s 20m Freeview homes.

First there was digital switchover, when the signals sent from masts to aerials were changed, requiring every home to install a set top box if they had not already bought a new digital television. The process ended in October, but is about to start again. Over the coming months, to make way for 4G services, digital TV is being squeezed out of the airspace it currently occupies. Before that switch even takes place, Ofcom is saying the signal will have to move again in six years’ time.

Spectrum is divided into bands, and mobile is occupying an increasing number of them. Television sits in the 800 megahertz band, and by the end of next year will have been moved to the 700MHz band.

Up to £180m is being set aside from the proceeds of the mobile auction to help 900,000 homes near masts that could be affected. Filters will need to be fitted, in some cases on to rooftop aerials by engineers.

In a process which one industry watcher described as “mindboggling”, the announcement means the switch will need to be repeated a third time, with television possibly moving into the 600MHz band.

The Freeview chair, Charles Constable, said television had become the poor relation to mobile. “Ofcom has yet to make the case to justify today’s proposed long-term changes to allocate more future spectrum to mobile use, especially given the disruption they will cause to Freeview viewers.”

Mobile spectrum auctions raise billions. The 3G sale in 2000 saw operators hand over £22.4bn to the Treasury, and January’s 4G sale could bring in up to £4bn.

Questions are increasingly being asked about whether television will remain airborne. A House of Lords report has suggested the nation start planning for a day when all channels, including the BBC, are broadcast only via the internet.

Ofcom vowed to “seek to ensure the long-term future of digital terrestrial TV”, saying it provided low cost, universal access to public service channels.

Sharp contrast in UK house prices

Category : Business, World News

London and Northern Ireland stood at each end of the spectrum of house price changes over the past year, official figures show.

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4G mobile internet to be launched by Everything Everywhere

Category : Business

Ofcom expected to allow owner of T-Mobile and Orange networks to sell service, giving them advantage over rivals

The UK could be getting its first taste of 4G superfast mobile internet within months with the telecoms regulator Ofcom expected to announce on Tuesday that it will allow Everything Everywhere, the owner of the T-Mobile and Orange networks, to launch the service, potentially ahead of rivals.

In a week which is likely to see a significant reshaping of Britain’s mobile spectrum landscape, Everything Everywhere is also close to selling a chunk of its airwaves to the UK’s smallest and operator, Three.

EE has applied to Ofcom to be able to use some of its existing spectrum for 4G services. The company has been installing the necessary equipment since the beginning of the year and already has some major population centres covered.

If given the go-ahead , the company would be ready to start selling 4G services to customers before Christmas. Rivals say this could give a massive advantage to what is already the UK’s largest operator with 27 million customers.

Vodafone and O2 say they will have to wait until the forthcoming 4G spectrum auction, which could raise as much as £4.5bn for the public purse, before acquiring enough airwaves to launch their own services. The airwaves being auctioned are currently used for digital television and will not be freed up for mobile signals until later next year.

As EE combines the holdings of two networks, it has a large amount of spectrum in the 1800 band, which is well suited to 4G. The new technology is a successor to 3G, which allowed connections to the internet on mobile phones for the first time when it was introduced a decade ago. Networks are promising that 4G will bring even faster download speeds, helping networks keep up with the growing demand for data from smartphones.

Ofcom said in March it was “minded” to approve liberalisation of the 1800 band, currently licensed for 2G and 3G services. However, after protests from rivals that EE would have an unfair first mover advantage, it extended the consultation period. EE had originally hoped to have its service running this autumn, having applied for liberalisation last November.

Ofcom is thought likely to approve EE’s request, although it may impose conditions such as a later launch date than the company is hoping for.

Meanwhile, sources have confirmed that EE is on the verge of announcing a deal with Three, owned by Hong Kong conglomerate Hutchison Whampoa. The European commission had ordered EE to sell a quarter of its 1800 holding as a condition of approving the T-Mobile/Orange merger .

Vodafone and O2 also bid for the spectrum, but it is thought they have missed out. The sale, arranged by EE’s financial adviser Morgan Stanley, would not necessarily allow Three to launch 4G this year. This is because EE is not obliged to clear the spectrum until September 2013.

A spokesman for Three said: “We are interested in all mobile spectrum”, but declined to comment on any deal with Everything Everywhere.

AT&T (T) once more provokes a consumer backlash by stating Apple’s (AAPL) FaceTime video-calling app can only be used over its network by users subscribed to a costly shared data plan. “Exceptionally hostile to net neutrality,” declares The Verge….

Category : World News

AT&T (T) once more provokes a consumer backlash by stating Apple’s (AAPL) FaceTime video-calling app can only be used over its network by users subscribed to a costly shared data plan. “Exceptionally hostile to net neutrality,” declares The Verge. Perhaps it’s fitting the move comes a day after BGR argued AT&T was more inept at PR than Verizon (VZ), in light of the latter’s ability to win regulatory approval for its spectrum purchases, and the former’s failure to do so for the T-Mobile acquisition. 3 comments!

Link: AT&T (T) once more provokes a consumer backlash by stating Apple’s (AAPL) FaceTime video-calling app can only be used over its network by users subscribed to a costly shared data plan. “Exceptionally hostile to net neutrality,” declares The Verge….

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VIDEO: 2G auction to push up Indian mobile bills

Category : Business

India’s telecoms sector is back in the news as the government fixed the base price for the auction of the second generation, or 2G, spectrum.

Read the original post: VIDEO: 2G auction to push up Indian mobile bills

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Spectrum Brands Holdings (SPB) declares special dividend of $1.00/share. For shareholders of record Aug 27. Payable Sep 18. Ex-div date Aug 23. (PR)

Category : World News

Spectrum Brands Holdings (SPB) declares special dividend of $1.00/share. For shareholders of record Aug 27. Payable Sep 18. Ex-div date Aug 23. (PR) Post your comment!

See original here: Spectrum Brands Holdings (SPB) declares special dividend of $1.00/share. For shareholders of record Aug 27. Payable Sep 18. Ex-div date Aug 23. (PR)

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