LONDON–Britain might relax rules about the speed at which mobile phone operators have to build out third-generation (3G) networks as part of a radical overhaul meant to throw open the highly-regulated market for radio frequencies.
Regulator Ofcom said on Tuesday it would address industry concerns about onerous 3G network regulations in a consultation document planned for mid-December as part of its revamp of 100-year-old regulations governing the country’s radio frequency spectrum.

„It’s one of a number of issues we’re discussing with stakeholders on a confidential basis at the moment,” a spokesman for the Ofcom communications watchdog said. „All of these will be aired in the document in mid-December.”

Mobile phone operators such as mmO2 Plc, which has almost 14 million customers in Britain, have urged Ofcom to be more flexible about rules that demand that high-speed 3G networks cover 80 percent of the population by the end of 2007.

Vodafone Group Plc, Orange, T-Mobile, mmO2 and Hong Kong group Hutchison Whampoa’s 3 spent a total of 22.5 billion pounds ($42 billion) on 3G network licenses in 2000. But software glitches and handset delays have prevented all but Vodafone and 3 from selling 3G phones in the U.K. to date.

Any move by Ofcom to scrap initial targets for network rollouts comes as the regulator is suggesting easing other regulatory curbs on how spectrum is bought, sold and used to encourage innovation and competition.

Ofcom in August called a consultation on allowing companies to buy and sell spectrum and in September called a second consultation on removing „unnecessary” restrictions on licensees to allow them to change how they use their spectrum–without regulatory interference.

In its Strategic Review of Spectrum Management, which partly encompasses these two issues, Ofcom said on Tuesday it wanted to hand control of 71.5 percent of the radio spectrum to the market by 2010. The industry has to respond by Feb. 15, 2005.

„This is a huge move away from command and control to market forces mechanisms,” a spokesman said, adding that the industry needed to „sit up and take notice” so that it could benefit from the newly liberalized market.

Ofcom hopes to secure some spectrum trading and market liberalization for the likes of business radio and fixed wireless license holders by the end of the year.

The fine print
Not all spectrum control will be handed over. Suggested exemptions are spectrum controlled internationally, such as for satellite communications, and spectrum where international roaming is essential, such as for the maritime or aeronautical industries. This will account for 21.6 percent of the market.

But the plan is to allow the market to decide the best use for new spectrum allocations, give license holders the confidence to plan for the future and increase the amount of license-exempt spectrum, allowing businesses to develop new technologies and services without the need for a license.

About 7 percent of the market is expected to be license excepted by 2010. Currently, mobile phone operators offering local Wi-Fi high-speed wireless Internet connections in places such as coffee shops and airport lounges need no license in the U.K.