Legal challenge to OFCOM’s 5G network auction

5G promises to usher in a new era of interconnected applications but a potential legal challenge could result in a delay of up to 18 months in the allocation of the additional spectrum the technology requires.

5G’s greater bandwidth will allow huge networks of devices to be connected without human involvement, key to the long-awaited “Internet-of-things,” and its improved reliability and reduced latency compared to current technologies, will enable the real-time communication and control vital for fleets of autonomous vehicles to operate safely.

Already though, the UK’s 5G roll-out has not had an easy ride. Earlier this year, the UK government was forced to re-assure Parliament that allowing the Chinese firm Huawei to supply network infrastructure hardware would not threaten the UK’s special intelligence-sharing relationship with the United States. More recently, social media conspiracy theories alleging links between the technology and the COVID-19 outbreak have led to a series of arson attacks on 5G masts. Supply chain disruption and deployment restrictions arising from the pandemic are likely to have much more significant impacts on the timescales for 5G roll-outs in all markets.

According to this report from the FT, O2 has written to OFCOM, the UK telecoms regulator, to notify its intention to request judicial review of OFCOM’s decision not to change the rules set for an upcoming auction of radio frequency spectrum bands. The challenge is reported to be based on OFCOM’s approach to defragmentation of the spectrum. 

Piecemeal allocations of spectrum bands mean that most operators’ holdings are split between various parts of the spectrum. This has always been a challenge for operators and can require investment in additional equipment (such as extra antennas on masts). OFCOM’s current proposal recognises that contiguous holdings can benefit operators, but does not see defragmentation of the spectrum as its responsibility. Under the rules for the auction proposed by OFCOM, operators will initially submit bids for unspecified parts of the spectrum and will then bid in a second “assignment stage” for precise frequency bands. Between the two stages, bidders have the chance to agree the assignment of specific frequencies between themselves.

If O2 pursues its claim for judicial review, it will need to show that OFCOM’s decision to leave defragmentation of the spectrum to operators in this way was illegal, irrational or procedurally unfair. This is a high bar to meet in any event and OFCOM has form in judicial review proceedings, having beaten a similar challenge brought by Three and EE in 2017. Even if a court agrees with O2, it is highly unlikely that it would actually order OFCOM to engage in any defragmentation. The usual remedy awarded in a successful claim for judicial review is for the decision to be referred back to the relevant authority, in this case OFCOM, for reconsideration.