TMA slams broadband auction plans

The Telecoms Managers Association (TMA) has slammed the UK government's plans to run a second auction this autumn for broadband and fixed wireless access.

The user group said that a second auction could cause serious and lasting damage to the UK's broadband future. It also expressed concern over "rocketing" prices in the recent spectrum licence auction.

Ecommerce Minister Patricia Hewitt said last week that the government will hold another online auction for broadband fixed wireless access (BFWA) services in September. Three licences will be awarded on a regional basis.

BFWA enables users to have cheaper and faster internet and multimedia access because it uses radio links rather than a telephone line. Hewitt said the awarding of licences by auction ensures that they are taken up by those operators best placed to develop services more efficiently.

In a statement issued today, the TMA said that a second auction "carries the potential to cause serious and lasting damage to any hopes the UK may have of achieving affordable, broadband access to every home in the foreseeable future".

The TMA criticised the view that the government will reap the awards of the inflated spectrum mobile licence bids. "The cost of the new networks, with at least another £3bn on top of the bids, will affect the prices charged to customers," it said.

The group pointed to the US where it said the auction concept has led to secondary reselling and business failures as a direct result of "bidding inflation" and called for the government to rethink its policies.

The TMA also suggested that "the monies taken by the Exchequer via spectrum auctions should be ploughed back into providing an up-to-date high-capacity local loop infrastructure", which BT said will cost £20bn.