The U.K. government is determined to keep its third-generation licensing time frame despite a ruling from a London High Court judge, who said the government could not force existing wireless operators to grant roaming rights to a new entrant.
The government plans to auction 3G spectrum in January. Earlier this year, in an effort to stimulate strong mobile-phone competition, the Department of Trade and Industry modified licensing plans to include an extra license reserved for a new entrant, which would have a larger license area than the other four licensees and the right to roam onto at least one second-generation network to ensure coverage.
DTI planned to require the country’s four existing operators-Vodafone Group plc, Cellnet, Orange plc and One-2-One-to open their networks to the new entrant or risk being banned from bidding in next year’s auction.
In addition, if the operators did not reach a roaming rate that was acceptable to both, an independent third party would intervene and set the fees.
One-2-One and Orange said the tactic amounted to blackmail and challenged the government’s rights to change terms in their licensing agreements, which did not spell out mandated roaming.
The court agreed, but conceded that roaming rights were important for a new entrant to compete with existing operators.
“The government is determined not to let the benefits of 3G be lost to consumers,” said a DTI spokesman. “The government will work to sustain competition and help provide a level playing field to potential recruits. We are discussing the best way to proceed.”
The government can appeal the court’s decision, though the case is seen as too straight-forward to overturn. DTI also could refer the issue to Oftel, the telecommunications industry’s independent watchdog, which would push the Competition Commission to consider whether mandated roaming is in the public interest. The Competition Commission could then alter the existing operators’ licenses to include compulsory roaming, said a person familiar with the case.
