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Ofcom Delays 2.6GHz Auction

6:15 AM -- As expected, Ofcom has delayed its 2.6GHz auction in the U.K. because of the legal challenge mounted by T-Mobile (UK) and Telefónica UK Ltd. (See T-Mobile Challenges Ofcom, Ofcom Lawsuit Looms, and UK Operators Brace for Spectrum Struggle.)

Ofcom announced in April that it planned to accept applications in July and start the auction in September, but those plans are now on hold.

The U.K. regulator said in an emailed statement to Unstrung: "Since then, T-Mobile and O2 have begun legal challenges of our decision to press ahead with the award. In light of this, we have decided that it would be inappropriate to set the application date for July or August 2008."

T-Mobile and O2 do not want the 2.6GHz mobile broadband auction to proceed because Ofcom has not yet finalized its plans for spectrum refarming. They argue that they cannot accurately value the new spectrum when they don’t know exactly how much of their 2G spectrum they’ll be allowed to use for 3G services. Their legal challenge could also be a ploy to delay the entry of new WiMax players into the market. (See UK WiMax Faces Spectrum Fight, Brits Kickstart Broadband Spectrum Offer, Ofcom Denies Spectrum Bundling .)

Meantime, Ofcom launched a consultation last week for an auction of 128 MHz of spectrum in the UHF band –- the so-called digital dividend -- which will be freed up from the switchover to digital TV in the U.K. This is prime mobile broadband spectrum located in the 550MHz–630MHz band and 806MHz–854MHz band. It is similar to the 700MHz spectrum that was auctioned in the U.S. this year for $19.5 billion and that AT&T Inc. (NYSE: T) and Verizon Wireless are planning to use for Long-Term Evolution (LTE). (See AT&T & Verizon to Use 700 MHz for 4G .)

— Michelle Donegan, European Editor, Unstrung

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