The Wireless Telegraphy (Licence Award) Regulations 2012

• Citation: S.I. 2012/2817
• Sections: 155

Section 1 Citation, commencement, and extent

(1) These Regulations may be cited as the Wireless Telegraphy (Licence Award) Regulations 2012 and shall come into force on 23rd November 2012.

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

Section 2 Interpretation

(1) In these Regulations—

“1800 MHz band” has the meaning given in regulation 18(6) ;

“additional price” has the meaning given in regulation 106 (1);

“adjusted demand” shall be construed in accordance with regulation 30 ;

“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; and

each person in respect of whom the applicant has delivered to OFCOM a completed document in the form set out in Schedule 5;

“assignment stage” has the meaning given in regulation 17(1) ;

“assignment stage bid” has the meaning given in regulation 88(2) ;

“assignment stage bid form” has the meaning given in regulation 93(1) ;

“assignment stage option” has the meaning given in regulation 88(5);

“assignment stage option list” has the meaning given in regulation 88(5);

“assignment stage round” has the meaning given in regulation 72(2) ;

“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;

“base price” has the meaning given in regulation 68 ;

“bidder” means an applicant which has qualified to bid in the award process and which has not withdrawn from the award process on or before the last day for withdrawal;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 6(3) ;

“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;

“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, or

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

“end of round time” has the meaning given in regulation 53(1) ;

“excess demand” shall be construed in accordance with regulation 29 ;

“existing spectrum holdings” has the meaning given in regulation 4(6) ;

“final principal stage deposit” has the meaning given in regulation 69(a)(i)(cc) ;

“GHz” means gigahertz;

“grant stage” has the meaning given in regulation 17(1) ;

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

“key bid” shall be construed in accordance with regulation 31 ;

“last day for withdrawal” has the meaning given in regulation 12(1) ;

“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 to be determined in accordance with the procedure set out in Part 4 of 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; or

any 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; or

the right to appoint or remove a majority of the applicant’s or bidder’s board of directors;

“MHz” means megahertz;

“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 internet website;

“opt-in bid” has the meaning given in regulation 20(1) ;

“opt-in bid form” has the meaning given in regulation 20(2) ;

“opt-in round” has the meaning given in regulation 17(2) ;

“opt-in selection” has the meaning given in regulation 19(5) ;

“opted-in bidder” has the meaning given in regulation 21(3) ;

“permissible bid selection” has the meaning given in regulation 22(5) ;

“permissible bid selection list” has the meaning given in regulation 22(5) ;

“pounds” means pounds sterling;

“primary bid” has the meaning given in regulation 25(3) ;

“primary bid form” has the meaning given in regulation 25(6) ;

“primary bid rounds” has the meaning given in regulation 17(2) ;

“principal stage” has the meaning given in regulation 17(1) ;

“principal stage bid” means an opt-in bid, a primary bid, or a supplementary bid;

“recorded spectrum holdings” has the meaning given in regulation 16(2);

“round” means a period of time specified by OFCOM during which bidders may make bids in accordance with the procedure set out in Part 4 of these Regulations;

“round price” shall be construed in accordance with regulation 25 ;

“selection of lots” has the meaning given in regulation 17(4) ;

“spectrum cap rule” shall be construed in accordance with regulation 24 ;

“supplementary bid” has the meaning given in regulation 42 ;

“supplementary bids form” has the meaning given in regulation 43(1) ;

“supplementary bids round” has the meaning given in regulation 17(2) ;

“valid assignment stage bid” shall be construed in accordance with regulation 95 ;

“valid opt-in bid” shall be construed in accordance with regulation 21 ;

“valid primary bid” has the meaning given in regulation 26 ;

“valid principal stage bid” means a valid opt-in bid, a valid primary bid, or a valid supplementary bid;

“valid supplementary bid” has the meaning given in regulation 44 ;

“winning assignment stage bid” shall be construed in accordance with regulation 103 , 104 or 105 as the case may require;

“winning bidder” means a bidder that submitted a winning principal stage bid; and

“winning principal stage bid” shall be construed in accordance with regulation 67 .

(2) A reference in these Regulations to—

(a) an “800 MHz paired frequency lot”;

(b) a “2.6 GHz paired frequency lot”;

(c) a “2.6 GHz individual frequency lot”;

(d) the “800 MHz coverage obligation lot”;

(e) a “2.6 GHz concurrent low power 10 MHz lot”;

(f) a “2.6 GHz concurrent low power 20 MHz lot”;

shall be construed in accordance with Schedule 1.

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

(4) A reference in these Regulations to a numbered 800 MHz paired frequency lot, a numbered 2.6 GHz paired frequency lot, a numbered 2.6 GHz individual frequency lot or a “block” of such lots shall be construed in accordance with Schedule 1.

(5) A reference in these Regulations to a number of “eligibility points” associated with lots shall be construed in accordance with Schedule 6.

Section 3 Applications for the grant of a licence

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

Section 4 Application

(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 specified by OFCOM for receipt of applications, deliver to OFCOM at Riverside House, 2a Southwark Bridge Road, London SE1 9HA within the times on that day specified by OFCOM a sealed envelope containing—

(i) a document containing the application information required by, and the warranty set out in, Schedule 4, 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 5 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;

(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 any such third party;

(gg) any person in whom a person referred to in sub-paragraph (ff) has a material interest; and

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

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

(4) If the applicant wishes to bid in the opt-in round it must deliver to OFCOM in the sealed envelope a statement in writing that it wishes to participate in the opt-in round.

(5) OFCOM shall publish the day, times and deadline on their internet website.

(6) “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 3; and

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

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

(a) the wireless telegraphy licence number; and

(b) the frequencies.

Section 5 Notification of names of applicants and associates

(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 when 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.

Section 6 Recording of applicant group members

(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 regulation 4(3)(a)(i) , (ii) and (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.

Section 7 Subsequent changes to bidder groups

(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 10(2), 112 and 114 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 revised versions of the documents provided under regulation 4(3)(a)(i) and (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 5 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.

Section 8 Changes to existing spectrum holdings before recording

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 spectrum holdings are recorded under regulation 16, 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.

Section 9 Fitness to hold a licence

(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.

Section 10 Qualification to participate in the award process

(1) Each applicant—

(a) which was not disqualified under regulation 9 , 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 9 ,

shall be qualified to participate in the award process.

(2) An applicant which has a member of its bidder group which is also a member of the bidder group of another applicant which was not disqualified under regulation 9 shall not be qualified to participate in the award process.

(3) Where an applicant is not qualified to participate in the award process OFCOM shall inform that applicant of that fact but that applicant’s initial deposit shall not be forfeited for that reason.

Section 11 Publication of names of qualified applicants

OFCOM shall notify each applicant qualified to participate of the name of each other applicant who is so qualified, and the names of their associates, and shall publish the names of all applicants who are so qualified on OFCOM’s internet website.

Section 12 Withdrawal of an application

(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 on OFCOM’s internet 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.

Section 13 Determination of number of bidders

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

(2) 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 12 , their initial deposit (where such deposit has not been forfeited) but not any interest which has accrued on the deposit.

(3) Where there are one or more bidders, OFCOM shall grant licences in accordance with the procedure set out in Part 4 of these Regulations.

(4) OFCOM shall publish the names of the bidders on OFCOM’s internet website.

Section 14 Additional deposit before the opt-in round and the first primary bid round

(1) In addition to the initial deposit, a bidder may pay an additional sum in pounds as a deposit which shall be taken into account by OFCOM in accordance with regulation 15 for the purpose of calculating the bidder’s eligibility limit for the opt-in round (if the bidder has stated that it wishes to bid in that round) and for the first primary bid round.

(2) A bidder wishing to pay such an additional sum must, by a deadline specified by OFCOM, pay the additional sum into OFCOM’s bank account by a same day electronic transfer with accompanying information which identifies the bidder.

Section 15 Determination of bidder’s eligibility limit for the opt-in round and first primary bid round

(1) After the deadline specified in regulation 14(2) , OFCOM shall determine each bidder’s eligibility limit for the opt-in round (if the bidder has stated that it wishes to bid in that round) and for the first primary bid round in accordance with the requirements of this regulation.

(2) OFCOM shall divide by one hundred thousand the total amount of pounds that the bidder has on deposit (including the initial deposit and any additional sum paid under regulation 14 ).

(3) Where the number that results from the calculation in paragraph (2) is not a whole number, that number shall be rounded down to the nearest whole number.

(4) The eligibility limit shall be that whole number.

(5) Where a bidder’s eligibility limit calculated in accordance with this regulation is less than one point, 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.

Section 16 Recording of spectrum holdings

(1) After the deadline specified in regulation 14(2) OFCOM shall, for each bidder, record the existing spectrum holdings which have been notified by that bidder under regulation 4(3)(a)(iii) , taking account of any notifications of subsequent changes to those spectrum holdings which may have been made under regulations 6(1) , 7(2) , 7(3) or 8.

(2) The spectrum holdings so recorded are that bidder’s “recorded spectrum holdings”.

(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 existing spectrum holdings but in relation to the award process—

(a) the bidder shall be subject to regulations 112 and 114 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.

Section 17 Principal stage, assignment stage and grant stage

(1) The process for the award of licences shall consist of the procedure set out in Chapters 2 to 9 of this Part (“principal stage”), the procedure set out in Chapters 10 to 14 of this Part (“assignment stage”) and the procedure set out in Chapter 15 of this Part (“grant stage”).

(2) During the principal stage there shall be one round for the submission of opt-in bids (“opt-in round”), one or more rounds for the submission of primary bids (“primary bid rounds”) and one round for the submission of supplementary bids (“supplementary bids round”).

(3) A bid made during the principal stage shall be a bid for a licence which authorises the use of frequencies corresponding to a selection of lots chosen by the bidder.

(4) A selection of lots means one or more lots of the same or different types, where the number of lots of each type included in the selection is specified but not any particular numbered lot which falls within that type.

(5) After the conclusion of the supplementary bids round, OFCOM shall determine which of the bids made in the principal stage are winning principal stage bids.

(6) Following completion of the principal stage, the specific frequencies that are to be assigned to the winning bidders shall be determined by OFCOM in accordance with the procedure set out in the assignment stage.

(7) Licences authorising the use of the frequencies so determined shall be granted by OFCOM in accordance with the grant stage.

Section 18 Opt-in round

(1) Only bidders satisfying each of the four requirements in this regulation may bid in the opt-in round.

(2) The first requirement is that the bidder must have stated at the time it submitted its application in accordance with regulation 4(4) that it wished to participate in the opt-in round.

(3) The second requirement is that the bidder’s recorded spectrum holdings must not include any frequencies within the following frequency bands—

(a) 880.1 to 914.9 MHz;

(b) 925.1 to 959.9 MHz.

(4) The third requirement is that the bidder’s recorded spectrum holdings must not include more than thirty megahertz of frequencies within the 1800 MHz band.

(5) The fourth requirement is that the bidder’s eligibility limit must be—

(a) at least 6750 points if the bidder’s recorded spectrum holdings do not include any frequencies in the 1800 MHz band; or

(b) at least 2250 points if the bidder’s recorded spectrum holdings do include frequencies in the 1800 MHz band.

(6) The “1800 MHz band” means—

(a) 1710.1 to 1781.7 MHz; and

(b) 1805.1 to 1876.7 MHz.

Section 19 Opt-in selections

(1) The selections of lots that each bidder eligible to bid in the opt-in round may bid for in the opt-in round shall be the selections of lots included in the list or lists in Schedule 2 that apply to that bidder in accordance with this regulation.

(2) List A and List B in Schedule 2 apply to bidders with recorded spectrum holdings that do not include any frequencies in the 1800 MHz band.

(3) List C and List D in Schedule 2 apply to bidders with—

(a) recorded spectrum holdings that include frequencies in the 1800 MHz band; and

(b) an eligibility limit of at least 4500 points.

(4) List C in Schedule 2 applies to bidders with—

(a) recorded spectrum holdings that include frequencies in the 1800 MHz band; and

(b) an eligibility limit of less than 4500 points.

(5) Each of the different selections of lots included in a list in Schedule 2 is an “opt-in selection”.

Section 20 Opt-in bids

(1) A bid made during the opt-in round (“opt-in bid”) shall be for a selection of lots which matches an opt-in selection for that bidder.

(2) In order to make an opt-in bid a bidder must, on a form provided to the bidder by OFCOM (“opt-in bid form”), specify the amount in whole pounds which it is willing to pay for a licence which authorises the use of frequencies corresponding to the selection of lots.

(3) The amount so specified for the selection of lots must be the sum set out as being the opt-in price for that opt-in selection in Schedule 2.

(4) If a bidder to which List A and List B apply in accordance with regulation 19(2) wishes to bid in the opt-in round, it must submit—

(a) one opt-in bid for the first opt-in selection in List A and one opt-in bid for the second opt-in selection in List A; or

(b) one opt-in bid for the first opt-in selection in List B, one opt-in bid for the second opt-in selection in List B, one opt-in bid for the third opt-in selection in List B and one opt-in bid for the fourth opt-in selection in List B.

(5) If a bidder to which List C and List D apply in accordance with regulation 19(3) wishes to bid in the opt-in round, it must submit—

(a) one opt-in bid for the first opt-in selection in List C and one opt-in bid for the second opt-in selection in List C; or

(b) one opt-in bid for the first opt-in selection in List D, one opt-in bid for the second opt-in selection in List D and one opt-in bid for the third opt-in selection in List D.

(6) If a bidder to which List C applies in accordance with regulation 19(4) wishes to bid in the opt-in round, it must submit one opt-in bid for the first opt-in selection in List C and one opt-in bid for the second opt-in selection in List C.

Section 21 Valid opt-in bids

(1) If a bidder is eligible to bid in the opt-in round and all of that bidder’s opt-in bids are made in accordance with regulations 20 and 46 , then each of that bidder’s opt-in bids is a valid opt-in bid.

(2) If a bidder is not eligible to bid in the opt-in round or if any of that bidder’s opt-in bids are not made in accordance with regulations 20 and 46 , then none of that bidder’s opt-in bids is a valid opt-in bid.

(3) A bidder which has made a valid opt-in bid is an “opted-in bidder”.

Section 22 Permissible bid selections

(1) OFCOM shall, for the primary bid rounds and supplementary bids round, determine which selections of lots each bidder may bid for.

(2) Each selection of lots determined by OFCOM shall consist of lots of one or more of the following types—

(a) 800 MHz paired frequency lots;

(b) 2.6 GHz paired frequency lots;

(c) 2.6 GHz individual frequency lots;

(d) the 800 MHz coverage obligation lot;

(e) 2.6 GHz concurrent low power 10 MHz lots;

(f) 2.6 GHz concurrent low power 20 MHz lots.

(3) For each selection of lots, OFCOM shall specify how many lots of each type (if any) are included in the selection.

(4) The list of possible selections of lots provided to each bidder may be different for each bidder.

(5) The list is the “permissible bid selection list” and each selection of lots in that list is a “permissible bid selection”.

(6) The permissible bid selection list for each bidder shall not change during the primary bid rounds and supplementary bids round.

Section 23 Preparing a permissible bid selection list for each bidder

(1) In determining the permissible bid selection list for each bidder OFCOM shall include each possible selection of lots which—

(a) would, if it were to be included in a licence granted to that bidder, comply with the spectrum cap rule in respect of that bidder;

(b) does not include more than one 2.6 GHz concurrent low power 10 MHz lot;

(c) does not include more than one 2.6 GHz concurrent low power 20 MHz lot;

(d) if it includes one 2.6 GHz concurrent low power 10 MHz lot, does not also include a 2.6 GHz concurrent low power 20 MHz lot;

(e) if it includes one 2.6 GHz concurrent low power 20 MHz lot, does not also include a 2.6 GHz concurrent low power 10 MHz lot;

(f) if it includes one 2.6 GHz concurrent low power 10 MHz lot, does not include more than twelve 2.6 GHz paired frequency lots;

(g) if it includes one 2.6 GHz concurrent low power 20 MHz lot, does not include more than ten 2.6 GHz paired frequency lots;

(h) if it includes any 2.6 GHz individual frequency lots, includes at least two such lots;

(i) does not include more lots of a type than the number of lots available of that type;

(j) has a number of eligibility points associated with it which is not more than the number that OFCOM have determined under regulation 15 to be the bidder’s eligibility limit for the first primary bid round;

(k) meets the rule set out in paragraph (2) if that paragraph applies; and

(l) meets the rule set out in paragraph (3) if that paragraph applies.

(2) If there is only one opted-in bidder, each permissible bid selection on that bidder’s permissible bid selection list must include (in addition to any other lots which are included) all of the lots selected in a valid opt-in bid made by that bidder.

(3) If there is at least one opted-in bidder, the permissible bid selections for each bidder must all be such that if that bidder were to make a valid principal stage bid for any one of those selections, that bid could, when taken together with others (which were also valid principal stage bids), form a combination which meets the requirements (in regulation 67(4) ) which must be satisfied for a combination of principal stage bids to be a valid combination of principal stage bids.

(4) The number of eligibility points associated with a selection of lots shall be the number equal to the total of the eligibility points associated with the lots included in the selection of lots.

Section 24 The spectrum cap rule

(1) The spectrum cap rule consists of the two requirements on spectrum holdings.

(2) The first requirement is that a bidder’s post-award spectrum holdings may not amount to total rights of use of more than—

(a) two hundred and ten megahertz of frequencies in the frequency bands set out in List A in Schedule 3, if the bidder’s post-award spectrum holdings do not include rights of use of frequencies in the frequency band 2570 MHz to 2615 MHz; or

(b) two hundred and fifteen megahertz of frequencies in the frequency bands set out in List A in Schedule 3, if the bidder’s post-award spectrum holdings do include rights of use of frequencies in the frequency band 2570 MHz to 2615 MHz.

(3) The second requirement is that a bidder’s post-award spectrum holdings may not amount to total rights of use of more than fifty five megahertz of frequencies in the frequency bands set out in List B in Schedule 3.

(4) “Post-award spectrum holdings”, in relation to a bidder, means—

(a) the bidder’s recorded spectrum holdings; and

(b) rights of use of frequencies that the bidder acquires under this award process.

Section 25 Primary bids

(1) A primary bid must be for a selection of lots which matches a permissible bid selection for that bidder.

(2) For each primary bid round there shall be a round price for each type of lot, which is the price at which each lot of that type is offered to bidders during that primary bid round.

(3) A bid made during a primary bid round (“primary bid”) shall be at an amount in whole pounds being the total amount of the round prices in that primary bid round for the lots included in the selection of lots specified in the bid.

(4) The round prices for the first primary bid round are set out in regulation 32 .

(5) The round prices for each subsequent primary bid round shall be determined by OFCOM in accordance with regulation 33 .

(6) In order to make a primary bid a bidder must, on a form provided to the bidder by OFCOM (“primary bid form”), specify—

(a) the number of 800 MHz paired frequency lots it wishes to be included in a licence at the round price for those lots;

(b) the number of 2.6 GHz paired frequency lots it wishes to be included in a licence at the round price for those lots;

(c) the number of 2.6 GHz individual frequency lots it wishes to be included in a licence at the round price for those lots;

(d) if it wishes the 800 MHz coverage obligation lot to be included in a licence at the round price for that lot;

(e) if it wishes a 2.6 GHz concurrent low power 10 MHz lot to be included in a licence at the round price for those lots; and

(f) if it wishes a 2.6 GHz concurrent low power 20 MHz lot to be included in a licence at the round price for those lots.

(7) A bidder must not submit more than one primary bid in each primary bid round.

(8) The selection of lots specified in a primary bid made by a bidder must be such that the total number of eligibility points associated with the primary bid does not exceed the bidder’s eligibility limit for that primary bid round (determined in accordance with regulation 15 or 40 and notified to the bidder in accordance with regulation 52(1)(c) ).

(9) The number of eligibility points associated with a primary bid shall be the number equal to the total of the eligibility points associated with the lots included in the selection of lots specified in the primary bid.

Section 26 Valid primary bids

A primary bid is a valid primary bid if the bidder complies with the provisions of regulations 25 and 54 in respect of that primary bid.

Section 27 Requirement for a valid primary bid in the first primary bid round

Any bidder which does not submit a valid primary bid in the first primary bid round having an associated eligibility of at least one eligibility point 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.

Section 28 Number of primary bid rounds

(1) After each primary bid round OFCOM shall determine if there is excess demand in accordance with regulation 29 .

(2) Where OFCOM have determined that there is no excess demand there shall be no further primary bid rounds but there shall be a supplementary bids round.

(3) Where there is excess demand there shall be another primary bid round, unless OFCOM determine that they are satisfied that it is unlikely that the information that would be made available to bidders following any such further primary bid rounds would change—

(a) the winning principal stage bids in accordance with regulation 67 ; or

(b) the base price payable by a winning bidder in accordance with regulation 68 .

(4) If OFCOM determine under paragraph (3) that it is unlikely that the information that would be made available to bidders would change either of these things there shall be no further primary bid rounds but there shall be a supplementary bids round.

Section 29 Determination of excess demand

(1) There is excess demand if any of the following conditions is satisfied—

(a) the adjusted demand for any type of lot is greater than the number of lots of that type that are available in the award process;

(b) the number produced by adding together the adjusted demand for 2.6 GHz concurrent low power 10 MHz lots and the adjusted demand for 2.6 GHz concurrent low power 20 MHz lots is greater than ten;

(c) the adjusted demand for 2.6 GHz concurrent low power 10 MHz lots is greater than zero and the adjusted demand for 2.6 GHz paired frequency lots is greater than twelve; or

(d) the adjusted demand for 2.6 GHz concurrent low power 20 MHz lots is greater than zero and the adjusted demand for 2.6 GHz paired frequency lots is greater than ten.

(2) OFCOM shall determine the adjusted demand for types of lots in accordance with regulation 30 .

Section 30 Determination of adjusted demand

(1) This paragraph applies where—

(a) there are no valid opt-in bids; or

(b) at least one opted-in bidder submitted a valid primary bid in the most recent primary bid round, and that bid was for a selection of lots which included (in addition to any other lots which were included) all of the lots comprised in one of that bidder’s valid opt-in bids.

(2) Where paragraph (1) applies, the adjusted demand for a type of lot is the total number of lots of that type selected in the valid primary bids submitted in the most recent primary bid round.

(3) Where paragraph (1) does not apply, the adjusted demand for a type of lot is the number determined in accordance with paragraph (4) .

(4) The number is the total of—

(a) the number of lots of that type selected in the key bid, and

(b) the number of lots of that type selected in the valid primary bids submitted in the most recent primary bid round, but not including the valid primary bid (if any) of the bidder which submitted the key bid.

(5) The key bid shall be identified by OFCOM in accordance with regulation 31 .

Section 31 Identifying the key bid

(1) The key bid is the bid which has the lowest value of n calculated in accordance with paragraph (2) out of all of the bids which satisfy—

(a) the requirement in paragraph (3) (“the first requirement”); and

(b) the requirement in paragraph (4) (“the second requirement”).

(2) For each such bid, the value of n is the difference (if any) between—

(a) the total amount of the round prices in the most recent primary bid round for the lots included in the bid; and

(b) the amount of the bid.

(3) The first requirement is that the bid must be a valid opt-in bid or a valid primary bid made by an opted-in bidder.

(4) The second requirement is that if the bid is a valid primary bid it must be for a selection of lots which includes (in addition to any other lots which are included) all of the lots comprised in one of the valid opt-in bids made by that bidder.

(5) Where there is more than one bid for which the value of n is lowest (“tied n bids”), the key bid shall be determined in accordance with the order of precedence set out in paragraph (6) .

(6) Tied n bids with a lesser value of a prevail over tied n bids with a greater value of a , where a is calculated in accordance with paragraph (7) .

(7) For each tied n bid, the value of a is the total amount of the round prices in the most recent primary bid round for the lots included in the tied n bid, less the total amount of the round prices (in the most recent primary bid round) for those lots included in the tied n bid which were also included in the valid primary bid (if any) submitted in the most recent primary bid round by the bidder which submitted the tied n bid.

(8) Where there is more than one tied n bid for which the value of a is lowest (“tied a bids”), the key bid shall be determined in accordance with the order of precedence set out in paragraph (9) .

(9) Tied a bids with a lesser value of b prevail over tied a bids with a greater value of b , where b is calculated in accordance with paragraph (10) .

(10) For each tied a bid, the value of b is the total amount of the round prices in the most recent primary bid round for the lots included in the valid primary bid (if any) submitted in the most recent primary bid round by the bidder which submitted the tied a bid, less the total amount of the round prices (in the most recent primary bid round) for those lots included in the valid primary bid which were also included in the tied a bid.

(11) Where a bidder which submitted a tied a bid did not submit a valid primary bid in the most recent primary bid round, the value of b in relation to that tied a bid shall be zero.

(12) Where there is more than one tied a bid for which the value of b is lowest (“tied b bids”), OFCOM shall employ a method of random selection from amongst those tied b bids to identify the key bid.

Section 32 Round prices for the first primary bid round

For the first primary bid round, the round price for—

(a) each 800 MHz paired frequency lot shall be two hundred and twenty five million pounds;

(b) each 2.6 GHz paired frequency lot shall be fifteen million pounds;

(c) each 2.6 GHz individual frequency lot shall be one hundred thousand pounds;

(d) the 800 MHz coverage obligation lot shall be two hundred and fifty million pounds;

(e) each 2.6 GHz concurrent low power 10 MHz lot shall be three million pounds; and

(f) each 2.6 GHz concurrent low power 20 MHz lot shall be six million pounds.

Section 33 Determination of round prices for subsequent primary bid rounds

(1) For each subsequent primary bid round, the round price for each type of lot shall be determined by OFCOM.

(2) The round price for each 800 MHz paired frequency lot shall be determined in accordance with regulation 34 .

(3) The round price for each 2.6 GHz paired frequency lot shall be determined in accordance with regulation 35 .

(4) The round price for each 2.6 GHz individual frequency lot shall be determined in accordance with regulation 36 .

(5) The round price for the 800 MHz coverage obligation lot shall be determined in accordance with regulation 37 .

(6) The round price for each 2.6 GHz concurrent low power 10 MHz lot shall be determined in accordance with regulation 38

(7) The round price for each 2.6 GHz concurrent low power 20 MHz lot shall be determined in accordance with regulation 39 .

Section 34 Round price for 800 MHz paired frequency lots

(1) The round price for each 800 MHz paired frequency lot shall be the same as it was for the previous primary bid round except where paragraph (3) applies.

(2) Where paragraph (3) applies the round price shall be higher than it was for the previous primary bid round, but not more than twice the amount of the round price for the previous primary bid round.

(3) This paragraph applies where the adjusted demand for 800 MHz paired frequency lots in the previous primary bid round is greater than four.

Section 35 Round price for 2.6 GHz paired frequency lots

(1) The round price for each 2.6 GHz paired frequency lot shall be the same as it was for the previous primary bid round except where any of paragraphs (3) , (4) or (5) apply.

(2) Where any of paragraphs (3) , (4) or (5) apply the round price shall be higher than it was for the previous primary bid round, but not more than twice the amount of the round price for the previous primary bid round.

(3) This paragraph applies where the adjusted demand for 2.6 GHz paired frequency lots in the previous primary bid round is greater than fourteen.

(4) This paragraph applies where—

(a) the adjusted demand for 2.6 GHz concurrent low power 10 MHz lots in the previous round is greater than zero; and

(b) the adjusted demand for 2.6 GHz paired frequency lots in the previous round is greater than twelve.

(5) This paragraph applies where—

(a) the adjusted demand for 2.6 GHz concurrent low power 20 MHz lots in the previous round is greater than zero; and

(b) the adjusted demand for 2.6 GHz paired frequency lots in the previous round is greater than ten.

Section 36 Round price for 2.6 GHz individual frequency lots

(1) The round price for each 2.6 GHz individual frequency lot shall be the same as it was for the previous primary bid round except where paragraph (3) applies.

(2) Where paragraph (3) applies the round price shall be higher than it was for the previous primary bid round, but not more than twice the amount of the round price for the previous primary bid round.

(3) This paragraph applies where the adjusted demand for 2.6 GHz individual frequency lots in the previous primary bid round is greater than nine.

Section 37 Round price for the 800 MHz coverage obligation lot

(1) The round price for the 800 MHz coverage obligation lot shall be the same as it was for the previous primary bid round except where paragraph (3) applies.

(2) Where paragraph (3) applies the round price shall be higher than it was for the previous primary bid round, but not more than twice the amount of the round price for the previous primary bid round.

(3) This paragraph applies where the adjusted demand for the 800 MHz coverage obligation lot in the previous primary bid round is greater than one.

Section 38 Round price for 2.6 GHz concurrent low power 10 MHz lots

(1) The round price for each 2.6 GHz concurrent low power 10 MHz lot shall be the same as it was for the previous primary bid round except where paragraph (5) or (6) applies.

(2) Where paragraph (5) applies, but not paragraph (6) , the round price shall be higher than it was for the previous primary bid round but not more than the upper 10 MHz limit.

(3) Where paragraph (6) applies, but not paragraph (5) , the round price shall not be lower than it was for the previous primary bid round, and shall be—

(a) not less than the lower 10 MHz limit, and

(b) not more than the upper 10 MHz limit,

subject to paragraph (7) .

(4) Where paragraph (5) and paragraph (6) both apply, the round price shall be higher than it was for the previous primary bid round, and shall be—

(a) not less than the lower 10 MHz limit, and

(b) not more than the upper 10 MHz limit,

subject to paragraph (7) .

(5) This paragraph applies where the number produced by adding together the adjusted demand for 2.6 GHz concurrent low power 10 MHz lots in the previous round and the adjusted demand for 2.6 GHz concurrent low power 20 MHz lots in the previous round is greater than ten.

(6) This paragraph applies where the adjusted demand for 2.6 GHz paired frequency lots in the previous round is greater than twelve.

(7) In a case where the lower 10 MHz limit is greater than the upper 10 MHz limit, the upper 10 MHz limit shall be disregarded and the round price shall be an amount equal to the lower 10 MHz limit.

(8) In this regulation—

“upper 10 MHz limit” means twice the amount of the round price for 2.6 GHz concurrent low power 10 MHz lots for the previous round; and

“lower 10 MHz limit” means one fifth of the amount that OFCOM have determined to be the round price for 2.6 GHz paired frequency lots for the round in respect of which OFCOM is determining the round price.

Section 39 Round price for 2.6 GHz concurrent low power 20 MHz lots

(1) The round price for each 2.6 GHz concurrent low power 20 MHz lot shall be the same as it was for the previous primary bid round except where paragraph (5) or (6) applies.

(2) Where paragraph (5) applies, but not paragraph (6) , the round price shall be higher than it was for the previous primary bid round but not more than the upper 20 MHz limit.

(3) Where paragraph (6) applies, but not paragraph (5) , the round price shall not be lower than it was for the previous primary bid round, and shall be—

(a) not less than the lower 20 MHz limit, and

(b) not more than the upper 20 MHz limit,

subject to paragraph (7) .

(4) Where paragraph (5) and paragraph (6) both apply, the round price shall be higher than it was for the previous primary bid round, and shall be—

(a) not less than the lower 20 MHz limit, and

(b) not more than the upper 20 MHz limit,

subject to paragraph (7) .

(5) This paragraph applies where the number produced by adding together the adjusted demand for 2.6 GHz concurrent low power 10 MHz lots in the previous round and the adjusted demand for 2.6 GHz concurrent low power 20 MHz lots in the previous round is greater than ten.

(6) This paragraph applies where the adjusted demand for 2.6 GHz paired frequency lots in the previous round is greater than 10.

(7) In a case where the lower 20 MHz limit is greater than the upper 20 MHz limit, the upper 20 MHz limit shall be disregarded and the round price shall be an amount equal to the lower 20 MHz limit.

(8) In this regulation—

(a) “upper 20 MHz limit” means twice the amount of the round price for 2.6 GHz concurrent low power 20 MHz lots for the previous round; and

(b) “lower 20 MHz limit” means the amount produced by adding together—

(i) the amount that OFCOM have determined to be the round price for 2.6 GHz concurrent low power 10 MHz lots for the round in respect of which OFCOM is determining the round price; and

(ii) one fifth of the amount that OFCOM have determined to be the round price for 2.6 GHz paired frequency lots for that round.

Section 40 Bidders’ eligibility limit for second and subsequent primary bid rounds

Before the second primary bid round and before each subsequent primary bid round OFCOM shall determine an eligibility limit for each bidder for that primary bid round in accordance with regulation 41 .

Section 41 Determination of bidders’ eligibility limit for second and subsequent primary bid rounds

(1) Where a bidder makes a valid primary bid in a primary bid round, OFCOM shall determine the bidder’s eligibility limit for the next primary bid round by calculating the number of eligibility points associated with that valid primary bid.

(2) The number of eligibility points associated with a valid primary bid shall be the number equal to the total of the eligibility points associated with the lots included in the selection specified in that valid primary bid.

(3) The bidder’s eligibility limit shall be the number equal to the number of eligibility points associated with that valid primary bid.

(4) Where a bidder does not make a valid primary bid in a primary bid round, the bidder’s eligibility limit for the next primary bid round shall be zero.

(5) Where regulation 59(4) applies, a bidder’s eligibility limit for the next primary bid round shall be zero, notwithstanding any determination of an eligibility limit under paragraphs (1) to (4).

Section 42 Supplementary bid selection

A bid made during the supplementary bids round (“supplementary bid”) shall be a bid for a selection of lots which matches a permissible bid selection for that bidder.

Section 43 Supplementary bids

(1) In order to make a supplementary bid a bidder must, on a form provided to the bidder by OFCOM (“supplementary bids form”), specify—

(a) the number of 800 MHz paired frequency lots it wishes to be included in a licence;

(b) the number of 2.6 GHz paired frequency lots it wishes to be included in a licence;

(c) the number of 2.6 GHz individual frequency lots it wishes to be included in a licence;

(d) if it wishes the 800 MHz coverage obligation lot to be included in a licence;

(e) if it wishes a 2.6 GHz concurrent low power 10 MHz lot to be included in a licence;

(f) if it wishes a 2.6 GHz concurrent low power 20 MHz lot to be included in a licence; and

(g) the amount in whole thousands of pounds that it is willing to pay for a licence which authorises the use of frequencies corresponding to the lots that are selected.

(2) The selection of lots specified in a supplementary bid made by a bidder must be such that the number of eligibility points associated with the supplementary bid in accordance with paragraph (3) does not exceed the bidder’s eligibility limit for the first primary bid round.

(3) The number of eligibility points associated with a supplementary bid shall be the number equal to the total of the eligibility points associated with the lots included in the selection of lots specified in that supplementary bid.

(4) The selection of lots specified in a supplementary bid made by a bidder may be the same as or different from the selection of lots specified in any opt-in bid or any primary bid made by that bidder.

(5) The amount of the supplementary bid shall be determined by the bidder, subject to the restrictions in paragraph (6) .

(6) The restrictions are—

(a) the amount of the supplementary bid must not be less than the total amount of the round prices in the first primary bid round for the lots included in the selection of lots specified in that bid;

(b) where the supplementary bid is for a selection of lots in respect of which the bidder has also made a primary bid, the amount of the supplementary bid must not be less than the amount of the highest primary bid made by the bidder for that selection of lots; and

(c) where—

(i) the bidder did not make a valid primary bid in the final primary bid round, or

(ii) the supplementary bid is for a selection of lots that is different from the selection of lots specified in the valid primary bid made by the bidder in the final primary bid round,

the amount of the supplementary bid must not be greater than the amount “ C ” determined in accordance with paragraph (7) .

(7) The amount “ C ” referred to in paragraph (6)(c) shall be calculated in accordance with the formula—

where—

“ R P ” is the total amount of the round prices in the primary bid round referred to in paragraph (9) for the selection of lots specified in the supplementary bid;

“ B ” is the amount determined in accordance with paragraph (8) ; and

“ P ” is, where the bidder made a valid primary bid in the round referred to in paragraph (9) , the amount of that valid primary bid, and is otherwise zero.

(8) The amount of B is—

(a) where the bidder made a valid primary bid in the round referred to in paragraph (9) , the higher of—

(i) the amount of the highest valid opt-in bid (if any) or valid primary bid made by the bidder for the same selection of lots as was specified in that valid primary bid; and

(ii) the amount of the supplementary bid (if any) for the same selection of lots as was specified in that valid primary bid; or

(b) where the bidder did not make a valid primary bid in the round referred to in paragraph (9) , zero.

(9) The primary bid round referred to is the latest primary bid round in which a primary bid made by the bidder for the selection of lots specified in the supplementary bid could have satisfied the restriction set out in regulation 25(8) .

(10) A bidder may submit any number of supplementary bids in the supplementary bids round, up to a maximum of four thousand supplementary bids.

(11) A bidder must submit all of its supplementary bids on the same supplementary bids form.

(12) A bidder may not submit more than one supplementary bid for any particular selection of lots.

(13) A bidder is not required to submit a supplementary bid.

Section 44 Valid supplementary bids

A supplementary bid is a valid supplementary bid if the bidder complies with regulations 42 , 43 and 61 in respect of that supplementary bid.

Section 45 Notice to be given to bidders before the opt-in round

Before the start of the opt-in round, OFCOM shall notify each bidder of the date on which, and the times on that date within which, the opt-in round will take place.

Section 46 Submission of opt-in bid form to OFCOM

(1) A bidder must submit the completed opt-in bid form to OFCOM by using the electronic auction system, except as provided for in regulation 47 .

(2) Except as provided for in regulation 48 , the completed opt-in bid form must be received by OFCOM within the times notified to bidders under regulation 45 .

Section 47 Alternative method for submission of opt-in bid form

(1) Where OFCOM are satisfied that a bidder is unable to submit an opt-in bid 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 opt-in bid form and any requirements relating to the authentication of communications made by means of the alternative method.

(2) The bidder must submit the opt-in bid 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.

Section 48 Extension to opt-in round

(1) Where—

(a) OFCOM have not received a completed opt-in bid form from a bidder by the time notified to bidders under regulation 45 as the end of the opt-in round, and

(b) paragraph (2) applies,

the time by which the bidder’s completed opt-in bid form must be received by OFCOM shall be the time sixty minutes after the time notified to bidders under regulation 45 as the end of the opt-in round.

(2) This paragraph applies where OFCOM are satisfied that circumstances existed which were beyond the bidder’s control which had the effect that the bidder could not submit its opt-in bid form so that it was received by OFCOM on time.

Section 49 Incomplete or defective opt-in bid form

(1) Where, due to the manner of completion, an opt-in bid form is incomplete or defective but OFCOM believe that they can ascertain the bidder’s intention in relation to the making of opt-in bids, 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 the making of opt-in bids.

(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 opt-in bid form in its entirety shall be accepted by OFCOM on that basis.

(3) Where the bidder does not give such confirmation, the opt-in bid form in its entirety shall be rejected by OFCOM and the opt-in bids submitted on the opt-in bid form shall not be valid opt-in bids.

Section 50 Notification that opt-in bid not valid

Where a bidder submits an opt-in bid that is not a valid opt-in bid, OFCOM shall, after the end of the opt-in round, notify the bidder of that fact and shall give the reasons why the bid is not a valid opt-in bid.