Reding Slaps ‘Wishful-Thinking’ 3G Bidders, Urges Spectrum Reform Support

Europe’s telecoms commissioner Viviane Reding has called on national telco regulators to convince governments of her ambitious spectrum reform plans that would accelerate mobile internet adoption.

“I am still concerned about the apparent lack of ambition for tackling of the digital dividend in many member states,” she told a joint gathering of the European Regulators Group (ERG) and the Radio Spectrum Policy Group (RSPG) in Gothenburg last week (PDF transcript). “We cannot wait until 2015 to make a mobile allocation in the digital dividend spectrum if we do not want to be sidelined in our quest for mobile internet.”

The upcoming auction of former analogue TV spectrum in a variety of countries could unlock airwaves that support faster data networks. Reding praised the US’ ongoing 700 MHz auctions for “showing the way to open up the digital dividend” – but she distanced herself from imitating the American process, and sought to erase the memory of earlier auctions for 3G spectrum, which was snapped up for billions by telcos who have since been slow to make a return and who now balk in horror at the sight of more airwaves being made available.

“In the case of the 3G auctions in 2000 and 2001, the auctions themselves were not the problem. It was the fact that there was no clear perspective given to investors on the future availability of additional spectrum. This may well have encouraged wishful thinking among many investors, who therefore implicitly assumed that the awarded 3G licenses would give them some kind of ‘oligopoly rent’ in the long term. Some bidders may also have felt that they were in a ‘do or die’ situation, needing to acquire a license or ultimately go out of business. All these elements have nothing to do with the intrinsic value of spectrum.

“In Europe, we have a more complex situation (than the US) and we should be more circumspect, especially concerning the risks of indiscriminate use of auctions. We should consider the full mix of distribution methods available in order to maximize the overall societal, cultural and commercial value of this spectrum.”