The Wireless Telegraphy (Licence Award) Regulations 2018

• Citation: S.I. 2018/86
• Sections: 134

Section 1 Citation, commencement, and extent

(1) These Regulations may be cited as the Wireless Telegraphy (Licence Award) Regulations 2018 and shall come into force on 31st January 2018.

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

Section 2 Interpretation

(1) In these Regulations—

“ 2.3 GHz additional price ” has the meaning given in regulation 76;

“ 2.3 GHz assignment stage bid ” shall be construed in accordance with regulation 72(1);

“ 2.3 GHz assignment stage option ” has the meaning given in regulation 72(4);

“ 2.3 GHz assignment stage option list ” has the meaning given in regulation 72(4);

“ 2.3 GHz base price A ” has the meaning given in regulation 41(1);

“ 2.3 GHz base price B ” has the meaning given in regulation 41(3);

“ 2.3 GHz bid limit ” shall be construed in accordance with regulation 20;

“ 2.3 GHz licence ” has the meaning given in regulation 91(a);

“ 2.3 GHz refusal payment ” shall be construed in accordance with regulation 103;

“ 2.3 GHz winning option ” has the meaning given in regulation 99(1);

“ 2.3 GHz withdrawn lot licence ” has the meaning given in regulation 91(b);

“ 3.4 GHz additional price ” has the meaning given in regulation 84;

“ 3.4 GHz assignment stage bid ” shall be construed in accordance with regulation 77(1);

“ 3.4 GHz assignment stage option ” has the meaning given in regulation 77(4);

“ 3.4 GHz assignment stage option list ” has the meaning given in regulation 77(4);

“ 3.4 GHz base price A ” has the meaning given in regulation 41(2);

“ 3.4 GHz base price B ” has the meaning given in regulation 41(4);

“ 3.4 GHz licence ” has the meaning given in regulation 91(c);

“ 3.4 GHz minimum requirement ” means the number of 3.4 GHz lots selected by a bidder (if any) as its minimum requirement in the application submitted by that bidder to OFCOM in accordance with regulation 4(3)(a)(i);

“ 3.4 GHz refusal payment ” shall be construed in accordance with regulation 103;

“ 3.4 GHz winning option ” has the meaning given in regulation 100(2);

“ 3.4 GHz withdrawn lot licence ” has the meaning given in regulation 91(d);

“ additional 3.4 GHz lot ” shall be construed in accordance with regulation 78(2)(a);

“ additional deposit ” has the meaning given in regulation 17(1);

“ additional price ” means the 2.3 GHz additional price or the 3.4 GHz additional price;

“ 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 3;

“ assignment stage ” has the meaning given in regulation 22;

“ assignment stage bid ” means a 2.3 GHz assignment stage bid or a 3.4 GHz assignment stage bid;

“ assignment stage form ” shall be construed in accordance with regulation 71;

“ assignment stage option ” means a 2.3 GHz assignment stage option or a 3.4 GHz assignment stage option;

“ assignment stage round ” shall be construed in accordance with regulation 68;

“ 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 9;

“ bidder ranking list ” has the meaning given in regulation 34(2);

“ category one bidders ” has the meaning given in regulation 34(1)(a);

“ category two bidders ” has the meaning given in regulation 34(1)(b);

“ category three bidder ” has the meaning given in regulation 34(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 49 to 52 where the meaning in regulation 49 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; 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 event ” shall be construed in accordance with regulation 52;

“ 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 51;

“ excess demand ” shall be construed in accordance with regulation 55(2);

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

“ existing immediately useable spectrum holdings ” has the meaning given in regulation 5(2);

“ existing overall spectrum holdings ” has the meaning given in regulation 5(3);

“ financial exposure ” shall be construed in accordance with regulation 63;

“ GHz ” means gigahertz;

“ grant stage ” has the meaning given in regulation 22;

“ initial deposit ” shall be construed in accordance with regulation 4;

“ last day for withdrawal ” has the meaning given in regulation 15(1);

“ leftover 3.4 GHz lots ” has the meaning given in regulation 78(2)(b)(ii);

“ 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 2.3 GHz lots or 3.4 GHz 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; 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;

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

“ 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 35(3);

“ overall bid constraint ” shall be construed in accordance with regulation 21;

“ pounds ” means pounds sterling;

“ pre-existing licence ” means the licence with number 1111442 which authorises the establishment, installation and use of wireless telegraphy stations and wireless telegraphy apparatus in the frequency ranges 3480-3500 MHz and 3580-3600 MHz held by UK Broadband Limited;

“ pre-existing licence holder ” means UK Broadband Limited (a company with company registration number 04713634);

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

“ principal stage ” has the meaning given in regulation 22;

“ principal stage bid ” shall be construed in accordance with regulation 27;

“ principal stage form ” shall be construed in accordance with regulation 26;

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

“ recorded spectrum holdings ” means recorded immediately useable spectrum holdings and recorded overall spectrum holdings;

“ recorded immediately useable spectrum holdings ” shall be construed in accordance with regulation 19(2);

“ recorded overall spectrum holdings ” shall be construed in accordance with regulation 19(3);

“ refusal payment ” shall be construed in accordance with regulation 103;

“replacement licence” is a licence applied for under this award process which authorises the use of frequencies comprised in a block of eight 3.4 GHz lots on substantially the same terms, conditions and limitations which apply to the pre-existing licence;

“ required assignment stage deposit ” shall be construed in accordance with regulation 89;

“ required final principal stage deposit ” shall be construed in accordance with regulation 64;

“ 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 28;

“ round price ” shall be construed in accordance with regulations 29 and 30;

“ standing high bid status ” shall be construed in accordance with regulations 33 to 36;

“ 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 2.3 GHz base price A ” has the meaning given in regulation 42(1);

“ total 2.3 GHz base price B ” has the meaning given in regulation 42(3);

“ total 3.4 GHz base price A ” has the meaning given in regulation 42(2);

“ total 3.4 GHz base price B ” has the meaning given in regulation 42(4);

“ total auction sum ” shall be construed in accordance with regulation 104;

“ total base price ” means, in respect of a bidder, the sum of that bidder's total 2.3 GHz base price A (if any), total 2.3 GHz base price B (if any), total 3.4 GHz base price A (if any) and total 3.4 GHz base price B (if any);

“ total frequencies associated with a principal stage form ” has the meaning given in regulation 44(2);

“ valid 2.3 GHz assignment stage bid ” shall be construed in accordance with regulation 74;

“ valid 3.4 GHz assignment stage bid ” shall be construed in accordance with regulation 80;

“ valid assignment stage bid ” means a valid 2.3 GHz assignment stage bid or a valid 3.4 GHz assignment stage bid;

“ valid assignment stage form ” shall be construed in accordance with regulation 71;

“ valid combination of 2.3 GHz assignment stage bids ” shall be construed in accordance with regulation 75;

“ valid combination of 3.4 GHz assignment stage bids ” shall be construed in accordance with regulation 82 or 83 as the context requires;

“ valid request to carry forward its eligibility limit ” shall be construed in accordance with regulation 26;

“ valid withdrawal of standing high bid status ” shall be construed in accordance with regulation 26;

“ valid principal stage bid ” shall be construed in accordance with regulation 26;

“ valid principal stage form ” shall be construed in accordance with regulation 26;

“ winning 2.3 GHz assignment stage bid ” shall be construed in accordance with regulation 75;

“ winning 3.4 GHz assignment stage bid ” shall be construed in accordance with regulation 81;

“ winning assignment stage bid ” means a winning 2.3 GHz assignment stage bid or a winning 3.4 GHz assignment stage bid;

“ winning bidder ” means a winning bidder for 2.3 GHz lots or a winning bidder for 3.4 GHz lots;

“ winning bidder for 2.3 GHz lots ” means a bidder who made bids for 2.3 GHz lots which became winning principal stage bids in accordance with regulations 38 or 39;

“ winning bidder for 3.4 GHz lots ” means a bidder (including the pre-existing licence holder if it is a bidder) who made bids for 3.4 GHz lots which became winning principal stage bids in accordance with regulations 38 or 40 and also the pre-existing licence holder in respect of eight 3.4 GHz lots if it is deemed to be a winning bidder under regulation 23;

“ winning combination of valid 2.3 GHz assignment stage bids ” shall be construed in accordance with regulation 75;

“ winning combination of valid 3.4 GHz assignment stage bids ” shall be construed in accordance with regulation 81;

“ winning principal stage bid ” shall be construed in accordance with regulations 37 to 40;

“ withdrawal of standing high bid status ” shall be construed in accordance with regulation 47; and

“ withdrawn lot licence ” means a 2.3 GHz withdrawn lot licence or a 3.4 GHz withdrawn lot licence.

(2) A reference in these Regulations to a “2.3 GHz lot” or a “ 3.4 GHz 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 2.3 GHz lot, a numbered 3.4 GHz lot or a “block” of such lots shall be construed in accordance with Schedule 1.

(5) A reference in these Regulations to the “lower 3.4 GHz frequency range” or the “ upper 3.4 GHz frequency range ” shall be construed in accordance with Schedule 1.

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 or days 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 or those days specified by OFCOM a sealed envelope containing—

(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) subject to regulation 7(4), 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 day or days, times and deadline on their website.

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

(a) the wireless telegraphy licence number; and

(b) the frequencies.

Section 5 Meaning of existing spectrum holdings

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

(a) existing immediately useable spectrum holdings; and

(b) existing overall spectrum holdings.

(2) “ Existing immediately useable 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.

(3) “ Existing overall 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 8; and

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

Section 6 3.4 GHz minimum requirement rule

The 3.4 GHz minimum requirement which must be specified by the applicant in the document referred to in regulation 4(3)(a)(i) shall not be greater than four.

Section 7 Application for a replacement licence

(1) The pre-existing licence holder may apply to OFCOM for a replacement licence under this award process.

(2) No other person may apply to OFCOM for a replacement licence .

(3) To apply for a replacement licence, the pre-existing licence holder, in addition to meeting the requirements of regulation 4(3), must by the same deadline also deliver to OFCOM in the same sealed envelope—

(a) a declaration, in the form set out in Schedule 4, signed by two persons on behalf of the pre-existing licence holder, consenting to the revocation of the pre-existing licence; and

(b) a document indicating whether it will participate in the principal stage and the assignment stage, or only in the assignment stage.

(4) If the pre-existing licence holder indicates that it will participate only in the assignment stage (so that it is a winning bidder only in respect of eight 3.4 GHz lots in accordance with regulation 23) the requirement to pay an initial deposit of one hundred thousand pounds under regulation 4(3)(b) does not apply to the pre-existing licence holder.

Section 8 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 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 under regulation 4(3) 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 9 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 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.

Section 10 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 13(2), 112 and 115 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.

Section 11 Changes to existing spectrum holdings

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 19, 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 12 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 13 Qualification to participate in the award process

(1) Each applicant—

(a) which was not disqualified under regulation 12, 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 12),

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 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 14 Publication of names of qualified applicants

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

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

(b) the names of their associates; and

(c) if the pre-existing licence holder applied and qualified to participate—

(i) whether it applied for a replacement licence; and

(ii) whether it will participate in the principal stage and the assignment stage, or only in the assignment stage.

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

Section 15 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 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 16 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 15, 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—

(a) OFCOM shall refund to applicants which were not qualified, or withdrew in accordance with regulation 15, 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.

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

Section 17 Additional deposit before the first principal stage round

(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 18 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 18 and shall record each bidder's existing spectrum holdings in accordance with regulation 19.

Section 18 Determination of a bidder's eligibility limit for the first principal stage round

(1) A bidder's eligibility limit shall be—

(a) where the amount which the bidder has on deposit (including the initial deposit and the additional deposit) is thirty million pounds or less, 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 more than thirty million pounds but less than seventy 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 seventy million pounds or more, forty-six.

(2) The formula is E= 30 + [(D-30,000,000)/2,500,000], where “ D ” is the amount of the deposit in pounds.

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

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

Section 19 Recording of existing spectrum holdings

(1) After the deadline specified in regulation 17(2), OFCOM shall, for each bidder, record—

(a) the bidder's existing immediately useable spectrum holdings; and

(b) the bidder's existing overall spectrum holdings.

(2) A bidder's existing immediately useable 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 9(1), 10(2), 10(3) or 11.

(3) A bidder's existing overall 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 9(1), 10(2), 10(3) or 11.

(4) 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 112 and 115 if they apply to that change; and

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

(5) 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 20 Determination of the 2.3 GHz bid limits

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

(a) determine the maximum number of principal stage bids for 2.3 GHz lots, if any, each bidder may make in any round (the “2.3 GHz bid limit”) in accordance with paragraph (2); and

(b) notify each bidder of its 2.3 GHz bid limit.

(2) The 2.3 GHz bid limit for a bidder shall be—

(a) zero bids for 2.3 GHz lots, where the total in MHz of that bidder's recorded immediately useable spectrum holdings is greater than 245 MHz;

(b) one bid for a 2.3 GHz lot, where the total in MHz of that bidder's recorded immediately useable spectrum holdings is greater than 235 MHz but less than or equal to 245 MHz;

(c) two bids for 2.3 GHz lots, where the total in MHz of that bidder's recorded immediately useable spectrum holdings is greater than 225 MHz but less than or equal to 235 MHz;

(d) three bids for 2.3 GHz lots, where the total in MHz of that bidder's recorded immediately useable spectrum holdings is greater than 215 MHz but less than or equal to 225 MHz; or

(e) four bids for 2.3 GHz lots, where the total in MHz of that bidder's recorded immediately useable spectrum holdings is equal to or less than 215 MHz.

(3) A bidder's 2.3 GHz bid limit shall not change during the principal stage.

(4) The 2.3 GHz bid limit may be different for each bidder.

Section 21 Determination of overall bid constraints

(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 number of frequencies in MHz and shall be calculated in accordance with paragraphs (4) and (5).

(4) The number referred to in paragraph (3) shall be calculated in accordance with the formula 340 MHz – z rounded down to the nearest multiple of 5 MHz, where z is the total in MHz of the bidder's recorded overall spectrum holdings.

(5) Where the number of MHz resulting from the calculation referred to in paragraph (4) is higher than 190 MHz, the number shall be 190 MHz and not that higher number.

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

Section 22 Principal stage, assignment stage and grant stage

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

(2) During the principal stage, OFCOM shall determine the total number of 2.3 GHz lots and the total number of 3.4 GHz lots which each bidder wins, but not the particular numbered 2.3 GHz lots and particular numbered 3.4 GHz lots.

(3) Following completion of the principal stage, OFCOM shall determine the particular numbered 2.3 GHz lots and particular numbered 3.4 GHz 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.

Section 23 Participation by the pre-existing licence holder where it is a bidder and has applied for a replacement licence

Where the pre-existing licence holder is a bidder and has applied for a replacement licence—

(a) it may not participate in the principal stage unless it has indicated that it will do so on the document that it submitted in accordance with regulation 7(3)(b); and

(b) it will be deemed to be a winning bidder in respect of eight 3.4 GHz lots with an associated base price of zero pounds, without having made principal stage bids, in addition to any 3.4 GHz lots that it may have won as a result of making principal stage bids.

Section 24 3.4 GHz lots available in the award process

The 3.4 GHz lots which are available in the award process shall be—

(a) the 3.4 GHz lots numbered 1 to 14 and 19 to 34, if—

(i) the pre-existing licence holder is a bidder but did not apply for a replacement licence; or

(ii) the pre-existing licence holder is not a bidder; or

(b) the 3.4 GHz lots numbered 1 to 38, if the pre-existing licence holder is a bidder and did apply for a replacement licence.

Section 25 Principal stage rounds

(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 54.

(3) The number of principal stage rounds shall be determined by OFCOM in accordance with regulation 28.

Section 26 Principal stage form

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

(2) Subject to paragraph (8), 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 2.3 GHz lots it wishes to make in that round;

(b) specify the number of principal stage bids for 3.4 GHz lots it wishes to make in that round;

(c) indicate whether it wishes to withdraw the standing high bid status of its bids for 2.3 GHz lots from consideration by OFCOM for the assignment of standing high bid status after the end of that round;

(d) indicate whether it wishes to withdraw the standing high bid status of its bids for 3.4 GHz lots from consideration by OFCOM for the assignment of standing high bid status after the end of that round; and

(e) 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 59 or 60;

(c) the bidder has complied with regulations 43, 45, 46 and 49 in respect of any principal stage bids specified on the form;

(d) the bidder has complied with regulation 47 in respect of any withdrawal of standing high bid status indicated on the form;

(e) the bidder has complied with regulation 44 in respect of the total frequencies associated with the form; and

(f) the bidder has complied with regulation 48 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) A withdrawal of standing high bid status is a valid withdrawal of standing high bid status if it is indicated on a valid principal stage form.

(7) 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.

(8) Any bidder in the principal stage 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.

Section 27 Principal stage bids

(1) 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 or, in the circumstances described in paragraph (2), at twice the round price for a lot of that type.

(2) The circumstances are where the principal stage bid becomes a winning principal stage bid after withdrawal of that bid's standing high bid status in accordance with regulation 39 or 40.

Section 28 Number of principal stage rounds

(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 37.

(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;

(b) a bidder indicated a valid withdrawal of standing high bid status in that round; or

(c) an eligibility event occurred in that round.

Section 29 Round prices for the first principal stage round

For the first principal stage round—

(a) the round price for each 2.3 GHz lot shall be ten million pounds; and

(b) the round price for each 3.4 GHz lot shall be one million pounds.

Section 30 Determination of round prices for subsequent principal stage rounds

(1) For each subsequent principal stage round—

(a) the round price for each 2.3 GHz lot shall be determined by OFCOM in accordance with regulation 31; and

(b) the round price for each 3.4 GHz lot shall be determined by OFCOM in accordance with regulation 32.

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

Section 31 Round price for 2.3 GHz lots

(1) The round price for each 2.3 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 2.3 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 four valid principal stage bids for 2.3 GHz lots at the round price of the most recent round.

Section 32 Round price for 3.4 GHz lots

(1) The round price for each 3.4 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 3.4 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 thirty valid principal stage bids for 3.4 GHz lots at the round price of the most recent round.

Section 33 Assignment of standing high bid status by OFCOM after the end of each principal stage round

(1) After the end of each principal stage round, OFCOM shall assign standing high bid status to valid principal stage bids for 2.3 GHz lots and valid principal stage bids for 3.4 GHz 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 34;

(b) second, identifying and ranking the bids made by those bidders in accordance with regulation 35; and

(c) third, assigning standing high bid status to those bids in accordance with regulation 36.

Section 34 Process for assigning standing high bid status: ranking the bidders

(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;

(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;

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

(iii) the standing high bid status of the bids was not withdrawn by the bidder in the most recent round in accordance with regulation 47.

(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

(c) within each category, bidders are ranked in a random order.

Section 35 Process for assigning standing high bid status: ranking the bids

(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.

Section 36 Process for assigning standing high bid status: assigning standing high bid status to the bids

(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).

Section 37 Determination of the winning principal stage bids

(1) Where OFCOM have determined in accordance with regulation 28 that there shall be no further principal stage rounds—

(a) principal stage bids with standing high bid status shall become winning principal stage bids in accordance with regulation 38; and

(b) principal stage bids in respect of which standing high bid status was withdrawn shall also become winning principal stage bids in accordance with regulations 39 or 40.

Section 38 Bids with standing high bid status becoming winning principal stage bids

(1) 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 2.3 GHz lots to which OFCOM assigned standing high bid status after the end of the final principal stage round; and

(b) subject to paragraph (3), the principal stage bids for 3.4 GHz lots to which OFCOM assigned standing high bid status after the end of the final principal stage round.

(3) Where a bidder has specified a 3.4 GHz minimum requirement and OFCOM has assigned standing high bid status to fewer principal stage bids for 3.4 GHz lots made by the bidder than its 3.4 GHz minimum requirement—

(a) those bids for 3.4 GHz lots with standing high bid status will not become winning principal stage bids; and

(b) there will be no winning bidder for the 3.4 GHz lots for which those bids were made.

Section 39 2.3 GHz bids in respect of which standing high bid status was withdrawn becoming winning principal stage bids

(1) Subject to paragraph (3), principal stage bids for 2.3 GHz lots in respect of which standing high bid status was withdrawn shall become winning principal stage bids for those lots in the circumstances described in paragraph (2).

(2) The circumstances are where—

(a) following the principal stage round in which the standing high bid status of those bids was withdrawn, no bidder withdrew standing high bid status from bids for any 2.3 GHz lots; and

(b) after the end of the final principal stage round, OFCOM does not assign standing high bid status to four principal stage bids for 2.3 GHz lots.

(3) The number of principal stage bids for 2.3 GHz lots which shall become winning principal stage bids under this regulation shall be the number calculated in accordance with paragraph (4).

(4) The number referred to in paragraph (3) shall be calculated in accordance with the formula (4-x), where x is the number of 2.3 GHz lots to which OFCOM assigned standing high bid status after the end of the final principal stage round.

Section 40 3.4 GHz bids in respect of which standing high bid status was withdrawn becoming winning principal stage bids

(1) Subject to paragraph (3), principal stage bids for 3.4 GHz lots in respect of which standing high bid status was withdrawn shall become winning principal stage bids for those lots in the circumstances described in paragraph (2).

(2) The circumstances are where—

(a) following the principal stage round in which the standing high bid status of those bids was withdrawn, no bidder withdrew standing high bid status from bids for any 3.4 GHz lots; and

(b) after the end of the final principal stage round, OFCOM does not assign standing high bid status to thirty principal stage bids for 3.4 GHz lots.

(3) The number of principal stage bids for 3.4 GHz lots which shall become winning principal stage bids under this regulation shall be the number calculated in accordance with paragraph (4).

(4) The number referred to in paragraph (3) shall be calculated in accordance with the formula (30- y ), where y is the number of 3.4 GHz lots to which OFCOM assigned standing high bid status after the end of the final principal stage round.

(5) Principal stage bids for 3.4 GHz lots in respect of which standing high bid status was withdrawn, and which were made in the circumstances described in paragraph (2), shall become winning principal stage bids even if the number of 3.4 GHz lots associated with those winning principal stage bids is less than that bidder's 3.4 GHz minimum requirement.

Section 41 Determination of base price

(1) The base price for a 2.3 GHz lot for which a bidder made a bid that became a winning principal stage bid in accordance with regulation 38 (“2.3 GHz base price A”) 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 3.4 GHz lot for which a bidder made a bid that became a winning principal stage bid in accordance with regulation 38 (“3.4 GHz base price A”) 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 2.3 GHz lot for which a bidder made a bid that became a winning principal stage bid in accordance with regulation 39 (“2.3 GHz base price B”) will be a sum equal to twice the round price at which the winning bidder made that winning principal stage bid.

(4) The base price for a 3.4 GHz lot for which a bidder made a bid that became a winning principal stage bid in accordance with regulation 40 (“3.4 GHz base price B”) will be a sum equal to twice the round price at which the winning bidder made that winning principal stage bid.

Section 42 Determination of total base price

(1) A reference to a winning bidder's “ total 2.3 GHz base price A ” is a reference to that winning bidder's 2.3 GHz base price A multiplied by the number of 2.3 GHz lots won by that bidder in accordance with regulation 38.

(2) A reference to a winning bidder's “ total 3.4 GHz base price A ” is a reference to that winning bidder's 3.4 GHz base price A multiplied by the number of 3.4 GHz lots won by that bidder in accordance with regulation 38.

(3) A reference to a winning bidder's “ total 2.3 GHz base price B ” is a reference to that winning bidder's 2.3 GHz base price B multiplied by the number of 2.3 GHz lots won by that bidder in accordance with regulation 39.

(4) A reference to a winning bidder's “ total 3.4 GHz base price B ” is a reference to that winning bidder's 3.4 GHz base price B multiplied by the number of 3.4 GHz lots won by that bidder in accordance with regulation 40.

Section 43 Maximum number of principal stage bids for 2.3 GHz lots and 3.4 GHz lots

In any principal stage round—

(a) the number of principal stage bids for 2.3 GHz lots that a bidder may make shall not exceed that bidder's 2.3 GHz bid limit; and

(b) the number of principal stage bids for 3.4 GHz lots that a bidder may make shall not exceed thirty.

Section 44 Overall bid constraint rule

(1) In addition to the limitations on bidding in regulation 43, 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 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 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 2.3 GHz 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 2.3 GHz lots—

(aa) the number of principal stage bids for 2.3 GHz lots made by that bidder which were assigned standing high bid status after the end of the most recent round, multiplied by 10 MHz; and

(bb) if no such principal stage bids for 2.3 GHz lots made by that bidder were assigned standing high bid status after the end of the most recent round, zero; and

(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 3.4 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 3.4 GHz lots—

(aa) the number of principal stage bids for 3.4 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 3.4 GHz lots made by that bidder were assigned standing high bid status after the end of the most recent round, zero.

Section 45 Number of principal stage bids following assignment of standing high bid status

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.

Section 46 3.4 GHz minimum requirement

Where a bidder has specified a 3.4 GHz minimum requirement, the number of principal stage bids for 3.4 GHz lots that bidder specifies on a principal stage form (if any) must be at least its 3.4 GHz minimum requirement.

Section 47 Withdrawal of standing high bid status

(1) In any principal stage round except the first one, a bidder may indicate on its principal stage form that it wishes to withdraw the standing high bid status of the bids which OFCOM assigned standing high bid status following the most recent round in accordance with this regulation.

(2) Where a bidder withdraws the standing high bid status of bids in a round, the bids which had such standing high bid status will not be considered by OFCOM for the assignment of standing high bid status after that round.

(3) A bidder may withdraw the standing high bid status of bids for one or both types of lot.

(4) Where a bidder withdraws the standing high bid status of bids for a type of lot, it shall withdraw the standing high bid status of all of its bids for that type of lot.

(5) A bidder may only withdraw the standing high bid status of bids for a type of lot in a principal stage round if each of the following applies—

(a) following the end of the most recent round, OFCOM assigned standing high bid status to some but not all of the bidder's principal stage bids for lots of that type made in the latest round in which the bidder made bids for lots of that type;

(b) the bidder makes no valid principal stage bids for lots of that type in the current round;

(c) the bidder has not withdrawn the standing high bid status of bids for lots of either type on five previous occasions.

Section 48 Request by a bidder to carry forward its eligibility limit

(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 50) 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 2.3 GHz lots on its principal stage form;

(b) specify a valid principal stage bid for 3.4 GHz lots on its principal stage form; or

(c) indicate a valid withdrawal of standing high bid status of any of its principal stage bids.

(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 52(3).

Section 49 Eligibility rule

(1) The number of eligibility points used by a bidder in a principal stage round, calculated in accordance with regulation 51, may not exceed that bidder's eligibility limit for that round, calculated in accordance with regulation 50.

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

Section 50 Determination of a bidder's eligibility limit

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

(a) for the first principal stage round, in accordance with regulation 18; 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 the most recent round.

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