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Award of licences in the frequency bands 542 to 550 MHz and 758 to 766 MHz covering Cardiff and Manchester

information Memorandum

Executive Summary

Introduction

1.1 This Memorandum provides information for those parties considering bidding for a licence (referred to in this Memorandum as a "Licence") under the Wireless Telegraphy Act 2006 (“WT Act”) to establish or use stations for wireless telegraphy or install or use apparatus for wireless telegraphy at the locations set out in Table 1.1 below and in accordance with the technical parameters detailed for each Lot in section 2 of this Memorandum.

1.2 These are the first of a number of planned awards of licences for geographic Lots of interleaved spectrum. Separate Information Memoranda will be issued for future awards.

1.3 We will hold a separate award for each of the Lots. The awards will be held concurrently, and the Award Process in each case will be identical.

Table 1.1 Lots to be awarded

 

Transmission site

Frequency channel (range)

Area

Lot 1

Wenvoe

Channel 30 (542-550 MHz)

Cardiff area

Lot 2

Winter Hill

Channel 57 (758-766 MHz)

Manchester area

Source: Ofcom

1.4 In particular, this Memorandum:

  • describes the characteristics of the spectrum lots for which Licences are to be awarded (Section 2);
  • summarises the principal terms of the Licence that will be issued following the completion of each Award Process (Section 3);
  • summarises the steps that persons need to take to qualify and take part in either of the Award Processes (Section 4); and
  • summarises a number of associated policy issues that may be relevant to the awards (Section 5).

1.5 Table 1.2 below provides an overview of the Lots available, the rights and obligations under the Licences to be issued and the rules for the conduct of the Award Processes.

Table 1.2 Summary table

Spectrum packaging

 

Transmission sites and frequency channels (ranges)

The following lots will be auctioned:

Lot 1

Wenvoe

Channel 30 (542-550 MHz)

Lot 2

Winter Hill

Channel 57 (758-766 MHz)

Coverage

The coverage of each lot will be what is achieved by transmitting within the technical parameters set out for each Licence, broadly as follows:

Lot 1

Cardiff area

Lot 2

Manchester area

Rights and obligations

 

Purpose of use

The Licences will allow any use that respects the technical parameters.

Technical parameters for digital terrestrial television (DTT)

The Licences will include a block edge mask and technical parameters suitable for DTT.

Technical parameters for services other than DTT

If the Licensee wishes to use the Licence for services other than DTT, we will consider varying the technical parameters included in the Licence accordingly.

International coordination

The Licences will prohibit the international coordination threshold from being exceeded.

Licence conditions

The licence conditions include technical conditions to:

  • ensure compliance with international and legal requirements; and
  • ensure effective use of the licensed frequencies by controlling interference between different authorised users.

The licences will also contain conditions specific to television and radio multiplex services.

For avoidance of doubt, the Licences do not guarantee exclusive use of the spectrum. In the future, we may grant additional authorisations to allow the use of all, or part, of the spectrum, which may include frequency channels covering Cardiff or Manchester. We would develop the conditions of use under such additional authorisations in order to manage the risk of harmful interference and would consult on these conditions.

Multiplex ownership

A Licensee falling within, or controlled by a person falling within, one of the categories listed below may not use the Licence to provide a television multiplex service:

(a) a local authority;

(b) a political body;

(c) a religious body;

(d) persons who, in the opinion of Ofcom, are subject to undue influence by a local authority or a political body such as to act against the public interest; and

(e) any body controlled by a person falling within the categories (a) to (c) above.

 

Interoperability with existing multiplexes

If a Licence is used to provide a television multiplex, the Licensee must ensure that any logical channel numbers (LCNs), network and service identification and other labels of transport stream components used do not conflict with those used by other multiplex operators.

Licence term

Each Licence will be of indefinite duration and continue in force until surrendered by the Licensee or revoked by us.

We may revoke the Licences for a number of reasons, including non-payment of fees, breaches of the conditions of the Licence, and spectrum management reasons, with appropriate notice.

During the period from the grant of the Licence to 30 October 2026 (the initial term), we will not revoke the Licence for spectrum management reasons.

Licence fee

The Licence fee for the initial term (the period from the grant of the Licence to 30 October 2026) will be determined by the auction process.

After the initial term, we expect further fees, including fees set using administered incentive pricing (AIP), to be payable.

Spectrum trading

The rights and obligations conferred by the Licence will be tradable.

All types of trade (partial or total, concurrent or outright) will be permitted.

Award mechanism and auction rules

 

Auction format

We will hold a separate single unit ascending bid auction for each Lot.

The auctions for each Lot will be held concurrently.

Basic award process

Each award will take place over four stages:

  • an Application stage;
  • a Qualification stage;
  • an Auction stage, which will comprise one or more Bid rounds until only one valid Bid remains; and
  • a Grant stage, during which we will grant a Licence to the Winning Bidder.

If there is only one Bidder at the end of the Qualification stage there will be no auction stage and the Bidder will pay a licence fee of £10,000.

Bid price in the first round

Bids in the first round must be between £10,000 and £15,000.

Deposit

Each Bidder will be required to submit a deposit of £10,000.

We may require Bidders to increase their deposits to match their Bids during the Auction stage.

The deposit, or part of the deposit, may be forfeited if the Bidder breaches any of the auction rules.

The deposits of unsuccessful Bidders will be returned to them at the end of the auction, unless forfeited.

Pricing rule

We will determine the licence fee payable by each winning Bidder using a ‘second price’ rule.

Where there is only one Valid Bid in the first round the licence fee will be £10,000.

Transparency

There will be an application process for participation in the Award Process, and we will make public the identities of all successful Applicants.

At the end of each round, we will notify Bidders of the number of Bidders that made valid Bids in that round.

Prohibitions on Bidder association and collusion

There will be specific rules to prohibit Bidder association and collusion.

If separate applications are received from two or more associated organisations, they will be required to disassociate, or withdraw all but one of their applications, in order for any of them to qualify to bid in the Auction.

Unsold Licences

If a Licence remains unsold at the end of the auction, we will choose whatever course of action we consider appropriate at the time, in accordance with our statutory duties.

Our duties and functions

We have powers under the WT Act to grant licences for wireless telegraphy, and to do so through an auction. Our duties in relation to the award of Licences are set out in the WT Act, and are derived from the requirements of European Union (EU) legislation.

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