Mobile operator Three claims distortion in competition for radio spectrum rights

The spectrum is the radio frequencies used in the mobile industry and other sectors for communication over the airwaves
Mobile operator Three claims distortion in competition for radio spectrum rights

Mobile phone network operator Three has claimed in the High Court there will be serious distortion of competition in the mobile and broadband services sector because of a decision over how certain radio spectrum rights will be assigned.

The spectrum is the radio frequencies used in the mobile industry and other sectors for communication over the airwaves. In Ireland, those frequencies are allocated by the telecoms watchdog Comreg.

Three Ireland (Hutchison) Ltd and Three Ireland Services (Hutchison) Ltd, part of the CK Hutchison Holdings multinational conglomerate, has brought proceedings appealing the December 18 last decision of ComReg to hold a multi-brand spectrum award which will assign rights across four spectrum brands for the next 20 years.

Comreg disputes Three's claims and opposes the appeal which is being heard before Mr Justice Brian O'Moore via the Trialview remote system.

Vodafone, the largest mobile operator, is a notice party in the case.

Comreg

The Comreg decision, which followed a consultation process, provides for issuing new rights, in what are known as the 700 MHz, 2.1 GHz, 2.3 GHz and 2.6 GHz bands which have been sub-divided into blocks. Those blocks are then awarded to providers by way of a “combinatorial clock auction” whereby participants bid on generic lots of spectrum rather than individual lots.

Three claims this would put it at a competitive price disadvantage against competitors of between €20m and €40m

Opening the case on Wednesday, Brian Kennelly SC, for Three, said his client was seeking to set aside certain parts of that decision. It is claimed Comreg had made significant error or errors of fact and/or law and/or assessment.

Counsel said the two key aspects of challenge are in relation to a spectrum competition “cap” in the competition and the use of the combinatorial clock auction system.

The cap was disproportionate and discriminatory towards Three. Concerning the auction, the balancing exercise in relation to the positives and negatives of such a system was flawed in relation to a number of factors, counsel said.

Three also claims ComReg failed to establish a plausible distortion of competition.

There had been a focus on potential harm to the smallest of the main three providers, eir, but Comreg failed to establish the likelihood of this concern arising or the likelihood of that harm ultimately affecting consumers, it claims

ComReg has also allegedly failed to seek evidence, or adequate evidence, to support its finding that the distortion of competition is substantial and likely to arise.

It is also claimed the detrimental impact on Three is significant financially and goes beyond what is necessary to secure any legitimate objective of ComReg.

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