1. Ruling the (Air)waves: Ofcom announces further plans for mobile spectrum

Ofcom has announced plans to: (a) conduct an auction of 190MHz of radio spectrum being transferred from Ministry of Defence to civilian use; and (b) make spectrum in the 700MHz frequency band available for mobile broadband services.

As part of its spectrum management strategy paper released in April 2014, Ofcom identified six sector-focused priority areas that will require particular regulatory attention over the coming 10 years, including: (a) implementing Ofcom's strategy for the 700 MHz band and considering the evolution of free-to-view TV; and (b) supporting the Government’s Public Sector Spectrum Release ("PSSR") programme.

Ofcom has now made two key steps in relation to those priority areas with the announcement of the repurposing of spectrum in the 700MHz frequency band, and the auction of spectrum in the 2.3GHz and 3.4GHz frequency bands, previously held by the Ministry of Defence. Following relatively soon after the 4G auction process, it appears that the consumer demand for mobile data is resulting in more and more radio spectrum being made available for mobile services.

Public Sector Spectrum Release

At the start of November, Ofcom announced the release of new public sector spectrum bands for civilian use in order to meet increasing demand for mobile data services. The spectrum, in the 2.3GHz and 3.4GHz bands, was previously held by the Ministry of Defence and is being released as part of the PSSR programme. Following release, it is anticipated that the spectrum will be auctioned in late 2015 or early 2016 and, in advance of such an auction, Ofcom has published a consultation (the "Consultation") inviting comments on the proposed auction design, licence conditions and competition assessment for the spectrum.

Ofcom is offering 150MHz of spectrum in the 3.4GHz band and 40MHz of spectrum in the 2.3GHz band. Both are frequencies which would be suitable for providing very high data capacity, and so could host the internet services of customers' smartphones and tablets. The 2.3GHz band is already accommodated by a number of major phone manufacturers' handsets, including the Apple iPhones 5 and 6, HTC Desire and Samsung Galaxy; this is likely to add to the desirability of the spectrum on auction.

Ofcom has proposed that the spectrum will be auctioned in 5MHz lots, with bidders required to commit to a minimum requirement of up to 20MHz. However, given the likely use of the frequencies for mobile broadband services, Ofcom has also proposed a spectrum cap to prevent successful bidders from exercising undue influence on the market to consumers' detriment. Ofcom has proposed an overall cap of 310MHz, being the amount of mobile spectrum which may be held by any one company. Ofcom specifically states that this constraint is aimed at EE and Vodafone, although it believes that such a cap still allows those organisations sufficient flexibility to enter a bid.

Ofcom has also confirmed that it will amend the Mobile Spectrum Trading Regulations to allow trading of spectrum in the 1.4GHz, 2.3GHz and 3.4GHz frequency bands.

The deadline for interested bidders to respond to the Consultation is 23 January 2015.

Repurposing the 700MHz Frequency Band

Separately to the announcement regarding public sector spectrum, Ofcom has announced its decision to repurpose spectrum in the 700MHz band to make it available for mobile data use. The decision follows Ofcom's consultation on the issue in May 2014 and an on-going international debate about the use of the frequency band. Countries across Latin America and the Asia Pacific region have already decided to make the 700MHz band available for mobile data, as have a number of European countries such as France, Germany, Sweden and Finland. Confirmation of a co-primary allocation for mobile and broadcasting in the 700MHz band in ITU Region 1 (Europe, the Middle East and Africa) by the ITU is also expected to take place at the World Radiocommunication Conference in 2015.

In the UK, the 700MHz band is currently used to deliver DTT and making the band available for mobile data will mean that DTT can no longer use this spectrum. However, Ofcom has confirmed that it intends to ensure that reducing the spectrum available to DTT does not materially affect coverage or channel line-up and that any significant disruption to viewers is avoided.

Whilst the news that the 700MHz band will be made available for mobile data will be welcomed by the MNOs, the timeframe for implementation is long. Ofcom's objective is to make the spectrum available by 2022 and considers it likely that an auction of the available spectrum will be conducted up to two years before the spectrum starts to become available, to try and give MNOs certainty as to their future spectrum holdings and enable them to plan network investment more efficiently.

Business Impact

Both announcements will come as welcome news for mobile operators in the UK. However, at the same time, frictions between the long timescales involved, the pace of growth of demand for mobile data services, and the fast pace of technology developments are likely to persist. Ofcom has already stated in its spectrum management strategy that it expects to see a continuing emphasis on re-purposing the use of some spectrum bands as an important means of addressing changing spectrum needs. However, such processes take a long time and do not provide an immediate solution for MNOs looking to increase their spectrum holdings and expand their networks.

To view a copy of the Consultation regarding the 2.3GHz and 3.4GHz auction, please click here.

To view a copy of the Statement regarding repurposing of the 700MHz band, please click here.

2. Roaming free: New law on national roaming proposed by UK government

The Department for Culture, Media and Sport ("DCMS") has undertaken a consultation on legislation to force mobile phone operators to share phone masts in remote areas where there is weak signal.

According to the DCMS paper (the "Consultation"), partial not-spots currently affect 21% of geographic landmass in the UK. Following completion of Project Beacon, Vodafone and O2's infrastructure sharing project, the DCMS estimates that this will reduce to 13%. However, the Consultation examined three potential measures to further reduce the problem of partial not-spots:

  • Addressing Coverage (i.e. infrastructure sharing): This options refers to the shared use by multiple MNOs of equipment within a shared compound including site sharing, mast sharing and full radio access network sharing. Government would by preference look to MNOs to agree an ambitious programme of passive infrastructure sharing as part of this solution. However, in the absence of such agreement, Government may direct Ofcom to vary the terms of the Wireless Telegraphy Act licences held by the MNOs to include a coverage obligation that would require the licensees to achieve a level of geographic coverage equal to the combined figure for all MNOs.
  • Multi-Operator MVNOs: Under this solution, a multi-operator MVNO would have agreements with two or more MNOs to provide access to their network. This kind of MVNO model does not currently exist in the UK, mainly because agreements between MNOs and MVNOs generally include exclusivity provisions which prevent the MVNO from reaching simultaneous agreements with other host MNOs. In order to ensure that existing MVNOs and new entrants are able to operate on an MO-MVNO model, Government would look to MNOs and MVNOs to ensure that agreements do not contain the exclusivity provisions described above. As an enabling measure, Government would direct Ofcom to vary the terms of Wireless Telegraphy Act licences held by the MNOs to provide that MNOs, when entering into agreements with MVNOs for voice and text, will not restrict the right of an MVNO to enter into agreements with other MNOs and that the terms of any agreement are fair and reasonable.
  • National Roaming: Under this solution, the coverage provided by one or more MNOs in a partial not-spot would be made available to customers of all other MNOs. There are two broad types of national roaming available, seamless and non-seamless. Seamless roaming means that calls are not dropped when the phone moves between networks. Non-seamless roaming would mean that the call is dropped when the home network becomes unavailable and the user would need to dial again once a connection to a roaming network has been made. Ofcom have advised Government that national roaming (particularly on a non-seamless basis) is technically feasible and Government considers that national roaming could make a significant contribution to extending coverage for consumers. Whilst discussions with MNOs have reflected a clear desire by the MNOs to improve coverage for their customers there has been no willingness to deliver national roaming on a voluntary basis. Government is therefore considering mandating national roaming. This would make it obligatory for MNOs to share the coverage in partial not-spots. In order to achieve this, Government would direct Ofcom by way of secondary legislation to vary the licences of MNOs by requiring MNOs to enable non-seamless roaming in areas where there are partial not-spots.

The DCMS stated that Government does not have a preferred option and was keen to hear views on all the proposals. The Consultation closed on 26 November 2014.

To view a copy of the Consultation, please click here.

3. Putting the plural into plurality: Ofcom consults on measurement framework for media plurality

Ofcom has undertaken a consultation on the development of a measurement framework for media plurality in the UK.

The issue of media plurality in the UK has been the subject of on-going policy debate for a number of years, culminating in 2013 with the Department for Culture Media and Sport consulting on how to measure media plurality. Having established the scope for a measurement framework for media plurality through the conclusions of this consultation, the Secretary of State asked Ofcom on 9 September 2014 to develop the framework itself.

Ofcom previously advised on measuring media plurality in 2012, following its consideration of plurality in relation to the proposed NewsCorp/BSkyB merger. In that advice, Ofcom recommended a set of metrics centred around three categories (availability, consumption and impact) alongside a consideration of relevant qualitative factors. Ofcom considers that its initial advice from 2012 is still relevant to the current request from the Secretary of State and should form the starting point for its current work.

The views gathered by Ofcom through this consultation will inform its analysis on how to build on the 2012 advice. This will lead to a set of proposals for the indicators to include in the measurement framework. Ofcom plans to consult on these proposals in the first quarter of 2015.

Developing a measurement framework will allow a baseline assessment of the state of media plurality in the UK to be undertaken.

The consultation closed on 27 November 2014.

To view a copy of the consultation, please click here.

4. Becoming a Nuisance: Consultation on marketing calls

On 25 October 2014, the Department of Culture, Media and Sport launched a consultation on lowering the threshold for financial sanctions against those who illegally send electronic direct marketing (the "Consultation").

Direct marketing is controlled by the Privacy and Electronic Communications (EC Directive) Regulations 2003 (the "Regulations"). Currently, if a person breaches the Regulations, the Information Commissioner's Office ("ICO") can only issue a civil monetary penalty ("CMP") if the following conditions are met:

  • the Regulations were seriously breached;
  • the contravention causes substantial damage or significant distress; and
  • the contravention was committed deliberately or recklessly.

This high threshold for a CMP has meant that only six organisations have been issued with a CMP since January 2012. In one case, a £440,000 CMP for illegal direct marketing was overturned by the Information Rights Tribunal on the basis that the illegal direct marketing only caused "widespread irritation", as opposed to "significant distress". The ability of the ICO to regulate effectively appears to therefore be limited by the high threshold for issuing a CMP.

In response to this problem, the Consultation proposes three options:

  • Do nothing;
  • Lower the threshold of "substantial damage or significant distress" to "annoyance, inconvenience or anxiety"; or
  • Remove the threshold completely.

Under the third option, the ICO would still need to be satisfied that there had been a serious contravention and that this had been deliberate or the person knew that there was a risk that the contravention would occur, but failed to take reasonable steps to prevent the contravention. However, it is the approach that would allow the ICO the greatest scope to enforce the Regulations, and is therefore the initial preference of the ICO and the Department of Culture, Media and Sport.

Responses to the Consultation are requested by 6 December 2014.

To view a copy of the Consultation, please click here.