O2’s legal challenge to UK auction is not a one-off

The UK’s regulator has had a frustrating couple of months in its efforts to assign the 700 MHz and 3.6 – 3.8 GHz bands.

For a start, the Coronavirus pandemic has made it harder to get anything done, especially something as sensitive as a spectrum auction. In response to the pandemic, mobile operator Vodafone further undermined Ofcom’s plans by calling for the auction’s cancellation in favour of a beauty contest. Its rationale was that operators could more quickly put the spectrum to use if it was assigned directly, rather than auctioned.

Its competitor, O2, has now gone further and has told Ofcom it may sue the regulator over block sizes.

These nuisances might be a surprise to some spectrum managers seeing as one of the main advantages of spectrum auctions over other assignment methods is its supposed resistance to legal challenge. The criteria used for beauty contests, for example, can be subjective and open to interpretation, whereas a spectrum auction creates clear winners and losers.

But in an analysis of spectrum auctions, we find the history of spectrum auctions littered with lawsuits related to state aid, spectrum caps, and reserve prices, among other things.

The research note, Spectrum auctions are not immune to legal challenges, is available to Spectrum Research Service subscribers.