The UK Court of Appeal has rejected Three's attempt to have a 30% cap placed on the upcoming 4G and 5Gsupported spectrum auction, a move that would have blocked larger providers, including EE, from bidding against smaller rivals.
Ofcom initially planned to hold an auction for the 2.3GHz band, which can be used by mobile providers to improve on existing services, and the 3.4GHz band, set aside for future 5G services, as early as 2016.
However, the process was delayed when Three, which currently holds 15% of the mobile spectrum, argued that BT/EE's 42% market share has made it difficult to compete in the industry and that a stricter cap on the maximum amount a company can hold would help rebalance the market.
Ofcom already has a cap of 255Mhz on the lower 2.3GHz band for 4G services, and 340MHz on the overall amount of mobile spectrum a single operator can hold, both of which equate to a 37% cap. Given what EE already owns, this means the company is unable to bid on the lower band but can bid on the larger 5G spectrum.
Three argued that a 30% cap would be better for competition, a position that Ofcom has been vehemently opposed to as it believes this would stifle innovation in the 5G space.
Following a High Court decision in December that ruled in favour of Ofcom, the case was ultimately sent to the Court of Appeal. The case was due to be heard over the 13 and 14 February, however swift deliberation saw the decision upheld, according to ISPreview.
"We are disappointed by the Court decision but our decision to appeal was the right one," said a Three spokesperson, in an email to IT Pro. "Our appeal is about competition in the UK mobile market and spectrum distribution is the single biggest factor in maintaining a competitive market."
"We still believe that a 37% cap is too high if the policy objective is to have a competitive 4 player market and we would like to see it set at a lower level in the future."
Three added that the legal dispute "has not caused any delay to the delivery of 5G services to UK consumers", although Ofcom maintains that the initial auction was expected to take place almost two years ago.
Ofcom said it welcomed the decision, and added that it plans to "press ahead with releasing these important airwaves".
"This new capacity will allow mobile companies to offer more reliable reception, and to prepare for future 5G services," the spokesperson added.
Ofcom has yet to reveal the new date of the spectrum auction, however, the regulatory framework has already been created and implemented in the months leading up to the appeal.
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Dale Walker is the Managing Editor of ITPro, and its sibling sites CloudPro and ChannelPro. Dale has a keen interest in IT regulations, data protection, and cyber security. He spent a number of years reporting for ITPro from numerous domestic and international events, including IBM, Red Hat, Google, and has been a regular reporter for Microsoft's various yearly showcases, including Ignite.