Propagation testing suggests interference mitigation costs could be high, eating into whatever price is obtained for the 800 MHz band. Potential 4G vendors might even negatively bid in the hope that a new bidding process might see the reserve figure reduced.
While we can hope that the auction will raise £3.5bn, if the providers are able to they will try and bid as close to the reserve price, so it is entirely feasible that the auction may only raise £2bn. Also, it must be remembered that the interference mitigation costs of £180m that will result from the 800 MHz band are destined to be paid for out of the money raised by the auction.
In personal life, one should never spend a promised bonus until it is safely in your bank account. There is a danger that all the parties are spending the money before the money arrives in the bank.
An additional aspect is what impact will this auction have on areas like corporation tax for the mobile operators? If the money raised by the auction means lower profits, and thus lower corporation tax, the UK plc may not actually gain £3.5bn.
Reaction to the Autumn Statement: 12 cities set for £50m windfall to accelerate broadband
This is only £4 million per city, and it should be made clear that this funding is meant to go towards projects that deliver ultra-fast broadband, not just infill areas of the city with speeds of 40 to 80 Mbps, which we have seen mentioned. The state aid approval that delayed the superfast projects may impact on these projects as getting approval for projects in areas where there is still lots of commercial activity and improvements happening will be difficult. Leeds and Bradford have actually managed to get Virgin Media to deploy a city wide Wi-Fi network at no cost, showing that if other cities spend on this, then serious questions need to be asked about why they are spending the money that way.
Reaction to story that EE is to borrow £350m from European Investment Bank to help double size of masts
I suspect that the mast height doubling is partly why the changes to the planning regulations are underway, i.e. the operators have lobbied for this even before the changes were announced. Mobile masts is often a topic that gets lots of local objections raised, though raising the height, in theory, should lessen the potential for exposure for those living nearby, so should be an improvement rather than an increase of any perceived risk.
Operators like Virgin Media business are also approaching the 4G coverage issue from the micro-cell viewpoint, where small low power units can be mounted in lampposts, giving good local coverage to areas that have had bad signal coverage to date.