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Daily Telegraph 17th Oct 2009

The Government's plans for universal access to broadband took a step forward yesterday when Stephen Tiomms, minister for Digital Britain, recommended proposals to encourage mobile-phone operators to provide fast internet access in rural areas.

Mr Timms said mobile operators will get indefinite access to 3G licenses in return for a commitment to roll out mobile broadband to up to 90% of the country. Britain's five mobile operators paid a combined £22.5bn for access to the 3G network in 2000, but it only covers 80% of the country.

In order to extend coverage to 90% of the country Vodaphone and O2 will have to give up some of their spectrum, which is best suited to rural areas, so that it can be reallocated in an auction between all five operators. Mr Timms said he hoped an aution will take place in the second half of 2010, but the proposals require the backing of both houses of parliament.

As part of the recommendations - proposed by Kip Meek, the Government appointed spectrum broker - caps will be placed on the amount of spectrum each operator can own in order to ensure greatest competition.

Improving mobile broadband is central to fulfilling the Government's Digital Britain White Paper to ensure that everyone has access to broadband by 2012.

"Digital Britain is the Government's vision for creating a world-class digital infrastructure boosting jobs, growth and competitiveness," Mr Timms said. "This package will free up the airwaves for the expansion of wireless and 3G services, increasing their reach to consumers and businesses across as much as 90% of the country, including rural communities."

Mr Timms said Orange and T-Mobile, which are merging, might be forced to give up some of their spectrum.

See also Mandelson.