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British Regulator Investigated Over Low 4G Auction Revenue 116

Posted by Unknown Lamer
from the we'd-like-a-bit-more dept.
judgecorp writes "Ofcom, the British telecom regulator, raised £2.3 billion in the 4G spectrum auction when the government had hoped for £3.5 billion. Now Ofcom's auction is being investigated by the National Audit Office over whether it provided value for money for the British taxpayer. Ironically, the auction resulted in a low price but spread the bandwidth amongst rival firms, and so provided better value than if the auction had created a partial monopoly or (as happened in the 3G auctions in 2000) gouged as much money as possible from the operators leaving them unable to actually build a network."
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British Regulator Investigated Over Low 4G Auction Revenue

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  • by ranulf (182665) on Tuesday April 16, 2013 @03:34AM (#43459065)

    When 3G was rolled out in the UK, the cost to the customer was prohibitively expensive that uptake was pretty slow, despite the fact that billions had been spent on acquiring the licence for the spectrum, let alone from the infrastructure costs. Gradually, it's come down to a more reasonable price, but it's still prohibitively limited by bandwidth for the majority of people - 250MB per month is often considered generous.

    And so now we come to 4G. I happen to be on a network that was an early adopter of 4G and they've been pushing it agressively since they got the licence. Yet, it's only available in 10 cities (not mine), costs a minimum of £50 per month and the monthly bandwidth allowance can be used up in a matter of minutes if you actually use it.

    Hopefully this time, with lots of companies getting in on the action rather than just a couple, there'll be competition and it'll actually become a viable technology for the customer rather than just being good in theory.

    • by Anonymous Coward

      Bullshit. The price of a product is not determined by the cost. That only happens in perfect markets with many competitors, and only if at least some of those competitors try a low-price strategy, which then drives the market price close to where it's no longer profitable. Managers know this and avoid competing on price whenever they can. In a market with only a handful of competitors, they can and do avoid it. Reducing the costs drives profits up, not prices down.

      • by ranulf (182665)
        That's exactly why I ended by pointing out that this time around there is competition and hopefully this will lead to a lower price to the customer.
        • Re: (Score:2, Insightful)

          by Anonymous Coward

          Five companies is not competition. That's a club.

      • by Chrisq (894406)

        Managers know this and avoid competing on price whenever they can. In a market with only a handful of competitors, they can and do avoid it. Reducing the costs drives profits up, not prices down.

        Surely this would be illegal under the Cartels and the Competition Act 1998 [oft.gov.uk], so they couldn't possibly be avoiding true competition. Could they?

      • I remember reading that once a market has three competitors there is little drop in price when a new competitor enters the market. I guess dueling can be rigged but it's much more difficult to rig a Mexican stand off.
        • by afidel (530433)

          Maybe with perfect competition, in the real world a market with fewer than say 20 players is often non-competitive. Look at the DRAM market for a large cartel/oligopoly.

    • by wvmarle (1070040)

      Reminds me of the UMTS auctions around 1999/2000. Huge amounts of money were spent in various countries - so much that several of the buyers of UMTS licenses almost went bankrupt, just on the license cost. Especially as the high license cost required high fees for subscribers in a time that there was no such thing as a smartphone.

      Auctions got huge results in various countries, but after five, six such auctions in other countries in EU the prices offered fell drastically. Phone companies obviously smartened

    • When 3G was rolled out in the UK, the cost to the customer was prohibitively expensive that uptake was pretty slow,

      So, the same as 4G then...

      At the moment 4G is completely pointless:
      - Its only availble in highly populated built up areas (i.e. where there are already plenty of wifi hotspots)
      - Its pretty expensive (although EE have at least made their pricing slightly saner since their initial launch, which saw them bundling lots of free talktime and SMS but charging through the nose for data - what exactly do they think people will upgrade to 4G for?)
      - There's still not a lot of hardware that supports 4G

      3G had very similar problems (ok, so it wasn't competing with wifi, but it was expensive, not widely supported by hardware and had terrible coverage). 4G will improve, just as 3G did, but for now I don't see the value in paying more for 4G network access.

      Gradually, it's come down to a more reasonable price, but it's still prohibitively limited by bandwidth for the majority of people - 250MB per month is often considered generous.

      Really? You can get some pretty cheap contracts offering gigabytes per month. Personally, I'm on a PAYG plan - I get 150MB "free" (expires after 45 days) every time I add £5 to my account balance, and I can purchase a 2GB bundle (expires after 30 days) for £5, which is taken from that account balance. As it happens, I often don't need more than 150MB over 45 days, so assuming I didn't use the phone for anything else that would be £5 for 75 days worth of data (so £2/month), but worst case its £5/month for over 2GB of data/month, which seems a pretty reasonable deal to me.

      If you want to use 3G as a home internet connection then you probably want more than 2GB, but there are still pretty good options here - a quick look at Three's pricing shows they do a 10GB for £15.

      • by MrMickS (568778)

        You can get an unlimited text/unlimited data pay as you go bundle for £12 on a 3G network.

        Three have said that they won't charge extra for 4G connectivity so existing unlimited data plans will be fine on that network. Sadly they came out worst in the auction so they aren't going to be able to offer the same headline speeds as the other networks.

      • by drinkypoo (153816)

        At the moment 4G is completely pointless:
        - Its only availble in highly populated built up areas (i.e. where there are already plenty of wifi hotspots)

        The two do not do the same thing. I have to find and then connect to a hotspot and maybe do a little song and dance with the web browser before I can use one. Mobile data might not always be at 4G speeds, but at least I can use the 3G speed... perhaps to tell me where to find one of these fancy open hotspots.

    • by Ash-Fox (726320) on Tuesday April 16, 2013 @05:29AM (#43459407)

      250MB per month is often considered generous.

      I have no idea what UK you live in, I'm with Three and have been for numerous years. I pay 25GBP (comparable to broadband costs and that's not even adding line rental costs etc from landline to it!) a month for unlimited Internet with tethering (along with a bunch of other things like 3000 minutes, texts etc). If your memory fails you, Three was that network that has only 3g towers (they rent 2g from other providers). They were the ones that provided free, unlimited options to all users on their network, including Skype, Live Messenger, Yahoo Messenger etc.

      Yet, it's only available in 10 cities (not mine), costs a minimum of £50 per month and the monthly bandwidth allowance can be used up in a matter of minutes if you actually use it.

      Maybe you should switch to Three? They stated they have no intention of charging extra for 4G either. In other words, the existing cheap plan coverage, covers 4G as well.

      • by iank (18674)

        Concur. Three is the best performing network in London, though far from perfect. However I was on Voodoofone before and it was truly woeful for data.

  • Policy (Score:2, Insightful)

    by AmiMoJo (196126) *

    The Tory party sold off publicly owned infrastructure for a fraction of what it is really worth. Is anyone surprised?

    • Re: (Score:2, Insightful)

      by maroberts (15852)

      The Tory party sold off publicly owned infrastructure for a fraction of what it is really worth. Is anyone surprised?

      Um its an auction, companies bid what they think it will take to get the goods and beat competitors. You can't blame the government if the price fetched at a competitive auction is lower than expected. A kneejerk "blame the Tories for everything" reaction is what keeps them in power, because people see how shallow the argument against them is. If you really want someone else in, you have to say how you could have done better.

      Also the high auction price of 3G last time slowed its deployment and arguably th

      • by Anonymous Coward

        If you put something on Ebay, misspell the product name, don't mention important attributes in the title, set the end to the wee hours on a Monday morning and don't add a picture, then you're damn well at fault for the low price you'll get. How an auction is held makes a big difference.

        Anybody who thinks telecommunication companies don't invest because they don't have the money is delusional. They'll reap even higher profits if you lower their costs. The price they ask is determined by what people are willi

    • Re:Policy (Score:5, Insightful)

      by Xest (935314) on Tuesday April 16, 2013 @03:47AM (#43459093)

      It wasn't the Tory party that sold it off, it was Ofcom, but you can guarantee it's the Tory party that instigated this investigation.

      Osborne factored the income from the auction into his budget to mask a shortfall in his budget to try and maintain the facade that he is economically competent and reducing the deficit. The problem is now, as the money that has actually come in is over £1bn lower than expected, his books now will struggle to balance so he's more likely to end up failing to hit his target yet again of deficit reduction.

      There was nothing wrong with the auction, but Osborne is just upset he's going to have egg on his face that his attempt to mask a shortfall in his deficit reduction plan with a one off windfall (rather than do something that will reduce the deficit perpetually) has failed.

      For what it's worth though it's not as if it's just the Tories that do this sort of thing that's bad for our country- Brown for example gave away billions of our EU rebate under some misguided delusion that France would then give up some agricultural subsidies which of course they didn't, and have only sought to increase them. Both Labour and the Tories are equally guilty of throwing money away, so don't try and make it about this part or that, they're all just as incompetent.

      • Re: (Score:3, Interesting)

        by Anonymous Coward

        I was with you until the "rather than do something that will reduce the deficit perpetually" bit.

        Exactly what makes you think that an economy in the grip of a 4 year recession about to hit it's third dip, recovering less well than it did in the 1930s is the right time to continue with GDP shrinking austerity? Has the Conservative "message" been so effectively fed that people aren't even questioning the sanity of the policy? As a lifetime Liberal voter I am utterly disgusted by the parties kow-towing to di

        • Re: (Score:3, Insightful)

          by Xest (935314)

          "Exactly what makes you think that an economy in the grip of a 4 year recession about to hit it's third dip, recovering less well than it did in the 1930s is the right time to continue with GDP shrinking austerity?"

          Why assume austerity is the only method of deficit reduction? investment can increase growth which will in turn increase tax receipts which will in turn reduce the deficit.

          Deficit reduction doesn't have to be just about making cuts.

          • by Pecisk (688001)

            "Why assume austerity is the only method of deficit reduction? investment can increase growth which will in turn increase tax receipts which will in turn reduce the deficit."

            It's only method when you have massive debt on which in current circumstances no one sane in head will lend you with actually payable kickback. It also can do wonders when it's done very fast and in right time. Unfortunately, due of heavy unpopularity of this method, this is usually last fallback and then it have disastrous, but unavoid

            • by Xest (935314)

              "It's only method when you have massive debt on which in current circumstances no one sane in head will lend you with actually payable kickback."

              This isn't a problem for the UK, we can currently borrow as cheaply as we've ever been able to.

              • by Pecisk (688001)

                I know, but still massive debt is not nice thing to carry in future, because things can get ugly pretty quickly.

                Still I can agree that sometimes I wonder about some of UK decisions as getting too much into "doing austerity because we should" territory. But that's usually conservatives cred, so no big surprise here.

                • by tehcyder (746570)
                  "Massive debt" is just a scare phrase used by rightwingers who think that corporate and government economic behaviour is exactly analogous to that of a careful householder who pays their credit card bills on time and never has a mortgage.
                  • by Pecisk (688001)

                    I really don't care how rightwingers spin it. However, money lenders have their opinion about it and it's hard to ignore if you have budget deficit.

                  • by khallow (566160)

                    "Massive debt" is just a scare phrase used by rightwingers who think that corporate and government economic behaviour is exactly analogous to that of a careful householder who pays their credit card bills on time and never has a mortgage.

                    Well, someone has to show first that the analogy is broken. How has high debt worked for Japan or Greece?

                    • by afidel (530433)

                      Greece would be fine if they had their own monetary policy, look at other much more debt laden countries, they have a few years of hard times after the currency is devalued and then they bounce back, Greece is going to have a hard time for over a decade before this is over.

                    • by khallow (566160)

                      Greece would be fine if they had their own monetary policy

                      If by fine, you mean basking in their double digit inflation, sure. If by fine, you mean a long term viable economy, well, I have to disagree on that. And why isn't Japan doing well? They have their own currency after all.

                    • by khallow (566160)

                      Japan might not be the tiger it once was, but it's not like it turned into a 3rd world hellhole.

                      Japan crushed its future. It was on track to overtake the US. Then they somehow dropped the ball. I'd say that the difficult choices they tried to evade in the wake of the 1990-1991 recession and the huge debt they accumulated in the process, hurt them greatly. Even now, they're still accumulating debt faster than they're growing their economy. I don't see it ending well for them, unless they make some major structural reforms.

                • by Xest (935314)

                  "I know, but still massive debt is not nice thing to carry in future, because things can get ugly pretty quickly."

                  That really depends on whether your economy grows with that increased debt.

                  Consider this, you have £10,000 of debt, and are struggling to break even each month. A good friend starts a new business with a genuinely great idea and is looking for £5,000 of investment. If you borrow £5,000 and 2 years down the road his company has been successful such that you can

                  • Consider this, you have ã10,000 of debt, and are struggling to break even each month. A good friend starts a new business with a genuinely great idea and is looking for ã5,000 of investment. If you borrow ã5,000 and 2 years down the road his company has been successful such that you can cash in half your shares in the company for say, ã50,000 then is that ã15,000 of debt really very scary any more?

                    On the other hand, i

                    • by Xest (935314)

                      Absolutely, but sometimes in life there are sure fire bets where the risk is so minimal it's silly not to invest in them and in government this is especially the case.

                      Unless somehow all modern Biology turns out to be wrong, it's pretty clear cut that stem cell research funding is going to yield new treatments that would be worth a fortune in exports for example. Similarly it's pretty clear cut that nano material research is going to yield new products that again would build a good export market.

                      The governme

          • by khallow (566160)

            investment can increase growth which will in turn increase tax receipts which will in turn reduce the deficit.

            Government spending isn't automagically investment. If you're spending and not increasing growth, then you've just made the problem worse.

            • by Xest (935314)

              Sure but the counter to that is that austerity isn't automatically deficit reduction - some of the cuts our government has made has resulted in a decrease in economic output which has led to a net increase in debt relative to GDP.

              I wasn't so much suggesting whether or not our politicians are non-retarded enough to implement sane policy, simply that trying to hit debt targets by factoring in convenient one-off windfalls isn't exactly a smart long term plan and is a method you'd use for no other reason than a

              • by khallow (566160)

                some of the cuts our government has made has resulted in a decrease in economic output which has led to a net increase in debt relative to GDP.

                Can you give an example of this? I happen to be of the opinion that this doesn't happen.

      • by pr0nbot (313417)

        "It wasn't the Tory party that sold it off, it was Ofcom, but you can guarantee it's the Tory party that instigated this investigation."

        According to the BBC, "The NAO's move was prompted by a complaint by Labour MP Helen Goodman." I don't think the Tories care particularly how much money was raised; ideologically, they don't want the government to have money. You could argue that cheap 4G licences will translate to higher profits and so more tax revenue... if any of these companies paid their taxes, that is

        • by Xest (935314)

          Interesting that it was a Labour MP that raised it, but the Tories most certainly do care - as I mentioned, the only way Osborne was able to claim he'd hit his borrowing targets was by factoring in £3.5bn from this auction, the fact that wasn't achieved means Osborne likely wont hit his borrowing targets and it'll give his opponents, and opponents of the Conservatives in general plenty of ammunition against him.

          It was a cheap trick that lent him a lot of criticism at the time, that combined with

    • Re:Policy (Score:5, Interesting)

      by Savage-Rabbit (308260) on Tuesday April 16, 2013 @04:04AM (#43459135)

      The Tory party sold off publicly owned infrastructure for a fraction of what it is really worth. Is anyone surprised?

      Well at least this time Ofcom created an environment condusive to competition by not gouging out as much money as possible. The irony is that the Tories are now investigating Ofcom for not extorting as much money as possible and thus creating a reasonably level playing field for competition. This is very funny because Thatcherist/Tories tend to never shut up about how competition is good for the citizenry since it lowers costs. That being said I'm generally against selling off publically owned infrastructure since I have rarely seen it work out well and it tends to end with some form of cartel that effectively has a license to tax the public. In this case selling the spectrum was the thing to do, unless you want the govt. to' do what? Rent it out?

      • by xelah (176252)

        AIUI, the NAO is a parliamentary body, not a government one, and reports to a commons select committee, not the government. In any case, the opposition have been keen to use anything they can get (including this) to convince people that the government's budget strategy doesn't work that it'd be far more likely to be pushed and publicized by them than by the coalition.

        In this case selling the spectrum was the thing to do, unless you want the govt. to' do what? Rent it out?

        It's not guaranteed to them forever. A quick search suggests an initial term of 20 years.

        • AIUI, the NAO is a parliamentary body, not a government one, and reports to a commons select committee, not the government. In any case, the opposition have been keen to use anything they can get (including this) to convince people that the government's budget strategy doesn't work that it'd be far more likely to be pushed and publicized by them than by the coalition.

          Well whoever controls NAO (I kind of assumed that would be the ruling political parties), isn't doing anybody any favors unless the prices were ridiculously low. If you try to extort the maximal amount of money out of anybody who wants to buy spectrum all you do is ensure that the entire spectrum ends up in the hands of a few big players whose CEOs then get together 'at the club' and fix prices in the best traditions of the 'old boy network'.

      • Re:Policy (Score:5, Insightful)

        by FireFury03 (653718) <slashdot@nex[ ]k.org ['usu' in gap]> on Tuesday April 16, 2013 @05:31AM (#43459411) Homepage

        That being said I'm generally against selling off publically owned infrastructure since I have rarely seen it work out well and it tends to end with some form of cartel that effectively has a license to tax the public. In this case selling the spectrum was the thing to do, unless you want the govt. to' do what? Rent it out?

        I think whether selling off infrastructure is a good idea depends on whether it can sensibly turn into a competing market.

        A good example is the rail network - there is only one rail network, which means that you can't have competition (if I want to make a long distance journey between two cities, I don't get to choose between lots of competing operators - there is one company that operates that route and I'm stuck with them, which means no competition and that's bad for the customer). This has resulted in a very bad situation for the public - the British rail network is an unmitegated disaster these days.

        Although, that said, despite the phone network being a similar situation, that seems to have worked out surprisingly well (despite the fact that we're mostly stuck with using BT for the local-loop, and they are utterly utterly incompetent).

        • We're in the same boat in NL: privatisation of railways hasn't worked since there is no real competition, but in case of telcos the improvement has been great... and no surprise either. Early on, the former state telco was forced to share the local loop with other phone companies and ISPs at a fixed fee, and the telecoms watchdog kept a close eye on them. As a result, there was real competition on a more or less level playing field, which quickly brought down prices and increased service levels. Competit
          • We're in the same boat in NL: privatisation of railways hasn't worked since there is no real competition

            I don't quite understand the problems with the rail network in the UK, despite the lack of competition with other train operators. I often travel late on Sunday evenings - if I book a couple of weeks in advance then the train works out cheaper than driving (although it takes considerably longer and is less convenient since I need to actually get to the station and have to stick to a schedule); conversely if I book the same train closer to the time of travel, it costs several times the cost of driving. Thi

            • Amusingly if you are booking in advance it's occasionally cheaper to travel first class than standard class on trains. This is due to the way each type of advance ticket is sold in limited numbers and (at least for manchester to london) the cheapest first class advance tickets are slightly cheaper than standard class off-peak tickets (I bought one of these once). There are also relatively cheap weekend upgrades available on some routes (I haven't actually ever bought one of these though i've been tempted a

              • Overall if you either get a good advance deal or are rich enough that the cost is neligable to you it's hard to beat first class train travel as a comfortable way of getting to/from london.

                OTOH I don't know why anyone would buy a first class ticket from manchester to leeds because the "first class" on those trains is not deserving of the name

                Getting to/from London is possibly one of the more useful things you can use a train for, owing to how bad it is to drive in London (that said, there have been a couple of times when I saw the train price and said "sod that" and either drove and parked to the centre of london or drove to the outskirts and took the tube the rest of the way).

                My typical train journey (second class, not to london) involves:
                1. Get from the house to the station in the city centre: parking at the station is a non-option because of

            • by tehcyder (746570)

              Who on earth is going to pay such a high price to travel on a train when they could drive in half the time? I wouldn't be surprised if you could get a taxi for that price. I can't imagine they get *any* passengers in the first class carriage.

              Well, they must get some... Anyway, I think you're forgetting about business travellers. They can (quite convincingly) argue that the cost is worth it for a long trip, because they can actually work during the journey, unlike in a car or even a plane. On a train you can phone, use the internet, effectively hold business meetings with colleagues, and so on.

              I personally would only take the train somewhere if I was being paid expenses, as you say for personal use (if you don't book weeks in advance) it is

              • Well, they must get some... Anyway, I think you're forgetting about business travellers.

                I'm talking a 5.5 hour train journey on a Sunday night that arrives at the destination at 1:30am on Monday morning... I really can't imagine they get any business travellers, let alone business travellers who are expecting to get any work done...

                They can (quite convincingly) argue that the cost is worth it for a long trip, because they can actually work during the journey, unlike in a car or even a plane.

                For some routes, potentially. However, I would question the productivity of someone on the train - are you really going to find a 5.5 hour train journey more productive than a 3 hour car journey and 2.5 hours of proper work? Especially when some of the train journ

          • by tehcyder (746570)

            Competition seems to be working in the energy sector as well: the infrastructure is separated from the suppliers so you can buy electricity from whomever you want. (The surprise there is that people complain about having a free market, and can't seem to be bothered to select the best offer: they would prefer to pay a set price even if that price is higher than what they'd pay on the free market).

            In the UK, ALL the power companies are corrupt, inefficient, guilty of mis-selling, hiding information from customers, obstructing rivals and obfuscating their pricing structures as far as humanly possible.

            And no, I really, really do not have any interest in shopping in the glorious non-free marketplace that has been created. I want them to supply electricity and gas and for me to pay them sufficient to keep up on maintaining the infrastructure. Which I'd happily do for a nationalised company.

        • by dkf (304284)

          if I want to make a long distance journey between two cities, I don't get to choose between lots of competing operators - there is one company that operates that route and I'm stuck with them, which means no competition and that's bad for the customer

          That depends on the cities in question, and whether you are really keen on optimizing for costs or whether you care about how long it takes as well. It's usually (always?) the case that if you want the fastest vaguely sane option, you pay more.

          • That depends on the cities in question, and whether you are really keen on optimizing for costs or whether you care about how long it takes as well.

            For most long distance journies, your choice is:
            1. Take the intercity, which gives you a choice of exactly one operator.
            2. Take a long series of interconnecting very slow local trains, where each leg of the journey gives you a choice of exactly one operator.
            3. Take a bunch of intercity trains that go via a very circuitous route, where each leg gives you a choice of exactly one operator.

            (2) and (3) would usually be more expensive, take an unfeasibly long time and open you up to being completely screwed if on

        • by tehcyder (746570)

          Although, that said, despite the phone network being a similar situation, that seems to have worked out surprisingly well (despite the fact that we're mostly stuck with using BT for the local-loop, and they are utterly utterly incompetent).

          I'm no great fan of BT, but I shudder to think what it would be like if a load of different private companies tried to do it instead. At least now BT have to get a supply to your door. I personally couldn't give a toss about competition between phone companies, I'd be quite happy if one nationalised company was responsbile for the whole lot: any "unprofitable" services like providing decent broadband or 3G coverage to rural areas would just be part of the service, in the same way that you pay the same fo

          • I'm no great fan of BT, but I shudder to think what it would be like if a load of different private companies tried to do it instead.

            Well, the point really is that where you have a single infrastructure, privatisation doesn't seem sensible. Admittedly it seems to have been moderately successful in the case of BT, although we'll never know how well state ownership would've handled the internet age.

            For true competition, you'd have several companies, each running their own network, and when you find one is incompetent, expensive, whatever you could switch to another. Obviously that is relatively infeasible because of the build-out cost of

        • I didn't think the rail was that bad when I visited. Japan seems to be the only place that is doing trains WELL. I have no idea why theirs is working. I've heard that homogenous societies tend to spend more on public good than heterogeneous societies do, so perhaps they're less stingy with their maintenance costs than the rest of us are because they identify more with the other riders. Here in Chicago, it seems like everyone hates the CTA, including the CTA itself, because it's so crappy, so why spend s
    • Re: Policy (Score:4, Interesting)

      by madprof (4723) on Tuesday April 16, 2013 @04:23AM (#43459209)

      The public have never owned any mobile network infrastructure.
      The government are selling licences to use a particular part of the spectrum.

      If you want to go back to the bad old days of waiting weeks for a phone then feel free to do so, but elsewhere, not in the UK. Telecoms is without doubt one of the most successful privatisations. BT was challenged by competition and had to up its game in all areas. We, the consumers, won and moribund management lost out.

      Do you pine for the days of union closed shops and secondary action too?

      • If you want to go back to the bad old days of waiting weeks for a phone then feel free to do so, but elsewhere, not in the UK

        Curious... I waited almost 3 months (in 2007 - late-May to mid-August) for a phone line to be "installed" (meaning: "someone pressing a button on a PC somewhere") - the wiring was in place, yet I had to wait... so no phone line, broadband, etc...

      • by tehcyder (746570)

        If you want to go back to the bad old days of waiting weeks for a phone then feel free to do so

        You cannot compare telecoms in the 1970s with today. It's like saying that back in the Old Labour days, a home computer cost the equivalent of a car, so look at the fantastic efficiencies created by Margaret Thatcher and the Tories.

        Where you have wired/cable/fibre connections, someone needs to pay for getting it to your house, and I'm fucked if I'm paying Richard Branson 25 grand for the privelege. Like the National Grid, it's a common good that should be equally available to everybody, irrespective of l

        • by madprof (4723)

          Where you have wired/cable/fibre connections, someone needs to pay for getting it to your house, and I'm fucked if I'm paying Richard Branson 25 grand for the privilege. Like the National Grid, it's a common good that should be equally available to everybody, irrespective of location or income.

          Why, precisely, should telecoms companies be able to make money out of literal thin air?

          I agree. Amusingly, the government have made money "out of thin air" with selling off mobile spectrum. :)
          And they generate money out of thin air with quantitative easing.

          Frankly, in view of the recent alternatives, with posh twats like Tony Blair and Cunt Cameron growing ever richer through diligently applied selfishness and amorality, yes.

          The personal finances of the PM and any ex-PMs is not as relevant as their actions when in office.

    • by lxs (131946)

      Yeah but now they need the cash for vitally important projects like a state funeral for Dear Leader.

      • by tehcyder (746570)

        Yeah but now they need the cash for vitally important projects like a state funeral for Dear Leader.

        They should have asked Her Heartbroken Supporters to chip in to pay for the fucking thing if they're that bothered about the humourless old cow.

  • by Anonymous Coward

    Saying that a low price provided better value is a completely subjective statement. Spectrum is a scarce resource and if it doesn't fetch a price which reflects that scarcity, then somebody wins and somebody loses. Obvious tax payer benefits of a high price aside, the spectrum could have been used for shared access protocols instead of the exclusive uses that it's going to be put to now. A handful of competitors is still an oligopoly.

    • by Xest (935314)

      "Spectrum is a scarce resource and if it doesn't fetch a price which reflects that scarcity, then somebody wins and somebody loses."

      Scarcity in itself doesn't define the value of something, you could take the most scarce thing on earth, but if no one cares about it and is willing to pay for it it has no monetary value.

      The spectrum was sold at auction and it reached the price that companies were willing to bid against each other too. That's about as fair a value as you can place on the thing as it was determ

  • by Stolpskott (2422670) on Tuesday April 16, 2013 @04:07AM (#43459153)

    Quoting from Ofcom on the suibject...
    "Ofcom said that the aim of the auction was not to generate revenue for the government, but to promote competition that will ensure consumers will benefit from the rollout of 4G services."

    However, I would be willing to bet my mortgage and my left testicle that the mobile carriers will say "this service is x% better than the 3G network, so we need to charge the consumer at least x% more than they paid for 3G services" irrespective of the relative cost of the 3G and 4G services to the provider.
    Ofcom's approach is a nice idea, if the savings from reduced licence cost are passed on to the consumer, but in related news it has been discovered that the problems with the Curiosity rover on Mars are caused by the fact that the water we were hoping to find there is actually Champagne, and the rover is currently detoxing in a Martian Alcoholics Anonymous facility before resuming its place as a productive member of Martian society...

    Reducing the cost to big business in the hope that there is a trickle-down effect will not see all of those savings go in Management bonuses at the mobile companies, but considering that the expected revenue will now have to be made up by the British taxpayer, the net result will be a win for the business and a loss for the man in the street.

    • However, I would be willing to bet my mortgage and my left testicle that the mobile carriers will say "this service is x% better than the 3G network, so we need to charge the consumer at least x% more than they paid for 3G services" irrespective of the relative cost of the 3G and 4G services to the provider.

      Prices reflect what the market will bear, not the underlying cost of the service. The same would be true no matter how much they had paid for the licence. The difference is that with a lower licence cost, there is more competition and that reduces the price that the market will bear. Also, a higher profit margin means more money can be invested into infrastructure, increasing the buildout speed (at the moment, 4G is utterly useless because its only available in heavilly populated areas where you can alre

    • by Sockatume (732728)

      I would be willing to bet my mortgage and my left testicle that the mobile carriers will say "this service is x% better than the 3G network, so we need to charge the consumer at least x% more than they paid for 3G services" irrespective of the relative cost of the 3G and 4G services to the provider.

      At least one carrier has indicated that they will not charge different amounts for 3G and 4G, while EE - the only current 4G carrier - has reduced its 4G surcharge well ahead of any of those competitors coming on

      • by tehcyder (746570)

        It's safe to assume giving the limited uptake of 4G at current prices that the surcharge will have diminished to zero by the time rivals arrive.

        Seeing is believing. Meanwhile, if the spectrum and the infrastructure were all still state-owned we wouldn't need to be speculating, the price would be fixed in an equitable manner already.

    • by Pax681 (1002592)

      Quoting from Ofcom on the suibject... "Ofcom said that the aim of the auction was not to generate revenue for the government, but to promote competition that will ensure consumers will benefit from the rollout of 4G services."

      However, I would be willing to bet my mortgage and my left testicle that the mobile carriers will say "this service is x% better than the 3G network, so we need to charge the consumer at least x% more than they paid for 3G services" irrespective of the relative cost of the 3G and 4G services to the provider.

      well as someone else mentioned before, Three, who are my mobile service provider have absolutely NO PLANS to charge more for 4G and will also keep their unlimited, unfiltered and the ability to tether into their plans and they are cheaper than the rest.
      i reckon your house and left nut now belong to Three :P

      • by crizh (257304)

        Much as I love Three I should like to point out that their service is filtered, they blacklist 'adult' content. You can 'opt-in' to their 'adult' sandbox but that does not remove the block from anything else.

        Also, as I have just learned, only The One Plan allows unlimited tethering. You can buy tethering as an add-on but it has a 2Gb cap.

        Nonetheless they would appear to be the best Carrier on Earth...

        [Still room for improvement though]

        • by Pax681 (1002592)
          at the prices they charge bud, why go for anything else but the one plan?
          never really had much of a prob with adult content tbh. was sent various filthy links by friends and they just worked... at times, much to my dismay.. you know what some links friends can send you!
          as you say always room for improvement but they ARE damned good! i got an S3 with the one plan for 31 a month on a 24 month contract, which is only £6 over the cost of the one plan so an S3 for £120 effectively.. i am happy as
  • And they did a good job of it. Now someone (government, ofcom?) needs to keep the mobile operators in line, meaning they must fulfill their end of the deal to cover 99% of the UK with a good network and signal. It remains to be seen if the billions that the companies didn't spend on the spectrum auction are applied instead to network infrastructure - or corporate waste (executive wages).
  • The difference between 'expected' and actual revenue is what ... 1.2 billion pounds? Politicians in other countries and their industry cronies are probably having a good laugh about now. Have a look at this: http://en.wikipedia.org/wiki/2G_spectrum_scam [wikipedia.org]
  • Bidders are prone to bid wildly high amounts on the expectation they will have a captive audience to gouge, and this is what they have done.
    The sale of spectrum is a de-facto tax that is not called a tax by means of this so called spectrum auction.

    Lets have a sidewalk auction. Bidders would get ownership of lengths of sidewalk, and people would have to pay a fee to walk along and another fee to cross in their car. Some people who could not afford it, would be house bound, and unable to go to work, and all f

    • by nedlohs (1335013)

      Unfortunately reality doesn't match your fantasies. Spectrum is a limited resource - with our current technologies we can only fit a certain amount of "stuff" into a given amount of spectrum. So having it "free" and letting anyone do anything they want with it doesn't work - the transmissions interfere with each other and we end up either with no one getting to use it for anything useful at all, or the people who can afford the biggest transmitters being able to use all of it for whatever they want.

      Rather t

      • by aurizon (122550)

        Yes, spectrum is limited, as is land for walks.
        The concept of leasing roads and sidewalks is not workable, we have grown up with these being a common good, provision and maintenance paid by taxes.

        As for shared spectrum, it is perfectly workable, in fact it is now shared, with handoffs between carriers of assorted traffic being routine. Some carriers are accused of dropping traffic of other carriers. Each cellular base station has its landlines connected and will be a shared resource, with costs allocated by

        • by nedlohs (1335013)

          As always it's a trade off.

          Sure the government could just tax everyone and use that money to build the towers an so on for a cell phone network infrastructure and then either give access to that to whomever wants to provide a cell phone service, or charge for such access and hopefully recover the costs for building and running the infrastructure. Or it could farm that out to a private monopoly. That's basically how the "copper" phone network in say Australia works. That's sort of how roads and foot paths wo

          • by aurizon (122550)

            I was not suggesting that the government build it, with their layers of dogsbodies, private should build it, at their expense, with no cost for spectrum, but with full technical and interoperability conformity. Logically, with a small town that needs 10 towers, with a single multiplexed cell stack capable of the number of channels on each tower, instead of 40-50 towers with excess overlap etc/ In other words, onse system of 10 towers for the system load with the cost shared by the spectrum users

            • by nedlohs (1335013)

              Exactly. So this will be the last iteration of cell phone infrastructure, since no one will ever be able to build anything that isn't completely interoperable ever again.

              And once that small town grows a bit and needs more coverage why would any company spend any money to build it? After all everyone is sharing the infrastructure so there's no competitive advantage since everyone is sharing, it's just an extra cost with likely no increase in revenue. The people will put up with a few dropped calls after all.

              • by aurizon (122550)

                Well, The internet seems to operate well with standards. Cells do offer interoperability at the RF level and providers accommodate others for load sharing at peak times, and fee charging, so the equipment is there, if we can avoid the burden of uncivil serpents...

                • by nedlohs (1335013)

                  Nothing prevents me from sticking an ipv6 only hosts on the internet that is incompatible with existing ipv4 hosts and can't communicate with them (without an intermediate node that understands both). Sure it mightn't be able to reach other ipv6 hosts either if the only route is via ipv4, but it's still possible to add something incompatible in the mix.

                  • by aurizon (122550)

                    As we gradually change from ipv4 to ipv6 pressures will emerge that cause migration to ipv6. As the world as seen by an ipv4 gradually shrinks, the users will clamor for ipv6. Some dead ends might stay with ipv4? As the current low (~1-2%) rate of ipv6 adoption, the ipv4 group do not suffer greatly, but as allocatable blocks dry up, and the cost of ipv6 hardware declines there will come a tipping point which will place inexorable pressure on the ipv4 to switch instead of using translators or tunneling meth

  • raised £2.3 billion in the 4G spectrum auction when the government had hoped for £3.5 billion. Now Ofcom's auction is being investigated by the National Audit Office over whether it provided value for money for the British taxpayers

    So, how much is this investigation going to cost, and for that matter, will it have a return on this investment? Let's spend money to figure out why we didn't make enough money?

    I get it, there needs to be oversight and accountablility, but just wondering how this inve

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