Despite seeming to have learnt lessons from the disastrous auctioning off of the bandwidth for 3G phones, it looks as though the latest auction by the Radiocommunications Agency is heading into the same quagmire.
With just three more days to go in the two-week bidding war for the rights to the 3.4GHz frequency band across the UK, the current state of play sees Hong Kong-based Pacific Century Cyberworks owning 13 of the 15 UK licences. Just two other bidders remain from the other 11 that started the auction.
What this means is PCCW - bidding under the name Poundradio Ltd - effectively has a UK-wide network with which to offer broadband to UK citizens. This was clearly PCCW's aim all along after it nearly fell foul of the UK government when it put forward 15 differently named companies at the start of the bidding process. But then money talks in UK bandwidth auctions and it was allowed to bid for all fifteen under the one name.
PCCW's misunderstanding of the new auction's rules has also unfortunately also lost it an area of Britain it had already won the rights to. For some reason, in an earlier round (we're now on round 41), PCCW only made 13 bids. Under the rules this suddenly meant it could only go for 13 licences - the idea presumably being that companies wouldn't be able to let others slug it out and then leap in at the last minute with a higher bid.
And so, when PCCW's dream of a nationwide broadband network becomes a reality, spare a thought for Scotland which has been unceremoniously dumped after PCCW realised it was that or losing the fight for the most valuable and important Greater London licence.
The two licences that are most likely to survive with a company that is not PCCW now that it owns the rest - are still being fought over. Red Spectrum has dumped the Northern licence it won to concentrate on the Greater London licence (currently under Poundradio's name for £2.12m). Meanwhile, Public Hub is still in control for the moment of the Southern licence with a bid of £365,000. PCCW is due to pay £6.47m for the remaining licences.
As for the spectrum itself, running between the wireless frequencies of 2.4GHz for B and G equipment and 5GHz for A equipment, it means PCCW will be able to offer high-speed data access exclusively at that frequency within a distance of, say, 50 metres of a transmitter. It clearly sees a business opportunity and wants the whole of the UK to realise economies of scale. It is therefore unlikely to let the other areas go, especially Central London - although if the price gets too high it may let the others take them over... and then take them over further down the line.
Which is all fine and dandy except that having gone to all the trouble of having a Fixed Wireless Access Consultative Committee to advice on how to run the auction and so avoid the mistakes of the 3G licence, it seems that the auction has, well, failed miserably.
If the Radiocommunications Agency thought it wise that the entire UK-wide spectrum went to one company, it would have not have introduced regional bidding. The fact that not only have all the regions gone to one company, but that that company has had to actually drop a region it won to get another, is not what you imagine the process' designers were seeking to achieve when they sat down and came up with it.
In short, it's another bandwidth auction fiasco. Fortunately this time however, we are only talking tens of millions and not tens of billions as we had with 3G.