Britain pushes back against EU spectrum auction veto

BRUSSELS:  Britain has objected to new European Commission rules allowing it to block overly costly mobile spectrum auctions in a possible setback for an EU plan to overhaul the telecoms sector.

In a note sent to other EU governments and seen by Reuters, the British government said it believed the sector should be reformed but it did not support new measures proposed by the European Commission such as an EU veto of spectrum auctions that regulators may believe are overpriced or unfair.

EU leaders will meet in Brussels on Oct. 24 to discuss the plan for the first time. Opposition from governments could delay or even prevent the plan from being adopted before European elections next May.

While Britain wants to speed up the rollout of faster fourth generation broadband, it wants the EU to do so “without affecting the competences of member states in this area,” according to the note.

The Commission has come out against costly auctions in the past.

The EU commissioner for telecoms, Neelie Kroes, who is in charge of the reform, criticized recent auctions in the Netherlands, which took in 3.8 billion euros (U.S. $5.15 billion), for being too expensive.

“Was nothing learned from previous auctions … when the share price of KPN dropped substantially?” she said in her blog.

Over a decade ago, third generation spectrum auctions earned countries tens of billions of dollars in revenue.

While 4G spectrum is being offered at a fraction of the cost of 3G, cash-strapped governments such as Britain do not want Brussels to have the power to stop that money flowing.

In spectrum auctions this year, Britain made around 2.3 billion pounds compared to 22.5 billion pounds (U.S. $36.27 billion) in the 2000 3G auction which left industry heavily indebted.

Typically, national regulators set a minimum price for each spectrum sale and then companies enter a bidding process. The EU’s group of regulators BEREC has also voiced concerns over the plans that could undermine these powers.

Spectrum auctions are not Britain’s only concern. In the note, Britain also warned against further moves to end roaming – charges levied by operators on customers travelling abroad – before existing regulation to lower the charges has taken full effect.

“Progress towards abolishing roaming charges should take place within the existing regulatory framework,” the note says.

Kroes unveiled the telecoms overhaul just weeks ago. For her entire plan to become law, she will need the backing of all 28 EU governments and the European Parliament.

Beyond steps to end roaming and veto costly spectrum auctions it would also allow broadband providers to charge more for carrying data-heavy services at high speeds. Similarly, ahead of the October meeting, France has asked countries to consider a new tax regime for digital companies.

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