The Wireless Telegraphy (Licence Award) Regulations 2012

• (c) any member of that applicant’s or bidder’s bidder group acting in a way which is likely to distort the outcome of the award process;

• (d) any member of that applicant’s or bidder’s bidder group, or any person to whom confidential information has been disclosed, disclosing, or attempting to disclose, or inciting another person to disclose, any confidential information, whether directly or indirectly, to any person, except where the disclosure is—

• (i) to OFCOM;

• (ii) to a member of that applicant’s or bidder’s bidder group;

• (iii) to a provider of finance for the purpose of raising finance for a bid; or

• (iv) to a person for the purpose of enabling that person to decide whether to participate as a member of the applicant’s or bidder’s bidder group;

• (e) any member of that applicant’s or bidder’s bidder group obtaining or attempting to obtain confidential information relating to another applicant or bidder;

• (f) any member of that applicant’s or bidder’s bidder group receiving or attempting to receive services in relation to the award process from any person who has provided or is providing services to OFCOM in relation to the award process;

• (g) any person who is a member or a director or employee of a member of that applicant’s or bidder’s bidder group and also a director or employee of a member of another bidder group is—

• (i) taking part in the preparation of both bidder groups for participation in the award process; or

• (ii) receiving confidential information relating to both bidder groups;

• (h) a member of that applicant’s or bidder’s bidder group is or becomes a member of another applicant’s or bidder’s bidder group; and

• (i) a change occurring in the membership of that applicant’s or bidder’s bidder group from that notified to OFCOM in its application except as a result of—

• (i) a person ceasing to be a member of that bidder group;

• (ii) a person joining that bidder group under the procedure in regulation 7(3); or

• (iii) a person becoming an associate through merger or acquisition activity provided that such activity is not for a purpose related to the award process.

• (3) The events in relation to a bidder (but not an applicant) are—

• (a) a change, after OFCOM has recorded that bidder’s spectrum holdings under regulation 16, to the existing spectrum holdings of a bidder or, in relation to the bidder, any person referred to in regulation 4(3)(a)(iii) except insofar as the change is a divestment of a part of or the whole of the existing spectrum holdings; and

• (b) any person which has existing spectrum holdings which was not at the time OFCOM recorded the bidder’s spectrum holdings under regulation 16 a person referred to in regulation 4(3)(a)(iii) becoming such a person during the award process.

PART 6 — MISCELLANEOUS

General power of exclusion

115

OFCOM may, at any time, notify any applicant or bidder of its exclusion from the award process, if required to do so by any direction given by the Secretary of State to OFCOM under section 5 of the Communications Act 2003[^f00006] or if, after OFCOM’s determination under regulation 9(1) (and notwithstanding that determination), in their opinion the applicant or bidder is not a fit and proper person to hold a licence.

Notification to OFCOM

116

If, in accordance with any provision of these Regulations, an applicant or bidder is required, or wishes, to notify OFCOM of any fact or circumstance, it must do so by notice in writing which is marked for the attention of the OFCOM personnel who are specified by OFCOM for that purpose on OFCOM’s internet website and must deliver that notice to OFCOM—

• (a) by electronic mail to an electronic mail address dedicated to the award process which is published by OFCOM on their internet website;

• (b) by personal delivery to Riverside House, 2a Southwark Bridge Road, London, SE1 9HA; or

• (c) by fax to a number dedicated to the award process which is published by OFCOM on their internet website.

Changes to timing or location

117

• (1) Subject to regulations 118 and 119, paragraph (2) applies where OFCOM determine that it is impracticable for any reason—

• (a) for any document which is to be delivered to OFCOM under these Regulations to be delivered at the place specified or by the deadline specified under these Regulations; or

• (b) for any action which is required to be undertaken in accordance with these Regulations to be completed by the deadline specified.

• (2) Where this paragraph applies, OFCOM shall take reasonable steps to notify applicants or bidders that—

• (a) delivery must be made on a different day or within different times on that day or at a different place;

• (b) the action must be completed on a different day or by a different deadline.

Changes to round times and use of electronic auction system

118

• (1) Where a time for the start of a round has been notified to bidders and OFCOM determine that it is impracticable for any reason to start the round at that time, OFCOM shall take reasonable steps to notify bidders of a revised time for the start of the round.

• (2) Where a time for the end of a round has been notified to bidders and OFCOM determine that it is impracticable for any reason for the round to end at that time, OFCOM shall take reasonable steps to notify bidders of a revised time for the end of the round.

• (3) Where OFCOM determine that it is impracticable for any reason to use the electronic auction system for any of the purposes specified in Part 4 of these Regulations, OFCOM shall take reasonable steps to notify bidders of an alternative method of participating in the award process and any requirements relating to the authentication of communications made by means of the alternative method.

• (4) Bidders must use the alternative method of participating in the award process in accordance with a notification under paragraph (3).

Rerunning rounds

119

• (1) Paragraph (2) applies where a round is in progress and OFCOM determine that it is not possible to continue the round because of technical failure (or an event or circumstance with similar effect on the continuation of the round).

• (2) Where this paragraph applies, OFCOM shall—

• (a) take reasonable steps to notify bidders of its determination under paragraph (1);

• (b) disregard the bids made in that round; and

• (c) resume the award process from the end of the previous round (or, if there was no previous round, from the start of the opt-in round).

• (3) Paragraph (4) applies where OFCOM determine that it is not possible to continue the award process in accordance with the provisions of Part 4 of these Regulations because of technical failure (or an event or circumstance with similar effect on the continuation of the award process).

• (4) Where this paragraph applies, OFCOM shall—

• (a) determine the rounds for which bids made in those rounds should be disregarded in order to have a fair and efficient outcome to the award process;

• (b) take reasonable steps to notify bidders of its determinations under paragraph (3) and sub-paragraph (a); and

• (c) resume the award process from the end of the latest round for which bids are not disregarded under sub-paragraph (a), or, where all bids are to be disregarded under that sub-paragraph, to rerun the award process from the start of the opt-in round.

Refunds

120

OFCOM may, in such cases as they think fit, refund, in whole or in part, sums which have been paid to them in accordance with any provision of these Regulations.

Deposits

121

In determining under these Regulations the amount that an applicant or bidder has on deposit OFCOM shall disregard any sum forfeited under these Regulations and any interest which may have accrued on any deposit.

SCHEDULE 1 — FREQUENCY LOTS

In these Regulations—

• (a) “800 MHz paired frequency lot” means any one of the four numbered 800 MHz paired frequency lots listed in Column (1) of Table 1 comprising the frequencies listed in the corresponding entry in Column (2) of the same table;

• (b) “2.6 GHz paired frequency lot” means any one of the fourteen numbered 2.6 GHz paired frequency lots listed in Column (1) of Table 2 comprising the frequencies listed in the corresponding entry in Column (2) of the same table;

• (c) “2.6 GHz individual frequency lot” means any one of the nine numbered 2.6 GHz individual frequency lots listed in Column (1) of Table 3 comprising the frequencies listed in the corresponding entry in Column (2) of the same table;

• (d) “800 MHz coverage obligation lot” means the frequencies 811-821 MHz and 852-862 MHz;

• (e) “2.6 GHz concurrent low power 10 MHz lot” means the frequencies corresponding to any two sequentially numbered 2.6 GHz paired frequency lots, available in this award process for low power use by up to ten licensees concurrently;

• (f) “2.6 GHz concurrent low power 20 MHz lot” means the frequencies corresponding to any four sequentially numbered 2.6 GHz paired frequency lots, available in this award process for low power use by up to ten licensees concurrently;

• (g) “lot” means any lot which falls within one of the different types of lots in paragraphs (a) to (f);

• (h) a reference to “type of lot” shall be construed as a reference to any one of the different types of lot in paragraphs (a) to (f);

• (i) a reference to a numbered 800 MHz paired frequency lot, a numbered 2.6 GHz paired frequency lot or a numbered 2.6 GHz individual frequency lot means the lot with that number in Column 1 of Table 1, Table 2 or Table 3 (as the case may be); and

• (j) a reference to a “block” of numbered 800 MHz paired frequency lots, numbered 2.6 GHz paired frequency lots or numbered 2.6 GHz individual frequency lots is to be construed as a reference to a block of sequentially numbered lots.

Column (1) 800 MHz paired frequency lots	Column (2) Frequencies (MHz)
800 MHz paired frequency lot 1	791-796 and 832-837
800 MHz paired frequency lot 2	796-801 and 837-842
800 MHz paired frequency lot 3	801-806 and 842-847
800 MHz paired frequency lot 4	806-811 and 847-852
Column (1) 2.6 GHz paired frequency lots	Column (2) Frequencies (MHz)
---	---
2.6 GHz paired frequency lot 1	2500-2505 and 2620-2625
2.6 GHz paired frequency lot 2	2505-2510 and 2625-2630
2.6 GHz paired frequency lot 3	2510-2515 and 2630-2635
2.6 GHz paired frequency lot 4	2515-2520 and 2635-2640
2.6 GHz paired frequency lot 5	2520-2525 and 2640-2645
2.6 GHz paired frequency lot 6	2525-2530 and 2645-2650
2.6 GHz paired frequency lot 7	2530-2535 and 2650-2655
2.6 GHz paired frequency lot 8	2535-2540 and 2655-2660
2.6 GHz paired frequency lot 9	2540-2545 and 2660-2665
2.6 GHz paired frequency lot 10	2545-2550 and 2665-2670
2.6 GHz paired frequency lot 11	2550-2555 and 2570-2675
2.6 GHz paired frequency lot 12	2555-2560 and 2675-2680
2.6 GHz paired frequency lot 13	2560-2565 and 2680-2685
2.6 GHz paired frequency lot 14	2565-2570 and 2685-2690
Column (1) 2.6 GHz individual frequency lots	Column (2) Frequencies (MHz)
---	---
2.6 GHz individual frequency lot 1	2570-2575
2.6 GHz individual frequency lot 2	2575-2580
2.6 GHz individual frequency lot 3	2580-2585
2.6 GHz individual frequency lot 4	2585-2590
2.6 GHz individual frequency lot 5	2590-2595
2.6 GHz individual frequency lot 6	2595-2600
2.6 GHz individual frequency lot 7	2600-2605
2.6 GHz individual frequency lot 8	2605-2610
2.6 GHz individual frequency lot 9	2610-2620

SCHEDULE 2 — OPT-IN SELECTIONS AND PRICES

Lots	Opt-in price for first opt-in selection
Three 800 MHz paired frequency lots	Six hundred and seventy five million pounds (£675,000,000)
Lots	Opt-in price for second opt-in selection
---	---
Two 800 MHz paired frequency lots; and Two 2.6 GHz paired frequency lots	Four hundred and eighty million pounds (£480,000,000)
Lots	Opt-in price for first opt-in selection
---	---
Three 800 MHz paired frequency lots	Six hundred and seventy five million pounds (£675,000,000)
Lots	Opt-in price for second opt-in selection
---	---
Two 800 MHz paired frequency lots; and Two 2.6 GHz paired frequency lots	Four hundred and eighty million pounds (£480,000,000)
Lots	Opt-in price for third opt-in selection
---	---
One 800 MHz paired frequency lot; and The 800 MHz coverage obligation lot	Four hundred and seventy five million pounds (£475,000,000)
Lots	Opt-in price for fourth opt-in selection
---	---
The 800 MHz coverage obligation lot; and Two 2.6 GHz paired frequency lots	Two hundred and eighty million pounds (£280,000,000)
Lots	Opt-in price for first opt-in selection
---	---
One 800 MHz paired frequency lot	Two hundred and twenty five million pounds (£225,000,000)
Lots	Opt-in price for second opt-in selection
---	---
Four 2.6 GHz paired frequency lots	Sixty million pounds (£60,000,000)
Lots	Opt-in price for first opt-in selection
---	---
One 800 MHz paired frequency lot	Two hundred and twenty five million pounds (£225,000,000)
Lots	Opt-in price for second opt-in selection
---	---
Four 2.6 GHz paired frequency lots	Sixty million pounds (£60,000,000)
Lots	Opt-in price for third opt-in selection
---	---
The 800 MHz coverage obligation lot	Two hundred and fifty million pounds (£250,000,000)

SCHEDULE 3 — FREQUENCY BANDS FOR EXISTING SPECTRUM HOLDINGS AND SPECTRUM CAP RULE

Frequency bands
791 to 821 MHz 832 to 862 MHz 880.1 to 914.9 MHz 925.1 to 959.9 MHz 1710.1 to 1781.7 MHz 1805.1 to 1876.7 MHz 1920.0 to 1979.7 MHz 2110.3 to 2169.7 MHz
2500 to 2570 MHz 2570 to 2615 MHz 2620 to 2690 MHz

Frequency bands
791 to 821 MHz 832 to 862 MHz
880.1 to 914.9 MHz 925.1 to 959.9 MHz

SCHEDULE 4 — APPLICATION FORM AND WARRANTY

Details of the applicant

1

Provide the following details for the applicant—

• Applicant’s full name

• Registered number of company

• Registered office of company

• Bank sort code and account number

• Name of individual contact within applicant

• Contact address (if different from registered office)

• Contact telephone number

• Contact mobile telephone number

• Contact fax number

• Contact electronic mail address

Authorised persons

2

Provide details of the name and position in the applicant of at least three and no more than five persons, each of whom has authority to bind the applicant for all purposes relating to the award process. Also provide a specimen signature of each of these persons.

Directors or members of managing body

3

Provide the name and job title of each of the directors of the applicant or each of the members of the managing body of the applicant.

Applicant group

4

Provide the names of all other members of the applicant group (as defined in the Regulations) in respect of which the applicant has completed a document in the form set out in Schedule 5 to the Regulations in accordance with regulation 4(3)(a)(ii) of the Regulations.

Qualification to bid

5

In relation to the determination by the Office of Communications (“OFCOM”) under regulation 9 of the Regulations—

• (a) provide details of any reason why the applicant may not be a fit and proper person to hold a licence;

• (b) state whether any member of the applicant’s applicant group has colluded, or attempted to collude, or is colluding or attempting to collude, with another person to distort the outcome of the award process and provide a description of any such collusion;

• (c) state whether any member of the applicant’s applicant group has acted or is acting in a way which is likely to distort the outcome of the award process and provide a description of any such actions;

• (d) state whether any member of the applicant’s applicant group, or any person to whom confidential information has been disclosed, has disclosed confidential information, whether directly or indirectly, to any person, and provide a description of the circumstances of any disclosure and the information disclosed, except where the disclosure—

• (i) was to a member of the applicant’s applicant group; or

• (ii) was to OFCOM;

• (e) state whether any member of the applicant’s applicant group has obtained or is obtaining or attempting to obtain confidential information relating to another applicant and provide a description of any such circumstances;

• (f) state whether any member of the applicant’s applicant group is receiving or is attempting to receive services in relation to the award process from any person who has provided or is providing services to OFCOM in relation to the award process and provide a description of the services concerned; and

• (g) state whether (and provide a description of any circumstances in which) any person who is a member or a director or employee of a member of the applicant’s applicant group and also a director or employee of a member of another applicant group is—

• (i) taking part in the preparation of both applicant groups for participation in the award process; or

• (ii) receiving confidential information relating to both applicant groups.

Other information

6

Provide a brief description of the substance of—

• (a) agreements (if any) relating to the management of the applicant; and

• (b) any criminal investigations or proceedings in the United Kingdom or overseas of which the applicant is aware relating to the applicant or any member of its applicant group or its directors or officers.

Existing spectrum holdings

7

Confirm that the applicant has provided the details of existing spectrum holdings required under regulation 4(3)(a)(iii) of the Regulations.

Warranty

8

Provide the following warranty—

• “[Insert name of applicant] (the “applicant”) represents and warrants to the Office of Communications that— the persons authorised in section 2 of this application have read and understood the Regulations, the terms of the licence to be granted under the Regulations, and the Wireless Telegraphy Act 2006; the applicant has the legal authority to participate in the award process under the Regulations and to have a licence granted to it, and has in place all necessary consents, permissions and internal approvals for this purpose; the information provided in, or in support of, the application (including the details of existing spectrum holdings provided in accordance with regulation 4(3)(a)(iii) of the Regulations) is, to the best of the knowledge and belief of the applicant true, accurate and complete in all material respects; and the applicant is aware of the provisions in regulations 112 and 114 of the Regulations, including the provisions about disclosure of confidential information (as defined in the Regulations) and obtaining confidential information relating to another applicant or bidder and that any such activities may lead to forfeiture of sums on deposit and exclusion from the award process.

SCHEDULE 5 — DOCUMENT FOR MEMBER OF APPLICANT’S APPLICANT GROUP OR BIDDER GROUP WHO IS NOT AN ASSOCIATE

[Insert name of applicant or bidder] (the “applicant/bidder”) wishes to include [insert name and address of person to be included in applicant or bidder group who is not an associate] as a member of the applicant/bidder’s applicant or bidder group as defined in the Wireless Telegraphy (Licence Award) Regulations 2012 (“the Regulations”) for the purpose of the award process under the Regulations.

Under regulation 10 of the Regulations an applicant shall not be qualified to bid in the award process where a member of its bidder group is also a member of another applicant’s bidder group. Regulations 112 and 114 contain provisions on disclosure of confidential information (as defined in the Regulations) and obtaining confidential information relating to another applicant or bidder. Under the Regulations such activities may lead to forfeiture of sums on deposit and exclusion from the award process.

Applicant/bidder

1

In relation to regulations 10, 112 and 114 of the Regulations, the applicant/bidder represents and warrants to the Office of Communications (“OFCOM”) that so far as it is aware, having made all reasonable enquiries, [insert name of person to be included in applicant or bidder group who is not an associate] is not a member of any other applicant’s or bidder’s applicant or bidder group.

[Insert name of person to be included in applicant or bidder group who is not an associate]

2

[Insert name of person to be included in applicant or bidder group who is not an associate] represents and warrants to OFCOM that it—

• (a) consents to be a member of the applicant/bidder’s applicant or bidder group;

• (b) is not a member of any other applicant’s or bidder’s applicant or bidder group; and

• (c) is aware of the provisions in regulations 112 and 114 of the Regulations about disclosure of confidential information (as defined in the Regulations) and obtaining confidential information relating to another applicant or bidder.

SCHEDULE 6 — ELIGIBILITY POINTS ASSOCIATED WITH LOTS

The number of eligibility points associated with a lot of a type mentioned in an entry in Column (1) of the table is the number of points shown in the corresponding entry in Column (2).

The number of eligibility points associated with a selection of 2.6 GHz individual frequency lots shall be n– 1, where nis the number of lots selected.

Column (1) Type of lot	Column (2) Number of eligibility points
800 MHz paired frequency lot 2.6 GHz paired frequency lot 800 MHz coverage obligation lot 2.6 GHz concurrent low power 10 MHz lot 2.6 GHz concurrent low power 20 MHz lot	2250 150 4500 30 60

SCHEDULE 7 — DETERMINATION OF BASE PRICE

Base price

1

• (1) OFCOM shall determine a base price for each winning principal stage bid by imposition of the requirements that the base prices must satisfy that are set out in paragraphs 2 to 5.

• (2) Where a base price so determined is not a number of whole thousands of pounds, the base price shall be that price rounded up to the nearest number of whole thousands of pounds.

First requirement

2

The base price for each winning principal stage bid shall be—

• (a) no less than the total of the round prices in the first primary bid round for the lots included in the selection of lots specified in that winning principal stage bid; and

• (b) no greater than the amount of that winning principal stage bid.

Second requirement

3

• (1) Taking the base prices for the winning principal stage bids together, the base prices shall be such that if—

• (a) the amount bid by each winning bidder in respect of its winning principal stage bid had been the base price rather than the amount of its winning principal stage bid (“reduced winning principal stage bid”), and

• (b) subject to sub-paragraph (2), the amount bid by each winning bidder in respect of each other valid principal stage bid made by that bidder had been reduced by an amount equal to the difference between the amount of its winning principal stage bid and the base price for that winning principal stage bid,

the combination of the reduced winning principal stage bids submitted by the winning bidders would have been the valid combination of principal stage bids or one of the valid combinations of principal stage bids (as the case may be) for which the total value of the combination calculated in accordance with regulation 67(9) is the highest.

• (2) Where the amount of a bid has been reduced in accordance with sub-paragraph (1)(b) and is less than the total of the round prices in the first primary bid round for the lots included in the selection of lots specified in that bid, the amount of that bid shall be treated as if it were the total of the round prices in the first primary bid round for the lots included in the selection of lots specified in that bid for the purposes of this paragraph.

• (3) The bids mentioned in sub-paragraphs (1)(a) and (1)(b) shall, after reduction of the amount of those bids in accordance with those paragraphs, be treated as valid principal stage bids for the purposes of this paragraph.

Third requirement

4

Taking the base prices for the winning principal stage bids together, the total of those base prices shall be no greater than the total of any other prices for the winning principal stage bids that satisfy the requirements set out in paragraphs 2 and 3.

Fourth requirement

5

• (1) Taking the base prices for the winning principal stage bids together, the opportunity cost variance of those base prices calculated in accordance with sub-paragraph (2) shall be less than the opportunity cost variance, calculated in accordance with sub-paragraph (2), of any other prices for the winning principal stage bids that satisfy the requirements set out in paragraphs 2 to 4.

• (2) The opportunity cost variance (“$OC V B$”) of prices mentioned in sub-paragraph (1), is the amount calculated in accordance with the formula—

$$OC V B = ∑ ( p B − c B ) 2$ where— “$p B$”is the price for a winning principal stage bid; and “$c B$” is the amount calculated in accordance with the formula set out in sub-paragraph (3) in respect of that winning principal stage bid.$

• (3) The formula is—

$$c B = u B − t B + b B$ where— “$u B$” is the amount calculated in accordance with sub-paragraph (4); “$t B$”is the total value of the winning combination of bids calculated in accordance with regulation 67(9); and “$b B$” is the amount of the winning principal stage bid for which $p B$ is the price.$

• (4) The amount calculated in accordance with this sub-paragraph is the total value of the valid combination of principal stage bids or one of the valid combinations of principal stage bids (as the case may be) for which the total value of the combination calculated in accordance with regulation 67(9) is the highest where the valid combination or combinations of principal stage bids do not include any of the primary bids or supplementary bids made by the winning bidder that submitted the winning principal stage bid for which $p B$ is the price, but may include valid opt-in bids made by that bidder (if any).

Interpretation

6

In this Schedule “valid combination of principal stage bids” shall be construed in accordance with regulation 67.

SCHEDULE 8 — DETERMINATION OF ADDITIONAL PRICE: NUMBERED800MHzPAIRED FREQUENCYLOTS

Additional price

1

• (1) OFCOM shall determine an additional price for each winning assignment stage bid for numbered 800 MHz paired frequency lots by imposition of the requirements that the additional prices must satisfy that are set out in paragraphs 2 to 5.

• (2) Where an additional price so determined includes a fraction of a pound, the additional price shall be that price rounded up to the nearest whole pound.

2

The additional price for each winning assignment stage bid for numbered 800 MHz paired frequency lots shall be no less than zero and no more than the amount of that winning assignment stage bid.

3

• (1) Taking the additional prices for the winning assignment stage bids for numbered 800 MHz paired frequency lots together, the additional prices shall be such that if—

• (a) the amount bid by each winning bidder for the assignment stage option selected in its winning assignment stage bid for numbered 800 MHz paired frequency lots had been the additional price rather than the amount of its winning assignment stage bid (“800 MHz reduced winning assignment stage bid”), and

• (b) subject to sub-paragraph (2), the amount bid by each winning bidder in respect of each other valid assignment stage bid for numbered 800 MHz paired frequency lots made by that bidder had been reduced by an amount equal to the difference between the amount of its winning assignment stage bid for numbered 800 MHz paired frequency lots and the additional price for that relevant winning assignment stage bid,

the combination of the 800 MHz reduced winning assignment stage bids submitted by the winning bidders would have been the valid combination of assignment stage bids or one of the valid combinations of assignment stage bids (as the case may be) for numbered 800 MHz paired frequency lots having the highest total value of amounts bid.

• (2) Where the amount of a bid has been reduced in accordance with sub-paragraph (1)(b) and is less than zero, the amount of that bid shall be treated as if it were zero for the purposes of this paragraph.

• (3) The bids mentioned in sub-paragraphs (1)(a) and (1)(b) shall, after reduction of the amount of those bids in accordance with those paragraphs, be treated as valid assignment stage bids for the purposes of this paragraph.

4

Taking the additional prices for the winning assignment stage bids for numbered 800 MHz paired frequency lots together, the total of those additional prices shall be no greater than the total of any other prices for the winning assignment stage bids for numbered 800 MHz paired frequency lots that satisfy the requirements set out in paragraphs 2 and 3.

5

• (1) Taking the additional prices for the winning assignment stage bids for numbered 800 MHz paired frequency lots together, the opportunity cost variance of those additional prices calculated in accordance with sub-paragraph (2) shall be less than the opportunity cost variance, calculated in accordance with sub-paragraph (2), of any other prices for the winning assignment stage bids for numbered 800 MHz paired frequency lots that satisfy the requirements set out in paragraphs 2 to 4.

• (2) The opportunity cost variance (“$OC V A$”) of prices mentioned in sub-paragraph (1) is the amount calculated in accordance with the formula—

$$OC V A = ∑ ( p A − c A ) 2$ where— “$p A$”is the price for a winning assignment stage bid; and “$c A$” is the amount calculated in accordance with the formula set out in sub-paragraph (3) in respect of that winning assignment stage bid.$

• (3) The formula is—

$$c A = u A − t A + b A$ where— “$u A$” is the amount calculated in accordance with sub-paragraph (4); “$t A$”is the total amount of the winning assignment stage bids for numbered 800 MHz paired frequency lots; and “$b A$” is the amount of the winning assignment stage bid for which $p A$ is the price.$

• (4) The amount calculated in accordance with this sub-paragraph is the total amount of the valid combination of assignment stage bids for numbered 800 MHz paired frequency lots or one of the valid combinations of assignment stage bids for numbered 800 MHz paired frequency lots (as the case may be) having the highest total value of amounts bid where, for each assignment stage bid for numbered 800 MHz paired frequency lots made by the winning bidder that submitted the winning assignment stage bid for which $p A$ is the price, the amount of that assignment stage bid is treated as if it were zero for the purposes of this sub-paragraph.

• (5) Where the amount of an assignment stage bid is treated as if it were zero in accordance with sub-paragraph (4), that assignment stage bid shall be treated as a valid assignment stage bid for the purposes of that sub-paragraph.

6

In this Schedule “valid combination of assignment stage bids” shall be construed in accordance with regulation 103.

SCHEDULE 9 — DETERMINATION OF ADDITIONAL PRICE: NUMBERED2.6GHzPAIREDFREQUENCYLOTS

Additional price

1

• (1) OFCOM shall determine an additional price for each winning assignment stage bid for numbered 2.6 GHz paired frequency lots by imposition of the requirements that the additional prices must satisfy that are set out in paragraphs 2 to 5.

• (2) Where an additional price so determined includes a fraction of a pound, the additional price shall be that price rounded up to the nearest whole pound.

2

The additional price for each winning assignment stage bid for numbered 2.6 GHz paired frequency lots shall be no less than zero and no more than the amount of that winning assignment stage bid.

3

• (1) Taking the additional prices for the winning assignment stage bids for numbered 2.6 GHz paired frequency lots together, the additional prices shall be such that if—

• (a) the amount bid by each winning bidder for the assignment stage option selected in its winning assignment stage bid for numbered 2.6 GHz paired frequency lots had been the additional price rather than the amount of its winning assignment stage bid (“2.6 GHz paired reduced winning assignment stage bid”), and

• (b) subject to sub-paragraph (2), the amount bid by each winning bidder in respect of each other valid assignment stage bid for numbered 2.6 GHz paired frequency lots made by that bidder had been reduced by an amount equal to the difference between the amount of its winning assignment stage bid for numbered 2.6 GHz paired frequency lots and the additional price for that relevant winning assignment stage bid,

the combination of the 2.6 GHz paired reduced winning assignment stage bids submitted by the winning bidders would have been the valid combination of assignment stage bids or one of the valid combinations of assignment stage bids (as the case may be) for numbered 2.6 GHz paired frequency lots having the highest total value of amounts bid.

• (2) Where the amount of a bid has been reduced in accordance with sub-paragraph (1)(b) and is less than zero, the amount of that bid shall be treated as if it were zero for the purposes of this paragraph.

• (3) The bids mentioned in sub-paragraphs (1)(a) and (1)(b) shall, after reduction of the amount of those bids in accordance with those paragraphs, be treated as valid assignment stage bids for the purposes of this paragraph.

4

Taking the additional prices for the winning assignment stage bids for numbered 2.6 GHz paired frequency lots together, the total of those additional prices shall be no greater than the total of any other prices for the winning assignment stage bids for numbered 2.6 GHz paired frequency lots that satisfy the requirements set out in paragraphs 2 and 3.

5

• (1) Taking the additional prices for the winning assignment stage bids for numbered 2.6 GHz paired frequency lots together, the opportunity cost variance of those additional prices calculated in accordance with sub-paragraph (2) shall be less than the opportunity cost variance, calculated in accordance with sub-paragraph (2), of any other prices for the winning assignment stage bids for numbered 2.6 GHz paired frequency lots that satisfy the requirements set out in paragraphs 2 to 4.

• (2) The opportunity cost variance (“$OC V A$”) of prices mentioned in sub-paragraph (1) is the amount calculated in accordance with the formula—

$$OC V A = ∑ ( p A − c A ) 2$ where— “$p A$”is the price for a winning assignment stage bid; and “$c A$” is the amount calculated in accordance with the formula set out in sub-paragraph (3) in respect of that winning assignment stage bid.$

• (3) The formula is—

$$c A = u A − t A + b A$ where— “$u A$” is the amount calculated in accordance with sub-paragraph (4); “$t A$”is the total amount of the winning assignment stage bids for numbered 2.6 GHz paired frequency lots; and “$b A$” is the amount of the winning assignment stage bid for which $p A$ is the price.$

• (4) The amount calculated in accordance with this sub-paragraph is the total amount of the valid combination of assignment stage bids for numbered 2.6 GHz paired frequency lots or one of the valid combinations of assignment stage bids for numbered 2.6 GHz paired frequency lots (as the case may be) having the highest total value of amounts bid where, for each assignment stage bid for numbered 2.6 GHz paired frequency lots made by the winning bidder that submitted the winning assignment stage bid for which $p A$ is the price, the amount of that assignment stage bid is treated as if it were zero for the purposes of this sub-paragraph.

• (5) Where the amount of an assignment stage bid is treated as if it were zero in accordance with sub-paragraph (4), that assignment stage bid shall be treated as a valid assignment stage bid for the purposes of that sub-paragraph.

6

In this Schedule “valid combination of assignment stage bids” shall be construed in accordance with regulation 104.

SCHEDULE 10 — DETERMINATION OF ADDITIONAL PRICE: NUMBERED2.6GHzINDIVIDUALFREQUENCYLOTS

Additional price

1

• (1) OFCOM shall determine an additional price for each winning assignment stage bid for numbered 2.6 GHz individual frequency lots by imposition of the requirements that the additional prices must satisfy that are set out in paragraphs 2 to 5.

• (2) Where an additional price so determined includes a fraction of a pound, the additional price shall be that price rounded up to the nearest whole pound.

2

The additional price for each winning assignment stage bid for numbered 2.6 GHz individual frequency lots shall be no less than zero and no more than the amount of that winning assignment stage bid.

3

• (1) Taking the additional prices for the winning assignment stage bids for numbered 2.6 GHz individual frequency lots together, the additional prices shall be such that if—

• (a) the amount bid by each winning bidder for the assignment stage option selected in its winning assignment stage bid for numbered 2.6 GHz individual frequency lots had been the additional price rather than the amount of its winning assignment stage bid (“2.6 GHz individual reduced winning assignment stage bid”), and

• (b) subject to sub-paragraph (2), the amount bid by each winning bidder in respect of each other valid assignment stage bid for numbered 2.6 GHz individual frequency lots made by that bidder had been reduced by an amount equal to the difference between the amount of its winning assignment stage bid for numbered 2.6 GHz individual frequency lots and the additional price for that relevant winning assignment stage bid,

the combination of the 2.6 GHz individual reduced winning assignment stage bids submitted by the winning bidders would have been the valid combination of assignment stage bids or one of the valid combinations of assignment stage bids (as the case may be) for numbered 2.6 GHz individual frequency lots having the highest total value of amounts bid.

• (2) Where the amount of a bid has been reduced in accordance with sub-paragraph (1)(b) and is less than zero, the amount of that bid shall be treated as if it were zero for the purposes of this paragraph.

• (3) The bids mentioned in sub-paragraphs (1)(a) and (1)(b) shall, after reduction of the amount of those bids in accordance with those paragraphs, be treated as valid assignment stage bids for the purposes of this paragraph.

4

Taking the additional prices for the winning assignment stage bids for numbered 2.6 GHz individual frequency lots together, the total of those additional prices shall be no greater than the total of any other prices for the winning assignment stage bids for numbered 2.6 GHz individual frequency lots that satisfy the requirements set out in paragraphs 2 and 3.

5

• (1) Taking the additional prices for the winning assignment stage bids for numbered 2.6 GHz individual frequency lots together, the opportunity cost variance of those additional prices calculated in accordance with sub-paragraph (2) shall be less than the opportunity cost variance, calculated in accordance with sub-paragraph (2), of any other prices for the winning assignment stage bids for numbered 2.6 GHz individual frequency lots that satisfy the requirements set out in paragraphs 2 to 4.

• (2) The opportunity cost variance (“$OC V A$”) of prices mentioned in sub-paragraph (1) is the amount calculated in accordance with the formula—

$$OC V A = ∑ ( p A − c A ) 2$ where— “$p A$”is the price for a winning assignment stage bid; and “$c A$” is the amount calculated in accordance with the formula set out in sub-paragraph (3) in respect of that winning assignment stage bid.$

• (3) The formula is—

$$c A = u A − t A + b A$ where— “$u A$” is the amount calculated in accordance with sub-paragraph (4); “$t A$”is the total amount of the winning assignment stage bids for numbered 2.6 GHz individual frequency lots; and “$b A$” is the amount of the winning assignment stage bid for which $p A$ is the price.$

• (4) The amount calculated in accordance with this sub-paragraph is the total amount of the valid combination of assignment stage bids for numbered 2.6 GHz individual frequency lots or one of the valid combinations of assignment stage bids for numbered 2.6 GHz individual frequency lots (as the case may be) having the highest total value of amounts bid where, for each assignment stage bid for numbered 2.6 GHz individual frequency lots made by the winning bidder that submitted the winning assignment stage bid for which $p A$ is the price, the amount of that assignment stage bid is treated as if it were zero for the purposes of this sub-paragraph.

• (5) Where the amount of an assignment stage bid is treated as if it were zero in accordance with sub-paragraph (4), that assignment stage bid shall be treated as a valid assignment stage bid for the purposes of that sub-paragraph.

6

In this Schedule “valid combination of assignment stage bids” shall be construed in accordance with regulation 105.

Signed

Ed Richards — Chief Executive of the Office of Communications — For and by the authority of the Office of Communications — 9th November 2012

Explanatory note

(This note is not part of the Regulations)

EXPLANATORY NOTE

These Regulations set out the procedure that will apply to the grant of wireless telegraphy licences at frequencies which are set out in Schedule 1.

To apply, a body corporate must deliver the documents required by regulation 4(3) to the Office of Communications (“OFCOM”) on a day specified by OFCOM. The documents must give details of existing spectrum holdings of the applicant and others listed in regulation 4(3)(a)(iii). An initial deposit of one hundred thousand pounds must be paid to OFCOM (regulation 4(3)(b)).

OFCOM will determine which applicants are fit to hold a licence, taking into account the matters set out in regulation 9(2). If not disqualified, and if there is no member of its bidder group which is also a member of another bidder group, an applicant shall be qualified to participate (regulation 10(1)).

After giving applicants an opportunity to withdraw, OFCOM will determine the number of bidders (regulation 13), an additional deposit may be paid (regulation 14) and OFCOM will determine an eligibility limit (a term defined in the Regulations) by reference to sums paid on deposit. This limits the bids that can be made in the opt-in round and first primary round (regulation 15). A limit also applies in subsequent rounds (regulations 25(8) and 43(2)). OFCOM will record bidders’ spectrum holdings (regulation 16).

Under Part 4, the process for the award of licences consists of three stages.

The first stage, called the principal stage, involves one round for the submission of opt-in bids, one or more rounds for the submission of primary bids and one round for the submission of supplementary bids (Chapters 2 to 9 of Part 4).

Only certain opt-in bids may be made by a bidder, depending on the bidder’s recorded spectrum holdings (regulation 19). Opt-in selections and prices are set out in Schedule 2.

For primary bid rounds and the supplementary bids round bidding is limited to certain selections of lots (regulations 22, 25(1) and 42). OFCOM will prepare a permissible bid selection list for each bidder taking account of certain factors including the spectrum cap rule. The rule refers to bidders’ recorded spectrum holdings.

The winning principal stage bids are determined in accordance with regulation 67, and the price payable in respect of each winning principal stage bid in accordance with regulation 68.

The second stage, called the assignment stage, is the procedure set out in Chapters 10 to 14 of Part 4. This procedure determines the frequencies which will be assigned to each winning bidder. Some frequency assignments are pre-determined (Chapter 11 of Part 4) and others are to be determined through a further round of bidding (Chapters 12, 13 and 14 of Part 4).

The third stage, called the grant stage, is the procedure set out in Chapter 15 of Part 4. OFCOM will grant licences to winning bidders and refund any sums due to winning bidders (regulations 109 and 110).

If in relation to an applicant which is qualified to bid or a bidder, OFCOM are satisfied that certain events are occurring or have occurred and that the occurrence would materially affect the outcome of the award process, the applicant or bidder concerned will forfeit sums on deposit held by OFCOM and may be excluded from the award process (regulation 112).

A full regulatory impact assessment of the effect of these Regulations has been prepared. Copies of the impact assessment and copies of the publication referred to on page 31 of these Regulations are available to the public from the OFCOM library at Riverside House, 2a Southwark Bridge Road, London SE1 9HA, telephone 020 7981 3000 or on the OFCOM internet website at www.ofcom.org.uk. Copies of the impact assessment have also been placed in the libraries of the Houses of Parliament.

Footnotes

[^f00001]: 2006 c.36.

[^f00002]: S.I. 2010/3024.

[^f00003]: 2006 c.46.

[^f00004]: 2003 c.21.

[^f00005]: OFCOM have provided notes on the determination of the licence fees payable by bidders in a document called ‘Notes on determination of licence fees payable by bidders in relation to the award of the 800 MHz and 2.6 GHz spectrum bands: Schedules 7, 8, 9 and 10 to the Wireless Telegraphy (Licence Award) Regulations 2012’ published on 9th November 2012.

[^f00006]: 2003 c.21.