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The Wireless Telegraphy (Licence Award) Regulations 2020

Type Statutory-Instrument

Publication 2020-11-03

Last updated 2021-03-09

State In force

Department King's Printer of Acts of Parliament

Source legislation.gov.uk

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Made: 3rd November 2020

Coming into force: 18th November 2020

The Office of Communications (“OFCOM”), in exercise of the powers conferred by section 14(1), (2), (3), (4), (6) and (7) and section 122(7) of the Wireless Telegraphy Act 2006 (“the Act”), make the following Regulations.

Before making these Regulations OFCOM have given notice of their proposal to do so in accordance with section 122(4)(a) of the Act, published notice of their proposal in accordance with section 122(4)(b) of the Act and have considered the representations made to them before the time specified in that notice in accordance with section 122(4)(c) of the Act.

PART 1 — Introductory

Citation, commencement, and extent

1

(1) These Regulations may be cited as the Wireless Telegraphy (Licence Award) Regulations 2020 and shall come into force on 18th November 2020.

(2) These Regulations shall not extend to the Channel Islands or the Isle of Man.

Interpretation

2

(1) In these Regulations—

“3.6 GHz assignment stage bid” shall be construed in accordance with regulation 68(1);

“3.6 GHz assignment stage option” has the meaning given in regulation 68(4);

“3.6 GHz assignment stage option list” has the meaning given in regulation 68(4);

“3.6 GHz base price” has the meaning given in regulation 34(1);

“3.6 GHz licence” has the meaning given in regulation 107(a);

“3.6 GHz lot additional price” has the meaning given in regulation 100 or regulation 101 as the context requires;

“700 MHz individual frequency lot additional price” has the meaning given in regulation 103;

“700 MHz individual frequency lot assignment stage bid” shall be construed in accordance with regulation 71(1);

“700 MHz individual frequency lot assignment stage option” has the meaning given in regulation 71(4);

“700 MHz individual frequency lot assignment stage option list” has the meaning given in regulation 71(4);

“700 MHz individual frequency lot base price” has the meaning given in regulation 34(2);

“700 MHz licence” has the meaning given in regulation 107(b);

“700 MHz paired frequency lot additional price” has the meaning given in regulation 105;

“700 MHz paired frequency lot assignment stage bid” shall be construed in accordance with regulation 74(1);

“700 MHz paired frequency lot assignment stage option” has the meaning given in regulation 74(4);

“700 MHz paired frequency lot assignment stage option list” has the meaning given in regulation 74(4);

“700 MHz paired frequency lot base price” has the meaning given in regulation 34(3);

“additional deposit” has the meaning given in regulation 15(1);

“additional price” means the 3.6 GHz lot additional price, the 700 MHz individual frequency lot additional price or the 700 MHz paired frequency lot additional price;

“adjacency agreement” means a full adjacency agreement or a partial adjacency agreement;

“applicant” means a body corporate making an application for a licence;

“applicant group” means in relation to an applicant—that applicant;each associate of that applicant; andeach person in respect of whom the applicant has delivered to OFCOM a completed document in the form set out in Schedule 3;

“assignment stage” has the meaning given in regulation 19;

“assignment stage bid” means a 3.6 GHz assignment stage bid, a 700 MHz individual lot assignment stage bid or a 700 MHz paired frequency lot assignment stage bid;

“assignment stage form” shall be construed in accordance with regulation 65;

“assignment stage option” means a 3.6 GHz assignment stage option, a 700 MHz individual frequency lot assignment stage option or a 700 MHz paired frequency lot assignment stage option;

“assignment stage round” shall be construed in accordance with regulation 57;

“associate” means, in relation to an applicant or bidder, a person who has a material interest in that applicant or bidder;

“authorised person” means a person specified by an applicant in its application as authorised to bind that applicant for all purposes relating to the award process;

“bidder” means an applicant which has qualified to bid in the award process and which has not withdrawn from the award process on or before the last day for withdrawal;

“bidder group” shall be construed in accordance with regulation 7(3);

“bidder ranking list” has the meaning given in regulation 30(2);

“category one bidders” has the meaning given in regulation 30(1)(a);

“category two bidders” has the meaning given in regulation 30(1)(b);

“category three bidder” has the meaning given in regulation 30(1)(c);

“confidential information” means, in relation to any applicant or bidder, any information which is not in the public domain and which, if it were made public or disclosed to another applicant (or potential applicant) or bidder or a member of their respective applicant or bidder group, would be likely to affect decisions that such other applicant (or potential applicant) or bidder may make in relation to the award process;

“current round” means, except in regulations 41 to 43 where the meaning in regulation 40(2) applies, the principal stage round that has begun but has not yet ended;

“deadline”, in relation to any requirement imposed on any person by or under these Regulations, means (as the case may require)—the time;the date; orthe date, and the time on that date;by which that requirement must be fulfilled by that person;

“electronic auction system” means the system established by OFCOM for bidders to participate in the award process;

“eligibility event” shall be construed in accordance with regulation 43;

“eligibility limit” means, in relation to a bidder, a number of eligibility points which limits the bids that may be made by the bidder in a principal stage round;

“eligibility points used” shall be construed in accordance with regulation 42;

“excess demand” shall be construed in accordance with regulation 46;

“existing spectrum holdings” has the meaning given in regulation 5(1);

“financial exposure” shall be construed in accordance with regulation 54(2);

“full adjacency agreement” shall be construed in accordance with regulation 82;

“full adjacency agreement form” means the form in Schedule 9;

“GHz” means gigahertz;

“grant stage” has the meaning given in regulation 19;

“initial deposit” shall be construed in accordance with regulation 4(3)(b);

“last day for withdrawal” has the meaning given in regulation 13(1);

“leftover 3.6 GHz lots” has the meaning given in regulation 69(2)(b)(ii), regulation 97(4)(e) or regulation 98(4)(d) as the context requires;

“licence” means a wireless telegraphy licence to be granted pursuant to these Regulations to establish or use a wireless telegraphy station or install or use wireless telegraphy apparatus in the United Kingdom at frequencies comprised in one or more of the 3.6 GHz lots, 700 MHz individual frequency lots or 700 MHz paired frequency lots to be determined in accordance with the procedure set out in these Regulations;

“material interest” means, whether held directly or indirectly—any interest (construed in accordance with sections 820 to 825 of the Companies Act 2006 ) in—any share which carries, or any shares which together carry, more than twenty-five per cent of the votes entitled to be cast at a general meeting of the applicant or bidder; orany share or shares in the case where the consent of the holder of that share or those shares is required for the conduct of any business of the applicant or bidder; orthe right to appoint or remove a majority of the applicant's or bidder's board of directors;

“MHz” means megahertz;

“most recent round” means the principal stage round that has most recently ended;

“negotiation period” shall be construed in accordance with regulation 84(2);

“OFCOM” means the Office of Communications;

“OFCOM's bank account” means the bank account nominated by OFCOM for the purposes of the award process, details of which are published on their website;

“overall bid list” has the meaning given in regulation 31(3);

“overall bid constraint” shall be construed in accordance with regulation 18;

“partial adjacency agreement” shall be construed in accordance with regulation 83;

“partial adjacency agreement form” means the form in Schedule 8;

“partial agreement parties” has the meaning given in regulation 83;

“pounds” means pounds sterling;

“previous round” means the principal stage round that immediately preceded the most recent round;

“principal stage” has the meaning given in regulation 19;

“principal stage bid” shall be construed in accordance with regulation 22;

“principal stage form” shall be construed in accordance with regulation 21;

“principal stage round” shall be construed in accordance with regulation 20;

“required assignment stage deposit” shall be construed in accordance with regulation 81;

“required final principal stage deposit” shall be construed in accordance with regulation 55;

“round” means a period of time specified by OFCOM during which bidders may make bids in accordance with the procedure set out in these Regulations;

“round event” shall be construed in accordance with regulation 23;

“round price” shall be construed in accordance with regulations 24 to 28;

“standing high bid status” shall be construed in accordance with regulations 29 to 32;

“third party” has the meaning given in regulation 4(3)(a)(iii)(ee);

“third party parent” has the meaning given in regulation 4(3)(a)(iii)(ff);

“total 3.6 GHz base price” has the meaning given in regulation 35(1);

“total 700 MHz individual frequency lot base price” has the meaning given in regulation 35(2);

“total 700 MHz paired frequency lot base price” has the meaning given in regulation 35(3);

“total auction sum” shall be construed in accordance with regulation 114;

“total base price” means, in respect of a bidder, the sum of that bidder's total 3.6 GHz base price (if any), total 700 MHz individual frequency lot base price (if any), and total 700 MHz paired frequency lot base price (if any);

“total frequencies associated with a bidder's principal stage form” has the meaning given in regulation 37(2);

“valid 3.6 GHz assignment stage bid” shall be construed in accordance with regulation 70(4);

“valid 700 MHz individual frequency lot assignment stage bid” shall be construed in accordance with regulation 73(4);

“valid 700 MHz paired frequency lot assignment stage bid” shall be construed in accordance with regulation 76(4);

“valid assignment stage bid” means a valid 3.6 GHz assignment stage bid, a valid 700 MHz individual frequency lot assignment stage bid and 700 MHz paired frequency lot assignment stage bid;

“valid assignment stage form” shall be construed in accordance with regulation 66;

“valid combination of 3.6 GHz assignment stage bids” shall be construed in accordance with regulation 97(4) or regulation 98(4) as the context requires;

“valid combination of 700 MHz individual frequency lot assignment stage bids” shall be construed in accordance with regulation 102(4);

“valid combination of 700 MHz paired frequency lot assignment stage bids” shall be construed in accordance with regulation 104(4);

“valid full adjacency agreement” shall be construed in accordance with regulation 86;

“valid partial adjacency agreement” shall be construed in accordance with regulation 87;

“valid request to carry forward its eligibility limit” shall be construed in accordance with regulation 21;

“valid principal stage bid” shall be construed in accordance with regulation 21;

“valid principal stage form” shall be construed in accordance with regulation 21;

“winning 3.6 GHz assignment stage bid” shall be construed in accordance with regulation 97(2) or 98(2) as the context requires;

“winning 700 MHz individual frequency lot assignment stage bid” shall be construed in accordance with regulation 102(2);

“winning 700 MHz paired frequency lot assignment stage bid” shall be construed in accordance with regulation 104(2);

“winning assignment stage bid” means a winning 3.6 GHz assignment stage bid, a winning 700 MHz individual frequency lot assignment stage bid or a winning 700 MHz paired frequency lot assignment stage bid;

“winning bidder” means a winning bidder for 3.6 GHz lots, a winning bidder for 700 MHz individual frequency lots or a winning bidder for 700 MHz paired frequency lots;

“winning bidder for 3.6 GHz lots” means a bidder who made bids for 3.6 GHz lots which became winning principal stage bids in accordance with regulations 33;

“winning bidder for 700 MHz individual frequency lots” means a bidder who made bids for 700 MHz individual frequency lots which became winning principal stage bids in accordance with regulations 33;

“winning bidder for 700 MHz paired frequency lots” means a bidder who made bids for 700 MHz paired frequency lots which became winning principal stage bids in accordance with regulations 33;

“winning combination of valid 3.6 GHz assignment stage bids” shall be construed in accordance with regulation 97(3) or regulation 98(3) as the context requires;

“winning combination of valid 700 MHz individual frequency lot assignment stage bids” shall be construed in accordance with regulation 102(3);

“winning combination of valid 700 MHz paired frequency lot assignment stage bids” shall be construed in accordance with regulation 104(3); and

“winning principal stage bid” shall be construed in accordance with regulations 33.

(2) A reference in these Regulations to a “3.6 GHz lot”, a “700 MHz individual frequency lot” or a “700 MHz paired frequency lot” shall be construed in accordance with Schedule 1.

(3) A reference in these Regulations to a “lot type” or “lot” shall be construed in accordance with Schedule 1.

(4) A reference in these Regulations to a numbered 3.6 GHz lot, a numbered 700 MHz individual frequency lot, a numbered 700 MHz paired frequency lot or a “block” of such lots shall be construed in accordance with Schedule 1.

PART 2 — Application stage

Applications for the grant of a licence

3

Applications for the grant of a licence shall only be made in accordance with the procedure set out in these Regulations.

Application

4

(1) Only a body corporate may apply to OFCOM for a licence.

(2) A body corporate may only make one application.

(3) To apply for a licence, a body corporate must—

(a) on the day or days specified by OFCOM for receipt of applications, deliver to OFCOM using the delivery method specified by OFCOM, within the times on that day or those days specified by OFCOM—

(i) a document containing the application information required by, and the warranty set out in, Schedule 2, completed in respect of the applicant and signed on its behalf by two authorised persons;

(ii) for each person, not being an associate of the applicant, which the applicant wishes to join its applicant group, a document in the form set out in Schedule 3 which has been—

(aa) completed by the applicant and signed on its behalf by two authorised persons; and

(bb) completed by and signed by or on behalf of the person in respect of whom that document is completed; and

(iii) a document setting out the details of the existing spectrum holdings of—

(aa) the applicant;

(bb) each other member of its applicant group;

(cc) each person in whom the applicant has a material interest;

(dd) each person in whom any other member of its applicant group has a material interest;

(ee) any person (“third party”) who has entered into a contract or arrangement with the applicant (or with any other member of its applicant group or any person in whom the applicant or any other member of its applicant group has a material interest) to acquire rights under a licence granted pursuant to the award process;

(ff) any person who has a material interest in a third party (“third party parent”);

(gg) any person in whom a third party has a material interest;

(hh) any person in whom a third party parent has a material interest; and

(b) by a deadline specified by OFCOM, pay into OFCOM's bank account, with accompanying information which identifies the applicant, an initial deposit of one hundred thousand pounds.

(4) OFCOM shall publish the delivery method, the day or days, times and deadline on their website.

(5) The delivery method to be specified and published by OFCOM may require delivery of original signed documents to OFCOM premises or electronic delivery of an electronic version of originally signed documents.

(6) The details of existing spectrum holdings that are required are—

(a) the wireless telegraphy licence number; and

(b) the frequencies.

Meaning of existing spectrum holdings

5

(1) In these Regulations “existing spectrum holdings” means—

(a) any authorisation to establish or use a wireless telegraphy station, or to install or use wireless telegraphy apparatus, under a wireless telegraphy licence which relates to any of the frequencies in the frequency bands listed in Schedule 7; and

(b) any contract or arrangement under which such an authorisation is to be acquired.

PART 3 — Qualification stage

CHAPTER 1 — Qualification

Notification of names of applicants and associates

6

(1) OFCOM shall give notice to each applicant of—

(a) the name of each other applicant and the names of their associates; and

(b) the deadline by which each applicant must notify OFCOM under paragraph (3).

(2) On receipt of that notice, each applicant must examine the names of the other applicants and their associates and determine whether any member of its applicant group is also an associate of another applicant or is also an applicant.

(3) Where an applicant determines that a member of its applicant group is also an associate of another applicant or is also an applicant, it must notify the other applicant and OFCOM of that fact by the deadline specified by OFCOM.

(4) If it appears to OFCOM from any application or notice that a member of one applicant group is also a member of another applicant group, OFCOM shall give notice to each of the applicants concerned of that fact and specify a deadline by when each applicant concerned must notify OFCOM of any change in circumstances the effect of which is that no member of its applicant group is also a member of another applicant group.

Recording of applicant group members

7

(1) Where there has been a change in the composition of an applicant's applicant group since the date of the application, that applicant must deliver to OFCOM revised versions of the documents provided under regulations 4(3)(a)(i) to 4(3)(a)(iii) which comply with those provisions following that change.

(2) OFCOM shall record the members of each applicant group, taking account of any changes notified under paragraph (1).

(3) Each applicant group so recorded shall constitute a bidder group.

Subsequent changes to bidder groups

8

(1) An applicant or bidder may change its bidder group but, in relation to the award process, the applicant or bidder shall be subject to regulations 11(2), 122 and 124 if they apply to any such change.

(2) If a change involves the addition or departure of an associate, the applicant or bidder must notify OFCOM of the change and deliver to OFCOM a revised version of the documents provided under regulations 4(3)(a)(i) and 4(3)(a)(iii) which comply with those provisions following the change.

(3) If a change involves the addition of a person who is not an associate of the applicant or bidder to its bidder group, the applicant or bidder must deliver to OFCOM—

(a) a document in the form set out in Schedule 3 completed by the applicant or bidder and signed on its behalf by two authorised persons and completed by and signed by or on behalf of the person in respect of whom that document is completed; and

(b) a revised version of the document provided under regulation 4(3)(a)(iii) which complies with that provision following the change.

Changes to existing spectrum holdings

9

If an applicant or, in relation to an applicant, any person referred to in regulation 4(3)(a)(iii) changes its existing spectrum holdings before existing spectrum holdings are recorded under regulation 17, the applicant must notify OFCOM and deliver to OFCOM a revised version of the document provided under regulation 4(3)(a)(iii) which complies with that provision following the change.

Fitness to hold a licence

10

(1) OFCOM shall, for each applicant which has submitted an application in accordance with regulation 4, determine whether that applicant is fit to hold a licence.

(2) In making their determination under paragraph (1), OFCOM shall take into account—

(a) any direction given by the Secretary of State to OFCOM under section 5 of the Communications Act 2003 ;

(b) whether the applicant is a fit and proper person to hold a licence having regard to the probity of—

(i) the applicant;

(ii) each other member of the applicant's bidder group; and

(iii) each director of each member of the applicant's bidder group;

(c) whether any of the information submitted to OFCOM by the applicant in connection with the award process is false or misleading;

(d) whether any member of the applicant's bidder 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;

(e) whether any member of the applicant's bidder group has acted or is acting in a way which is likely to distort the outcome of the award process;

(f) whether any member of the applicant's bidder group, or any person to whom confidential information has been disclosed, has disclosed, or is disclosing or attempting to disclose or has incited or is 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 the applicant's bidder group;

(iii) to a provider of finance for the purpose of raising finance for the applicant's application; or

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

(g) whether any member of the applicant's bidder group has obtained or is obtaining or attempting to obtain confidential information relating to another applicant;

(h) whether any member of the applicant's bidder 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

(i) whether any person who is a member or a director or an employee of a member of the applicant's bidder group and is also a director or an 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.

(3) Applicants must, if requested to do so by OFCOM, provide by a deadline specified by OFCOM any information or documentation which OFCOM require to make their determination.

(4) If an applicant does not provide such information or documentation by the deadline specified by OFCOM, OFCOM shall also take that fact into account in making their determination.

(5) Where OFCOM determine that an applicant is not fit to hold a licence the applicant shall be disqualified from the award process.

(6) OFCOM shall inform an applicant which is disqualified of their decision and the reasons for it but that applicant's initial deposit shall not be forfeited because of that decision.

Qualification to participate in the award process

11

(1) Each applicant—

(a) which was not disqualified under regulation 10, and

(b) which has no member of its bidder group which is also a member of the bidder group of another applicant (which was not disqualified under regulation 10),

Publication of names of qualified applicants

12

(1) OFCOM shall notify each applicant qualified to participate of—

(a) the name of each other applicant who is so qualified; and

(b) the names of their associates.

(2) OFCOM shall publish the names of all applicants who are so qualified on OFCOM's website.

Withdrawal of an application

13

(1) OFCOM shall notify each applicant qualified to participate of the last day for withdrawal from the award process (“last day for withdrawal”) and shall publish the last day for withdrawal (with refund of the initial deposit) on OFCOM's website.

(2) If, on or before the last day for withdrawal, OFCOM receives notice from an applicant that it wishes to withdraw its application, signed by two authorised persons, the application shall be withdrawn and the applicant shall be excluded from the award process but that applicant's initial deposit shall not be forfeited for that reason.

(3) That applicant shall not be re-admitted to the award process.

(4) OFCOM shall notify all other applicants of the withdrawal.

Determination of number of bidders

14

(1) An applicant may not withdraw from the award process after the last day for withdrawal.

(2) After the last day for withdrawal, OFCOM shall determine the number of bidders.

(3) Where there are no bidders, OFCOM shall complete the award process by refunding to applicants which were not qualified, or withdrew in accordance with regulation 13, their initial deposit (where such deposit has not been forfeited) but not any interest which has accrued on the deposit.

(4) Where there are one or more bidders—

(a) OFCOM shall refund to applicants which were not qualified, or withdrew in accordance with regulation 13, their initial deposit (where such deposit has not been forfeited) but not any interest which has accrued on the deposit; and

(b) OFCOM shall grant licences in accordance with the procedure set out in these Regulations.

(5) OFCOM shall publish the names of the bidders on OFCOM's website.

CHAPTER 2 — Additional deposit and eligibility limit for the first principal stage round

Additional deposit before the first principal stage round

15

(1) A bidder which wishes to participate in the principal stage must pay, in addition to the initial deposit, a deposit of at least nine hundred thousand pounds (the “additional deposit”) which shall be taken into account by OFCOM in accordance with regulation 16 for the purpose of calculating the bidder's eligibility limit for the first principal stage round.

(2) To pay the additional deposit, a bidder must, by a deadline specified by OFCOM, pay the additional deposit into OFCOM's bank account with accompanying information which identifies the bidder.

(3) Where a bidder does not pay the additional deposit by the deadline, that bidder shall be excluded from the award process and shall not receive a refund of any sums which the bidder has paid as a deposit under these Regulations, which shall (where not already forfeited) be forfeited together with any interest which has accrued on the deposit.

(4) After the deadline specified under paragraph (2), OFCOM shall determine each bidder's eligibility limit for the first principal stage round in accordance with regulation 16 and shall record each bidder's existing spectrum holdings in accordance with regulation 17.

Determination of a bidder's eligibility limit for the first principal stage round

16

(1) A bidder's eligibility limit for the first principal stage round shall be—

(a) where the amount which the bidder has on deposit (including the initial deposit and the additional deposit) is less than four million pounds, the number which is the amount of such deposit in pounds divided by one million;

(b) where the amount which the bidder has on deposit (including the initial deposit and the additional deposit) is equal to or more than four million pounds but less than four hundred and eighty four million pounds, the number (E) which is calculated in accordance with the formula set out in paragraph (2); and

(c) where the amount which the bidder has on deposit (including the initial deposit and the additional deposit) is equal to or more than four hundred and eighty four million pounds but less than one billion and eighty four million pounds, the number (F) which is calculated in accordance with the formula set out in paragraph (3); and

(d) where the amount which the bidder has on deposit (including the initial deposit and the additional deposit) is equal to or more than one billion and eighty four million pounds, fifty two.

(2) The formula is E= 4 + [(D - 4,000,000])/(20,000,000)], where “D” is the amount of the deposit in pounds.

(3) The formula is F = 28 + 4 x [(D - 484,000,000)/(100,000,000)], where “D” is the amount of the deposit.

(4) Where the number which results from the calculation in paragraphs (1)(a), to (1)(d) is not a whole number, the bidder's eligibility limit shall be that number rounded down to the nearest whole number.

(5) That number shall be expressed as a number of points.

CHAPTER 3 — Recording of existing spectrum holdings and overall bid constraints

Recording of existing spectrum holdings

17

(1) After the deadline specified in regulation 15(2), OFCOM shall, for each bidder, record the bidder's existing spectrum holdings.

(2) A bidder's existing spectrum holdings to be recorded are those which have been notified by that bidder under regulation 4(3)(a)(iii), as amended to take account of any notifications of subsequent changes to those spectrum holdings which may have been made under regulations 7(1), 8(2), 8(3) and 9.

(3) After the recording of spectrum holdings, the bidder and, in relation to the bidder, any person referred to in regulation 4(3)(a)(iii) may change its spectrum holdings but in relation to the award process—

(a) the bidder shall be subject to regulations 122 and 124 if they apply to that change; and

(b) the bidder's recorded spectrum holdings shall not be amended.

(4) If there is such a change, the bidder concerned must notify OFCOM of the change and deliver to OFCOM a revised version of the document provided under regulation 4(3)(a)(iii) which complies with that provision following the change.

Determination of overall bid constraints

18

(1) Before the first principal stage round OFCOM shall—

(a) determine for each bidder; and

(b) notify to each bidder an overall bid constraint.

(2) The overall bid constraint may be different for each bidder.

(3) The overall bid constraint shall be expressed as a quantity of frequencies (a number in MHz) and shall be calculated in accordance with paragraph (4).

(4) The number referred to in paragraph (3) shall be calculated in accordance with the formula (416 MHz – z) rounded down to the nearest multiple of 5 MHz, where z is the total in MHz of the bidder's recorded existing spectrum holdings.

(5) Where the number of MHz resulting from the calculation referred to in paragraph (4) is higher than 200 MHz, the number shall be 200 MHz and not that higher number.

(6) A bidder's overall bid constraint shall not change during the principal stage.

PART 4 — Award process

Principal stage, assignment stage and grant stage

19

(1) The process for the award of licences shall consist of the procedure set out in Part 5 (“principal stage”), the procedure set out in Parts 6, 7 and 8 (“assignment stage”) and the procedure set out in Part 9 (“grant stage”).

(2) During the principal stage, OFCOM shall determine the total number of 3.6 GHz lots, the total number of 700 MHz individual frequency lots, and the total number of 700 MHz paired frequency lots which each bidder wins, but not the particular numbered 3.6 GHz lots, particular numbered 700 MHz individual frequency lots and particular numbered 700 MHz paired frequency lots.

(3) Following completion of the principal stage, OFCOM shall determine the particular numbered 3.6 GHz lots, particular numbered 700 MHz individual frequency lots, and the particular numbered 700 MHz paired frequency lots that are to be assigned to the winning bidders in accordance with the procedure set out in the assignment stage.

(4) Following completion of the assignment stage, OFCOM shall grant licences authorising the use of the frequencies determined in accordance with the grant stage.

PART 5 — The principal stage

CHAPTER 1 — Principal stage rounds

Principal stage rounds

20

(1) During the principal stage, there shall be one or more principal stage rounds.

(2) A principal stage round shall begin and end at the times notified by OFCOM under regulation 45.

(3) The number of principal stage rounds shall be determined by OFCOM in accordance with regulation 23.

Principal stage form

21

(1) OFCOM shall provide each bidder in the principal stage with a principal stage form.

(2) Subject to paragraph (7), a bidder is not required to submit a principal stage form in respect of each principal stage round.

(3) Where a bidder chooses to complete a principal stage form in respect of a principal stage round, that bidder must, on the principal stage form—

(a) specify the number of principal stage bids for 3.6 GHz lots it wishes to make in that round;

(b) specify the number of principal stage bids for 700 MHz individual frequency lots it wishes to make in that round;

(d) except in the first principal stage round, indicate whether it wishes to carry forward its eligibility limit (as determined for that round) to the next round.

(4) A principal stage form submitted by a bidder in a round is a valid principal stage form if—

(a) the bidder has completed the form in accordance with paragraph (3);

(b) the bidder has submitted the form in accordance with regulation 50 or 51;

(d) the bidder has complied with regulation 37 in respect of the total frequencies associated with the form; and

(e) the bidder has complied with regulation 39 in respect of any request to carry forward its eligibility limit indicated on the form.

(5) A principal stage bid is a valid principal stage bid if it is specified on a valid principal stage form.

(6) Any request by a bidder to carry forward its eligibility limit is a valid request to carry forward its eligibility limit if it is indicated on a valid principal stage form.

(7) Any bidder which, in the first principal stage round, does not specify at least one valid principal stage bid shall be excluded from the award process and shall not receive a refund of any sums which the bidder has paid as a deposit under these Regulations, which shall (where not already forfeited) be forfeited together with any interest which has accrued on the deposit.

Principal stage bids

22

Each principal stage bid is a bid for the inclusion in a licence of one lot of a particular type at the round price for a lot of that type.

Number of principal stage rounds

23

(1) After the end of each principal stage round, OFCOM shall determine whether there was a round event in that round in accordance with paragraph (4).

(2) Where OFCOM determine that there was no round event in that principal stage round there shall be no further principal stage rounds, and OFCOM shall determine the winning principal stage bids in accordance with regulation 33.

(3) Where OFCOM determine that there was a round event in that principal stage round, there shall be another principal stage round.

(4) There was a round event in a principal stage round where—

(a) a bidder specified a valid principal stage bid in that round; or

(b) an eligibility event occurred in that round.

Round prices for the first principal stage round

24

For the first principal stage round—

(a) the round price for each 3.6 GHz lot shall be twenty million pounds;

(b) the round price for each 700 MHz individual frequency lot shall be one million pounds; and

Determination of round prices for subsequent principal stage rounds

25

(1) For each subsequent principal stage round—

(a) the round price for each 3.6 GHz lot shall be determined by OFCOM in accordance with regulation 26;

(b) the round price for each 700 MHz individual frequency lot shall be determined by OFCOM in accordance with regulation 27; and

(c) the round price for each 700 MHz paired frequency lot shall be determined by OFCOM in accordance with regulations 28.

(2) The round price shall be the same for each lot of the same type.

Round price for 3.6 GHz lots

26

(1) The round price for each 3.6 GHz lot shall be the same as it was for the most recent round, except where paragraph (3) applies.

(2) Where paragraph (3) applies, the round price for each 3.6 GHz lot shall be higher than it was for the most recent round.

(3) This paragraph applies where, after the end of the most recent round, OFCOM assigned standing high bid status to twenty four valid principal stage bids for 3.6 GHz lots at the round price of the most recent round.

Round price for 700 MHz individual frequency lots

27

(1) The round price for each 700 MHz individual frequency lot shall be the same as it was for the most recent round, except where paragraph (3) applies.

(2) Where paragraph (3) applies, the round price for each 700 MHz individual frequency lot shall be higher than it was for the most recent round.

(3) This paragraph applies where, after the end of the most recent round, OFCOM assigned standing high bid status to four valid principal stage bids for 700 MHz individual frequency lots at the round price of the most recent round.

Round price for 700 MHz paired frequency lots

28

(1) The round price for each 700 MHz paired frequency lot shall be the same as it was for the most recent round, except where paragraph (3) applies.

(2) Where paragraph (3) applies, the round price for each 700 MHz paired frequency lot shall be higher than it was for the most recent round.

(3) This paragraph applies where, after the end of the most recent round, OFCOM assigned standing high bid status to six valid principal stage bids for 700 MHz paired frequency lots at the round price of the most recent round.

CHAPTER 2 — Assignment of standing high bid status

Assignment of standing high bid status by OFCOM after the end of each principal stage round

29

(1) After the end of each principal stage round, OFCOM shall assign standing high bid status to valid principal stage bids for 3.6 GHz lots, valid principal stage bids for 700 MHz individual frequency lots and valid principal stage bids for 700 MHz paired frequency lots in accordance with paragraphs (2) and (3).

(2) OFCOM shall assign standing high bid status for each lot type separately.

(3) OFCOM shall assign standing high bid status by—

(a) first, identifying and ranking the bidders in accordance with regulation 30;

(b) second, identifying and ranking the bids made by those bidders in accordance with regulation 31; and

Process for assigning standing high bid status: ranking the bidders

30

(1) For each lot type separately, OFCOM shall identify the bidders that fall into one of the following three categories such that—

(a) the first category contains the bidders (if any) (“category one bidders”) which made valid principal stage bids for a lot of that type at the round price of the most recent round (whether made in the most recent round or in an earlier round);

(b) the second category contains the bidders (if any) (“category two bidders”) which made valid principal stage bids for lots of that type in the latest round in which the bidder submitted bids for lots of that type satisfying the following conditions—

(i) the bids were made at a round price which was lower than the round price of the most recent round; and

(ii) all of the bids were assigned standing high bid status by OFCOM after the end of the previous round; and

(c) the third category contains the only bidder (if any) (“category three bidder”) which made valid principal stage bids for lots of that type in the latest round in which the bidder submitted bids for lots of that type satisfying the following conditions—

(i) the bids were made at a round price which was lower than the round price of the most recent round; and

(ii) some but not all of the bids were assigned standing high bid status by OFCOM after the end of the previous round.

(2) For each lot type separately, OFCOM shall rank the bidders on a list (“bidder ranking list”) so that—

(a) category one bidders appear above category two bidders and above any category three bidder;

(b) category two bidders appear above any category three bidder; and

Process for assigning standing high bid status: ranking the bids

31

(1) For each lot type separately, OFCOM shall identify the relevant valid principal stage bids for each bidder included in the bidder ranking list.

(2) The relevant valid principal stage bids are—

(a) for category one bidders, all the valid principal stage bids for lots of that type made by the bidder in the latest round in which it submitted bids;

(b) for category two and category three bidders, all the valid principal stage bids for lots of that type made by the bidder which were assigned standing high bid status after the end of the previous round.

(3) For each lot type separately, OFCOM shall rank those bids on a list (“overall bid list”) so that all the relevant valid principal stage bids made by a bidder which is ranked higher on the bidder ranking list appear above the relevant valid principal stage bids made by a bidder which is ranked lower on the bidder ranking list.

Process for assigning standing high bid status: assigning standing high bid status to the bids

32

(1) For each lot type separately, OFCOM shall assign standing high bid status to bids in the overall bid list by giving such status to bids in the order in which they appear in the list, starting from the top of the list.

(2) For each lot type separately, OFCOM shall assign standing high bid status to bids until each bid in the overall bid list has been assigned standing high bid status or until the number of bids to which OFCOM has assigned standing high bid status is equal to the number of lots of that type which are available in the award process (whichever happens first).

CHAPTER 3 — Winning principal stage bids and determination of base price

Determination of the winning principal stage bids

33

(1) Where OFCOM have determined in accordance with regulation 23 that there shall be no further principal stage rounds, the principal stage bids with standing high bid status shall become winning principal stage bids if they are bids to which paragraph (2) applies.

(2) The bids to which this paragraph applies are—

(a) the principal stage bids for 3.6 GHz lots to which OFCOM assigned standing high bid status after the end of the final principal stage round;

(b) the principal stage bids for 700 MHz individual frequency lots to which OFCOM assigned standing high bid status after the end of the final principal stage round; and

(c) the principal stage bids for 700 MHz paired frequency lots to which OFCOM assigned standing high bid status after the end of the final principal stage round.

Determination of base price

34

(1) The base price for a 3.6 GHz lot for which a bidder made a bid that became a winning principal stage bid in accordance with regulation 33 (“3.6 GHz base price”) will be a sum equal to the round price at which the winning bidder made that winning principal stage bid.

(2) The base price for a 700 MHz individual frequency lot for which a bidder made a bid that became a winning principal stage bid in accordance with regulation 33 (“700 MHz individual frequency lot base price”) will be a sum equal to the round price at which the winning bidder made that winning principal stage bid.

(3) The base price for a 700 MHz paired frequency lot for which a bidder made a bid that became a winning principal stage bid in accordance with regulation 33 (“700 MHz paired frequency lot base price”) will be a sum equal to the round price at which the winning bidder made that winning principal stage bid.

Determination of total base price

35

(1) A reference to a winning bidder's “total 3.6 GHz base price” is a reference to that winning bidder's 3.6 GHz base price multiplied by the number of 3.6 GHz lots won by that bidder.

(2) A reference to a winning bidder's “total 700 MHz individual frequency lot base price” is a reference to that winning bidder's 700 MHz individual frequency lot base price multiplied by the number of 700 MHz individual frequency lots won by that bidder.

(3) A reference to a winning bidder's “total 700 MHz paired frequency lot base price” is a reference to that winning bidder's 700 MHz paired frequency lot base price multiplied by the number of 700 MHz paired frequency lots won by that bidder.

CHAPTER 4 — Constraints on principal stage bids

Maximum and minimum number of principal stage bids for 3.6 GHz lots, 700 MHz individual frequency lots and 700 MHz paired frequency lots

36

In any principal stage round—

(a) the number of principal stage bids for 3.6 GHz lots that a bidder may make shall not exceed twenty four and shall not be fewer than two;

(b) the number of principal stage bids for 700 MHz individual frequency lots that a bidder may make shall not exceed four; and

Overall bid constraint rule

37

(1) In addition to the limitations on bidding in regulation 36, in any principal stage round, the total frequencies associated with a bidder's principal stage form must not exceed the number of MHz for that bidder which is that bidder's overall bid constraint.

(2) The “total frequencies associated with a bidder's principal stage form” means, in relation to a bidder in a principal stage round, the total number of MHz which is the sum of A plus B plus C where—

(a) “A” is—

(i) where that bidder has specified on its principal stage form in that principal stage round that it wishes to make one or more principal stage bids for 3.6 GHz lots, the number of such bids multiplied by 5 MHz; or

(ii) where that bidder makes no new bids on its principal stage form in that principal stage round for 3.6 GHz lots—

(aa) the number of principal stage bids for 3.6 GHz lots made by that bidder which were assigned standing high bid status after the end of the most recent round, if any, multiplied by 5 MHz; and

(bb) if no such principal stage bids for 3.6 GHz lots made by that bidder were assigned standing high bid status after the end of the most recent round, zero;

(b) “B” is—

(i) where that bidder has specified on its principal stage form in that principal stage round that it wishes to make one or more principal stage bids for 700 MHz individual frequency lots, the number of such bids multiplied by 5 MHz; or

(ii) where that bidder makes no new bids on its principal stage form in that principal stage round for 700 MHz individual frequency lots—

(aa) the number of principal stage bids for 700 MHz individual frequency lots made by that bidder which were assigned standing high bid status after the end of the most recent round, if any, multiplied by 5 MHz; and

(bb) if no such principal stage bids for 700 MHz individual frequency lots made by that bidder were assigned standing high bid status after the end of the most recent round, zero; and

(i) where that bidder has specified on its principal stage form in that principal stage round that it wishes to make one or more principal stage bids for 700 MHz paired frequency lots, the number of such bids multiplied by 10 MHz; or

(ii) where that bidder makes no new bids on its principal stage form in that principal stage round for 700 MHz paired frequency lots—

(aa) the number of principal stage bids for 700 MHz paired frequency lots made by that bidder which were assigned standing high bid status after the end of the most recent round, if any, multiplied by 10 MHz; and

(bb) if no such principal stage bids for 700 MHz paired frequency lots made by that bidder were assigned standing high bid status after the end of the most recent round, zero.

Number of principal stage bids following assignment of standing high bid status

38

A bidder which made principal stage bids to which OFCOM assigned standing high bid status after the end of the most recent round must, if making bids for lots of the same type in the next round, specify on its principal stage form a number of bids for lots (of that type) which—

(a) is the same as or higher than the number of bids made by that bidder to which OFCOM assigned standing high bid status after the end of the most recent round, if the round price for lots of that type has increased from the most recent round; or

(b) is higher than the number of bids made by that bidder to which OFCOM assigned standing high bid status after the end of the most recent round, if the round price for lots of that type has not increased from the most recent round.

Request by a bidder to carry forward its eligibility limit

39

(1) In any principal stage round except the first one, a bidder may indicate on its principal stage form that it wishes to carry forward its eligibility limit (as determined for that round in accordance with regulation 41) to the next round if the conditions set out in paragraphs (2) to (4) are met.

(2) The first condition is that the bidder does not, in the current round, do any of the following—

(a) specify a valid principal stage bid for 3.6 GHz lots on its principal stage form;

(b) specify a valid principal stage bid for 700 MHz individual frequency lots on its principal stage form; or

(3) The second condition is that the number of eligibility points used by the bidder in relation to the bidder's principal stage bids to which OFCOM assigned standing high bid status after the end of the most recent round is lower than the bidder's eligibility limit for the current round.

(4) The third condition is that carrying forward the eligibility limit would comply with the limit on the number of eligibility events set out in regulation 43(3).

Eligibility rule

40

(1) The number of eligibility points used by a bidder in a principal stage round, calculated in accordance with regulation 42, may not exceed that bidder's eligibility limit for that round, calculated in accordance with regulation 41.

(2) In regulations 41 to 43, a round in relation to which the number of eligibility points used is calculated is referred to as the “current round”.

Determination of a bidder's eligibility limit

41

(1) A bidder's eligibility limit shall be the number determined by OFCOM—

(a) for the first principal stage round, in accordance with regulation 16; and

(b) for the second and each subsequent principal stage round, in accordance with paragraphs (2) and (3).

(2) In relation to the second and each subsequent principal stage round, the bidder's eligibility limit shall be equal to the number of eligibility points used by the bidder in the most recent round, except where an eligibility event occurred in relation to that bidder in the most recent round.

(3) In relation to each principal stage round where an eligibility event occurred in relation to a bidder in the most recent round, the bidder's eligibility limit shall be the same as its eligibility limit for the most recent round.

Eligibility points used by a bidder

42

(1) The number of eligibility points used by a bidder in the current round shall be the number equal to the sum of the 3.6 GHz lot number calculated in accordance with paragraph (2), the 700 MHz individual frequency lot number calculated in accordance with paragraph (3) and the 700 MHz paired frequency lot number calculated in accordance with paragraph (4).

(2) The 3.6 GHz lot number referred to in paragraph (1) is—

(a) where the bidder has specified a number of principal stage bids for 3.6 GHz lots in the current round, the number of bids for 3.6 GHz lots in that round specified on that bidder's principal stage form;

(b) where the bidder has not specified any principal stage bids for 3.6 GHz lots in the current round, the number of bids for 3.6 GHz lots made by that bidder to which OFCOM assigned standing high bid status after the end of the most recent round; and

(c) where the bidder has not specified any principal stage bids for 3.6 GHz lots in the current round and OFCOM did not assign standing high bid status after the end of the most recent round to any bids for 3.6 GHz lots made by that bidder, zero.

(3) The 700 MHz individual frequency lot number referred to in paragraph (1) is—

(a) where the bidder has specified a number of principal stage bids for 700 MHz individual frequency lots in the current round, the number of bids for 700 MHz individual frequency lots in that round specified on that bidder's principal stage form;

(b) where the bidder has not specified any principal stage bids for 700 MHz individual frequency lots in the current round, the number of principal stage bids for 700 MHz individual frequency lots made by that bidder to which OFCOM assigned standing high bid status after the end of the most recent round; and

(c) where the bidder has not specified any principal stage bids for 700 MHz individual frequency lots in the current round and OFCOM did not assign standing high bid status after the end of the most recent round to any bids for 700 MHz individual lots made by that bidder, zero.

(4) The 700 MHz paired frequency lot number referred to in paragraph (1) is—

(a) where the bidder has specified a number of principal stage bids for 700 MHz paired frequency lots in the current round, the number of bids for 700 MHz paired frequency lots in that round specified on that bidder's principal stage form multiplied by four;

(b) where the bidder has not specified any principal stage bids for 700 MHz paired frequency lots in the current round, the number of principal stage bids for 700 MHz paired frequency lots made by that bidder to which OFCOM assigned standing high bid status after the end of the most recent round multiplied by four; and

(c) where the bidder has not specified any principal stage bids for 700 MHz paired frequency lots in the current round and OFCOM did not assign standing high bid status after the end of the most recent round to any bids for 700 MHz paired lots made by that bidder, zero.

Eligibility event

43

(1) An eligibility event has occurred in a round where—

(a) a bidder indicated a valid request to carry forward its eligibility limit in the most recent round on its principal stage form; or

(b) the conditions set out in paragraph (2) apply.

(2) The conditions are that—

(a) the bidder did not, in the most recent round, submit a valid principal stage form;

(b) the number of eligibility points used by the bidder in relation to the bidder's principal stage bids to which OFCOM assigned standing high bid status after the end of the previous round is lower than the bidder's eligibility limit for the most recent round; and

(3) For each bidder, an eligibility event may not occur on more than three occasions.

(4) After the end of each principal stage round, except after the end of the final principal stage round, OFCOM will notify each bidder of the remaining number of occasions on which an eligibility event may occur in respect of that bidder.

Deposit constraint on bidding

44

(1) Where, after the end of a principal stage round, OFCOM has notified a bidder under regulation 54(5) that it has not complied with the requirement to pay a further sum as a deposit, that bidder—

(a) may not submit a principal stage form in the next principal stage round nor in any subsequent principal stage rounds; and

(b) may not submit an assignment stage form in the assignment stage round, may not participate in any negotiation period and shall be deemed to have made a valid assignment stage bid with a value of zero pounds for each of its assignment stage options.

(2) Such a bidder is not excluded from the award process for that reason.

(3) Any principal stage bids made by that bidder to which OFCOM has assigned standing high bid status after the end of the final principal stage round will become winning principal stage bids in accordance with regulation 33.

CHAPTER 5 — Information released during and following the principal stage

Notice to be given to bidders before each principal stage round

45

Before the start of each principal stage round, OFCOM shall notify each bidder of—

(a) the date on which, and the times on that date within which, the principal stage round will take place;

(b) the round price for—

(i) a 3.6 GHz lot;

(ii) a 700 MHz individual frequency lot; and

(iii) a 700 MHz paired frequency lot;

(d) the bidder's eligibility limit for that principal stage round.

Notification of information to bidders after the end of each principal stage round

46

(1) After the end of each principal stage round, except the final principal stage round, and before the start of the next principal stage round, OFCOM shall notify each bidder of—

(a) for each lot type, the number of valid principal stage bids made by the bidder in the most recent round;

(b) for each lot type, the number of valid principal stage bids made by the bidder to which OFCOM has assigned standing high bid status after the end of the most recent round;

(c) for each lot type for which the bidder made valid principal stage bids to which OFCOM assigned standing high bid status, the round price of the round when those principal stage bids were made;

(d) the remaining number of occasions on which an eligibility event may occur in respect of that bidder;

(e) the bidder's eligibility limit for the next principal stage round;

(f) the bidder's financial exposure after the end of the most recent round;

(g) for 3.6 GHz lots, the amount in MHz which is the smallest strictly positive whole multiple of twenty which is greater than the excess demand as determined in accordance with paragraph (2);

(h) for 700 MHz individual frequency lots, the amount in MHz which is the smallest strictly positive whole multiple of ten which is greater than the excess demand as determined in accordance with paragraph (5); and

(i) for 700 MHz paired frequency lots, the amount in MHz which is the smallest strictly positive whole multiple of twenty which is greater than the excess demand as determined in accordance with paragraph (6).

(2) The excess demand for 3.6 GHz lots (ed3.6 GHz) is the amount in MHz which is calculated in accordance with the formula set out in paragraph (3).

(3) The formula is ed3.6 GHz = (e + f – 24) x 5, where—

(a) “e” is the total number of valid principal stage bids for 3.6 GHz lots made by all bidders in the most recent round; and

(b) “f” is the total number of bids for 3.6 GHz lots with standing high bid status immediately prior to the most recent round made by all bidders who have not made bids for 3.6 GHz lots in the most recent round.

(4) The excess demand for 700 MHz individual frequency lots (ed700 MHz individual) is the amount in MHz which is calculated in accordance with the formula set out in paragraph (5).

(5) The formula is ed700 MHz individual = (g + h – 4) x 5 where—

(a) “g” is the total number of valid principal stage bids for 700 MHz individual frequency lots made by all bidders in the most recent round; and

(b) “h” is the total number of valid bids for 700 MHz individual frequency lots with standing high bid status immediately prior to the most recent round made by all bidders who have not made bids for 700 MHz individual frequency lots in the most recent round.

(6) The excess demand for 700 MHz paired frequency lots (ed700 MHz paired) is the amount in MHz which is calculated in accordance with the formula set out in paragraph (7).

(7) The formula is ed700 MHz paired= (i + j – 6) x 10 where—

(a) “i” is the total number of valid principal stage bids for 700 MHz paired frequency lots made by all bidders in the most recent round; and

(b) “j” is the total number of valid bids for 700 MHz paired frequency lots with standing high bid status immediately prior to the most recent round made by all bidders who have not made bids for 700 MHz paired frequency lots in the most recent round.

Publication of information at the end of each day during the principal stage

47

After the end of the latest principal stage round to take place on any given day, OFCOM shall publish on their website, in relation to that latest principal stage round—

(a) the round price for—

(i) a 3.6 GHz lot;

(ii) a 700 MHz individual frequency lot; and

(iii) a 700 MHz paired frequency lot;

(b) for the 3.6 GHz lot type, the amount in MHz which is the smallest strictly positive whole multiple of twenty which is greater than the excess demand;

(c) for the 700 MHz individual frequency lot type, the amount in MHz which is the smallest strictly positive whole multiple of ten which is greater than the excess demand; and

(d) for the 700 MHz paired frequency lot type, the amount in MHz which is the smallest strictly positive whole multiple of twenty which is greater than the excess demand.

Notification of results of the principal stage to bidders

48

After the end of the final principal stage round, and after the determination of the winning principal stage bids and the determination of the base price for each winning principal stage bid, OFCOM shall notify each bidder of—

(a) the end of the principal stage;

(b) the names of the winning bidders, and in respect of each of them—

(i) the number of 3.6 GHz lots won, the 3.6 GHz base price;

(ii) the number of 700 MHz individual frequency lots won, the 700 MHz individual frequency lot base price; and

(iii) the number of 700 MHz paired frequency lots won, the 700 MHz paired frequency lot base price; and

(c) the number of 3.6 GHz lots, the number of 700 MHz individual frequency lots and the number of 700 MHz paired frequency lots not won by any bidder.

Publication of results of the principal stage

49

After the notification given in accordance with regulation 48, OFCOM shall publish on their website—

(a) the names of the winning bidders, and in respect of each of them—

(i) the number of 3.6 GHz lots won, the 3.6 GHz base price and the total 3.6 GHz base price;

(ii) the number of 700 MHz individual frequency lots won, the 700 MHz individual frequency lot base price and the total 700 MHz individual frequency lot base price; and

(iii) the number of 700 MHz paired frequency lots won, the 700 MHz paired frequency lot base price and the total 700 MHz paired frequency lot base price; and

(b) the number of 3.6 GHz lots and the number of 700 MHz individual frequency lots and the number of 700 MHz paired frequency lots not won by any bidder.

CHAPTER 6 — Procedure for principal stage

Submission of principal stage form to OFCOM

50

(1) A bidder must submit the completed principal stage form to OFCOM by using the electronic auction system, except as provided for in regulation 51.

(2) The completed principal stage form must be received by OFCOM by the time notified by OFCOM under regulation 45(a) as the end of the principal stage round.

Alternative method for submission of principal stage form

51

(1) Where OFCOM are satisfied that a bidder is unable to submit a principal stage form by using the electronic auction system because of technical failure (or an event or circumstance with similar effect on the bidder's ability to use the electronic auction system), OFCOM shall notify the bidder of an alternative method of submitting the principal stage form and any requirements relating to the authentication of communications made by means of the alternative method.

(2) The bidder must submit the principal stage form by means of the alternative method and must comply with any requirements which have been notified to it under paragraph (1) relating to the authentication of communications.

Incomplete or defective principal stage form

52

(1) Where, due to the manner of completion, a principal stage form is incomplete or defective but OFCOM believe that they can ascertain the bidder's intention in relation to the matters set out in regulation 21(3), OFCOM shall ask the bidder to confirm in a notice to OFCOM by a deadline specified by OFCOM that OFCOM have correctly ascertained the bidder's intention in relation to its decisions on the principal stage form.

(2) Where the bidder confirms in a notice given to OFCOM by the deadline which is signed by two authorised persons that OFCOM have correctly ascertained the bidder's intention, the principal stage form in its entirety shall be valid and be accepted by OFCOM on that basis.

(3) Where the bidder does not give such confirmation, the principal stage form in its entirety shall be invalid and rejected by OFCOM.

Notification that principal stage form is not valid

53

Where a bidder submits a principal stage form that is not a valid principal stage form during a principal stage round, OFCOM shall, after the end of that principal stage round, notify the bidder of that fact and shall give the reasons why the principal stage form is not a valid principal stage form.

CHAPTER 7 — Deposits during and following the principal stage

Deposits during the principal stage

54

(1) Where, after the end of any principal stage round, the amount a bidder has on deposit with OFCOM for the purposes of the award process is less than the bidder's financial exposure, OFCOM may, having regard to the desirability of securing an efficient outcome to the principal stage, notify the bidder that it is required to pay a further sum in pounds as a deposit.

(2) A bidder's financial exposure after the end of a principal stage round shall be the amount in pounds which is equal to the sum of—

(a) the number of that bidder's principal stage bids for 3.6 GHz lots to which OFCOM assigned standing high bid status after the end of that principal stage round, multiplied by the round price at which those bids were made;

(b) the number of that bidder's principal stage bids for 700 MHz individual frequency lots to which OFCOM assigned standing high bid status after the end of that principal stage round, multiplied by the round price at which those bids were made; and

(c) the number of that bidder's principal stage bids for 700 MHz paired frequency lots to which OFCOM assigned standing high bid status after the end of that principal stage round, multiplied by the round price at which those bids were made.

(3) The further sum shall be an amount determined by OFCOM such that the total amount that the bidder is required to have on deposit is at most the amount of the bidder's highest financial exposure after the end of any of the previous principal stage rounds before OFCOM gave notice to the bidder under paragraph (1).

(4) Any such sum must be paid into OFCOM's bank account with accompanying information which identifies the bidder, by a deadline specified by OFCOM.

(5) Where a bidder does not satisfy the requirements set out in paragraph (4), OFCOM shall notify the bidder of that fact.

Required final principal stage deposit

55

(1) After the final principal stage round, a further sum in pounds must be paid into OFCOM's bank account with accompanying information which identifies the bidder, by a deadline specified by OFCOM (“required final principal stage deposit”).

(2) In respect of any bidder, the required final principal stage deposit shall be an amount such that the total amount that the bidder has on deposit is not less than the amount which is the sum of—

(a) that bidder's total 3.6 GHz base price;

(b) that bidder's total 700 MHz individual frequency lot base price; and

(3) Where a bidder does not satisfy the requirements set out in paragraph (1)—

(a) OFCOM shall notify the bidder; and

(b) the bidder shall not be excluded from the award process, but may not make assignment stage bids, may not participate in any negotiation period and will be deemed to have made valid assignment stage bids with a value of zero pounds for its assignment stage options.

PART 6 — Assignment stage

CHAPTER 1 — Overview

No assignment stage if there are no winning principal stage bidders

56

Where there are no winning bidders following completion of the principal stage there shall be no assignment stage and no licences shall be granted.

Assignment stage process

57

Where there is one winning bidder, or more than one winning bidder, following completion of the principal stage, there shall be one assignment stage round and OFCOM shall determine the assignment of lots in light of that round (and in light of the negotiation period, if any).

CHAPTER 2 — Assignment of lots of a particular type without bidding

Assignment of numbered 3.6 GHz lots without bidding

58

Where there is only one winning bidder for all of the 3.6 GHz lots, OFCOM shall assign all of the 3.6 GHz lots to that winning bidder.

Assignment of 700 MHz individual frequency lots without bidding.

59

Where there is only one winning bidder for all of the 700 MHz individual frequency lots, OFCOM shall assign all of the 700 MHz individual frequency lots to that winning bidder.

Assignment of 700 MHz paired frequency lots without bidding

60

Where there is only one winning bidder for all of the 700 MHz paired frequency lots, OFCOM shall assign all of the 700 MHz paired frequency lots to that winning bidder.

CHAPTER 3 — Assignment of lots of a particular type by means of a bidding process (and negotiation period, if any)

Assignment of 3.6 GHz lots by bidding

61

Except where regulation 58 applies, the particular numbered 3.6 GHz lots that are to be assigned to the winning bidders for 3.6 GHz lots shall be determined by—

(a) bidding in the assignment stage round in accordance with the procedure set out in regulations 68 to 70; and

(b) the outcome of the negotiation period (if any).

Assignment of numbered 700 MHz individual frequency lots by bidding

62

Except where regulation 59 applies, the particular numbered 700 MHz individual frequency lots that are to be assigned to the winning bidder or bidders for the 700 MHz individual frequency lots shall be determined by bidding in the assignment stage round in accordance with the procedure set out in regulations 71 to 73.

Assignment of numbered 700 MHz paired frequency lots by bidding

63

Except where regulation 60 applies, the particular numbered 700 MHz paired frequency lots that are to be assigned to the winning bidder or bidders for the 700 MHz paired frequency lots shall be determined by bidding in the assignment stage round in accordance with the procedure set out in regulations 74 to 76.

Assignment stage round

64

(1) Only the following bidders may bid in the assignment stage round—

(a) winning bidders for 3.6 GHz lots;

(b) winning bidders for 700 MHz individual frequency lots; and

(2) The assignment stage round shall begin and end at the times notified by OFCOM under regulation 77.

CHAPTER 4 — Assignment stage form

Assignment stage form

65

(1) OFCOM shall provide each winning bidder with an assignment stage form.

(2) To bid in the assignment stage round, a bidder must specify on the assignment stage form—

(a) the bidder's 3.6 GHz assignment stage bids, if any, in accordance with regulation 70;

(b) the bidder's 700 MHz individual frequency lot assignment stage bids, if any, in accordance with regulation 73; and

Valid assignment stage form

66

An assignment stage form is a valid assignment stage form if—

(a) the bidder has complied with regulations 70(1) and 70(2), regulations 73(1) and 73(2) or regulations 76(1) and 76(2) in respect of all assignment stage bids specified on the form; and

(b) the bidder has submitted the form in accordance with regulation 78 or 79.

Notification that an assignment stage form is not valid

67

Where a bidder submits an assignment stage form which is not a valid assignment stage form, OFCOM shall, after the end of the assignment stage round, notify the bidder of that fact and shall give the reasons why the assignment stage form is not a valid assignment stage form.

CHAPTER 5 — 3.6 GHz lot assignment stage bidding

Bidding for numbered 3.6 GHz lots in the assignment stage

68

(1) A 3.6 GHz assignment stage bid shall be a bid for a licence that authorises the use of frequencies corresponding to the particular numbered 3.6 GHz lots comprised in a block of numbered 3.6 GHz lots.

(2) OFCOM shall determine which blocks of numbered 3.6 GHz lots a bidder may bid for, and notify that bidder of its determination.

(3) The list of possible blocks of numbered 3.6 GHz lots provided to each bidder may be different for each bidder.

(4) The list shall be known as the “3.6 GHz assignment stage option list” and each block of 3.6 GHz lots in that list shall be known as a “3.6 GHz assignment stage option”.

Preparing a 3.6 GHz assignment stage option list for each bidder

69

(1) OFCOM shall determine which 3.6 GHz assignment stage options shall be included in the 3.6 GHz assignment stage option list for each bidder which is eligible to bid.

(2) A bidder's 3.6 GHz assignment stage options shall be each of those blocks of numbered 3.6 GHz lots which satisfy all of the following conditions—

(a) the number of 3.6 GHz lots contained in the block is equal to the number of that bidder's winning principal stage bids for 3.6 GHz lots;

(b) if that bidder were assigned the 3.6 GHz lots contained in the block the following two conditions would be satisfied—

(i) each other bidder could be assigned 3.6 GHz lots contained in a block that, in respect of that other bidder's winning principal stage bids for 3.6 GHz lots, satisfies the condition in sub-paragraph (a);

(ii) the 3.6 GHz lots not assigned to that bidder or any other bidder (the “leftover 3.6 GHz lots”) would form a single block of numbered 3.6 GHz lots; and

(c) if a bidder made winning principal stage bids for fewer than five 3.6 GHz lots and that bidder were to be assigned the 3.6 GHz lots contained in the block, at least one of the following five conditions would be satisfied—

(i) the block would include either 3.6 GHz frequency lot 1 or 3.6 GHz lot 24;

(ii) the block would be adjacent to a block of fewer than five 3.6 GHz lots which would include 3.6 GHz lot 1 or 3.6 GHz lot 24;

(iii) the block would be adjacent to the block of leftover 3.6 GHz lots which includes 3.6 GHz lot 1 or 3.6 GHz lot 24;

(iv) the block would be adjacent to a block of fewer than five 3.6 GHz lots which would itself be adjacent to a block in a series of other contiguous blocks of fewer than five 3.6 GHz lots, provided that at least one block in this series would include 3.6 GHz lot 1 or 3.6 GHz lot 24; or

(v) the block would be adjacent to a block in a series of contiguous blocks (which comprises the block of leftover 3.6 GHz lots and blocks containing fewer than five 3.6 GHz lots) provided that at least one block in this series would include 3.6 GHz lot 1 or 3.6 GHz lot 24.

3.6 GHz assignment stage bids

70

(1) In order to bid for a 3.6 GHz assignment stage option, a bidder must, on the assignment stage form, specify an amount in whole thousands of pounds that it is willing to pay, in addition to the total 3.6 GHz base price for that bidder's winning principal stage bids for 3.6 GHz lots, for a licence that authorises the use of the frequencies corresponding to the block of numbered 3.6 GHz lots that is the 3.6 GHz assignment stage option.

(2) A bidder may make no more than one 3.6 GHz assignment stage bid for each 3.6 GHz assignment stage option.

(3) A bidder is not required to make a 3.6 GHz assignment stage bid.

(4) A 3.6 GHz assignment stage bid is a valid 3.6 GHz assignment stage bid if—

(a) the bid is specified on a valid assignment stage form; and

(b) the bidder has paid the full sum of the required assignment stage deposit by the deadline specified by OFCOM.

(5) Where a bidder does not make a valid 3.6 GHz assignment stage bid for a 3.6 GHz assignment stage option that bidder will be deemed to have made a valid 3.6 GHz assignment stage bid with a value of zero pounds for that 3.6 GHz assignment stage option.

CHAPTER 6 — 700 MHz individual frequency lot assignment stage bidding

Bidding for numbered 700 MHz individual frequency lots in the assignment stage

71

(1) A 700 MHz individual frequency lot assignment stage bid shall be a bid for a licence that authorises the use of frequencies corresponding to the particular numbered 700 MHz individual frequency lots comprised in a block of numbered 700 MHz individual frequency lots.

(2) OFCOM shall determine which blocks of numbered 700 MHz individual frequency lots a bidder may bid for, and notify that bidder of its determination.

(3) The list of possible blocks of numbered 700 MHz individual frequency lots provided to each bidder may be different for each bidder.

(4) The list shall be known as the “700 MHz individual frequency lot assignment stage option list” and each block of 700 MHz individual frequency lots in that list shall be known as a “700 MHz individual frequency lot assignment stage option”.

Preparing a 700 MHz individual frequency lot assignment stage option list for each bidder

72

(1) OFCOM shall determine which 700 MHz individual frequency lot assignment stage options shall be included in the 700 MHz individual frequency lot assignment stage option list for each bidder which is eligible to bid.

(2) A bidder's 700 MHz individual frequency lot assignment stage options shall be each of those blocks of numbered 700 MHz individual frequency lots which satisfy the following conditions—

(a) the number of 700 MHz individual frequency lots contained in the block is equal to the number of that bidder's winning principal stage bids for 700 MHz individual frequency lots; and

(b) if that bidder were assigned the 700 MHz individual frequency lots contained in the block the following conditions would be satisfied—

(i) each other bidder could be assigned 700 MHz individual frequency lots contained in a block that, in respect of that other bidder's winning principal stage bids for 700 MHz individual frequency lots, satisfies the condition in sub-paragraph (a); and

(ii) the 700 MHz individual frequency lots not assigned to that bidder or any other bidder would form a single block of numbered 700 MHz individual frequency lots.

700 MHz individual frequency lot assignment stage bids

73

(1) In order to bid for a 700 MHz individual frequency lot assignment stage option, a bidder must, on the assignment stage form, specify an amount in whole thousands of pounds that it is willing to pay, in addition to the total 700 MHz individual frequency lot base price for that bidder's winning principal stage bids for 700 MHz individual frequency lots, for a licence that authorises the use of the frequencies corresponding to the block of numbered 700 MHz individual frequency lots that is the 700 MHz individual frequency lot assignment stage option.

(2) A bidder may make no more than one 700 MHz individual frequency lot assignment stage bid for each 700 MHz individual frequency lot assignment stage option.

(3) A bidder is not required to make a 700 MHz individual frequency lot assignment stage bid.

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