In our blog Will European MSS get off the ground? we discussed the Ofcom proposals for the setting of the licence fees for the UK 2GHz spectrum required for the complementary ground components of the European Union mobile satellite systems authorised to Inmarsat Ventures and Solaris Mobile by Commission Decision 2009/449/EC. We thought that perhaps the fee Ofcom was proposing of £554,000 per 2 x 1 MHz nationwide, being the Administered Incentive Pricing of the GSM mobile operators’ spectrum, was a little high, given that each of the mobile satellite systems operators requires 2 x 15 MHz bandwidth (15 x £554,000 = £8,310,000 each).
However, without any consultation that we are aware of, one of the last acts of Stephen Timms as Minister for Digital Britain appears to have been to conduct the spectrum bargain sale of the decade. Instead of setting a licence fee of the order of hundreds of thousands of pounnds or more, the outgoing Labour Government passed the Authorisation of Frequency Use for the Provision of Mobile Satellite Services (European Union) Regulations 2010, which, at Regulation 4(5) includes the following amazing provision:
OFCOM shall not charge the selected applicants for the granting of an authorisation.
Yes, you read that right. No charge. According to Regulation 4(2), the authorisations shall be granted for 18 years from 14 May 2009.
So what happened to Administered Incentive Pricing? What did the outgoing administration read into Commission Decision 2009/449/EC or the earlier EU Decision 626/2008/EC that made them think that the UK could not charge for the spectrum authorisations that it and all member states are required to make in connection with the EU authorisaton of mobile satellite systems operators and forego over £16 million in authorisation/spectrum licence fees? What can the 2G and 3G operators do to challenge this give away?