The auction of the 3.4GHz radio frequency spectrum appears unlikely to deliver broadband wireless services any time soon, a situation for which the government, and specifically the Radiocommunications Agency (RA), will shoulder most of the blame.
Some of the criticism will be merited, but you can't help having some sympathy for the government, because many factors, not all within its control, are preventing the provision of fixed wireless broadband services in the UK.
The RA will evaluate the bids for 3.4GHz licences in the week beginning 26 May, and it will be interesting to see which of the 15 regional and metropolitan licences are more popular with bidders, and whether those bids are deemed to be legal under competition law.
The telecoms industry is divided about the way fixed wireless links will actually be used. Vendors of wireless equipment say that the only services to be successful in other countries, such as the US, have been set up in rural areas where alternative broadband technologies, such as cable and DSL, are unavailable.
But others in the telecoms industry believe that fixed wireless will mainly provide a low-cost alternative to expensive leased lines and private virtual circuits (PVCs) in metropolitan areas, rather than rural locations.
In metropolitan areas, carriers would only have to put up a few transmitters to reach a large number of potential business and consumer customers.
The opposite is true in rural areas, where carriers would have to invest in many more transmitters to reach a smaller number of potential customers.
Consequently, many simply won't be able to make any business case for the provision of fixed wireless services outside the UK's major towns and cities. And even if they can, charges would have to be higher than those in cities, to enable the carriers to recoup their costs and have some hope of future profitability.
It should be remembered that the RA was lambasted for the burden it placed on successful bidders in the auction of licences to provide fixed wireless services in the 28GHz radio spectrum in 2001. Then, the RA was criticised for strict requirements for investment in infrastructure, and service rollouts. That auction met a lukewarm response from carriers and service providers, resulting in unsold licences and a failure to launch commercial 28GHz fixed wireless services even by firms that did invest.
Having relaxed its requirements, it seems the RA has still failed to attract bids from the major carriers and service providers. Perhaps some of them feel they make enough money from existing wired services and do not want wireless services to take revenues away from their already lucrative DSL, cable and leased-line businesses.
There may also be a lack of faith in the ability of wireless technology to deliver reliable connections over long distances. Wireless signals encounter interference from obstacles such as hills and the weather; and the building of transmitters with clear or almost-clear line of sight to customers can be expensive, and planning permission can be hard to obtain.
The time when branch offices and teleworkers will be able to replace 56kbit/s dial-up links with something faster seems no closer than it was before the auctions.
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