Three’s head of regulatory affairs is preparing for a legal battle regarding the upcoming spectrum auction.
The self-professed mobile industry ‘maverick’ has been on the offensive regarding Ofcom’s planned sale of available bands of radio wave spectrum. Several weeks back CEO Dave Dyson warned that prices would rise and competition would suffer if EE and Vodafone were able to acquire large amounts of spectrum at the next auction.
Now Stephen Lerner, Three’s general counsel and director of regulatory affairs has told Mobile that the network is convinced EE’s owners BT and Vodafone would take legal action should the regulator decide to rule in favour of Three.
Lerner added that Three would themselves consider legal action if Ofcom decided to place no restrictions on the auction.
‘We’re in a more difficult position because we need the spectrum’ he said, ‘if your BT or Vodafone you don’t need the spectrum. So they could litigate this and keep the award from happening for the next 2 to 3 years. They could throw endless cash at it and potential stop the award of the auction. Who does that benefit? It doesn’t benefit a player like Three that needs the spectrum. It benefits them.
‘I would expect Vodafone and BT to legally challenge any decision of the regulator which provided a safeguard for us. If Ofcom makes the right decision to do something to ensure there’s a more balanced and level playing field. We’ll support Ofcom and take our chances in court.
‘If they make a decision which we consider to be not pro-competitive [legal action] is something we would consider. It’s not something we’ve had any discussion over at the moment, but it’s always an option.’
Parliamentary pressure
The potential to obstruct Ofcom decisions using litigation is something that Three have long complained about. The CK Hutchison owned brand believe this has been a major factor in a number of decisions by the UK regulator.
‘Ofcom has been generally a weak and ineffective regulator for a number because of the fact that there is a much lower standard of appeal than any other regulator’ said Lerner, ‘the government is trying to change that with the digital economy bill, to change the standard of appeal to what other regulators have.’
This is the critical point for Three, their ideal outcome is for Ofcom to put a limit on the amount of spectrum before the next auction and the Digital Economies bill in parliament to pass making it harder for rival networks to challenge Ofcom decisions and hold up the process. However, the network acknowledges that it is unlikely that the timing of both will fall favourably for Three.
Ofcom responds
A spokesperson for Ofcom responded to Lerner’s statements pointing to the consultation on the auction the regulator was currently carrying out: ’Ofcom supports reform of the appeals system for regulatory decisions, which we believe is disproportionate and encourages litigation against consumers’ interests.
‘We want to focus on making communications markets work well for consumers and businesses, rather than engaging in expensive litigation. We think these plans strike the right balance between companies being able to hold Ofcom to account, and Ofcom being able to do the job that Parliament has given it promptly and effectively.
‘We plan to publish a consultation in the autumn, which will set out our plans for the 2.3 - 3.4 GHz spectrum award.’
Both EE and Vodafone said that their position had not changed since Dave Dyson’s comments at the beginning of September.
