21 September 2017
| James Pearce
BT’s EE has launched legal action against UK regulator Ofcom over rules introduced that limits the amount of spectrum the mobile operator can bid for in an upcoming auction.
Ofcom is already facing legal
action from CK Hutchison-owned operator Three UK over the same
rules, which will impact the auction of spectrum in the 2.3GHz
and 3.4GHz bands.
A source at EE confirmed to Capacity that it has
now filed for a judicial review into Ofcom’s
auction rules, with the case expected to be heard in a high
court at the end of November.
Ofcom’s regulations limit mobile phone
companies from owning more than 37% of usable spectrum
available by 2020, with BT reportedly holding around 42% of the
current amount. Vodafone holds around 29%, while Three owns 15%
and O2 owns 14%.
BT has already ruled out making bids in the 2.3GHz band in
order to appease Ofcom, but has launched legal action partly in
response to Three’s own judicial review, which it
announced earlier this month.
EE initially said it would not dispute Ofcom’s
rules because any legal action could delay future deployments,
but given Three’s decision to go ahead with a
review, EE has also launched a legal bid.
Sources close to the operators told Capacity that
the two cases, which are inextricably linked, will be heard
together – likely at the end of November –
with the case expected to take no longer than two weeks. One
source said the government has prioritised the case due to
fears of the impact a drawn-out process would have on future
deployments of 5G technologies.
In a statement released last month, EE CEO Marc Allera said
the operator "cannot allow a competitor to opportunistically
seek to further constrain our ability to invest in spectrum," a
pre-cursor to launching its own action.
Sources close to Three claimed it was not trying to delay
the auction – 5G will not rollout in the UK until 2020
anyway, it claims, meaning a delay of a few weeks will have
only a minor impact – but rather protect its customers
and its business.
The source argued that BT will not be prevented from bidding
because the current restrictions only apply to certain bands,
and BT will only surpass the cap when the 700MHz band is
included in 2020 – by which time Ofcom will have
carried out an additional review of the restrictions.
EE and Three did not give a statement on the current legal
action, but Ofcom said: ""It is very regrettable that the
auction will now be delayed by this litigation, which will harm
consumers, businesses and ultimately the UK economy. We hope
this matter can be resolved promptly, so that we can release
the spectrum as soon as possible."