Ihug: back in bidding but not counting out further legal action

Ihug will be back bidding when the government radio spectrum auction resumes today, but is reserving its right to resume court action.

Ihug will be back bidding when the government radio spectrum auction resumes today, but is reserving its right to resume court action.

Ihug unsuccessfully challenged the way so-called second-generation (2G) spectrum is being offered in the auction. Unlike spectrum set aside for sophisticated 3G services to be introduced in the next few years, the ownership of the 2G lots is not capped, meaning they could all be captured by a single large interest.

Thus far, Telecom, Vodafone and Telstra Saturn have been the only serious bidders for the 3G lots while Ihug and others have concentrated on the 2G offerings - which can be used immediately for current mobile services and, following a recent ITU decision, for 3G services when they become available.

The auction of 2GHz mobile spectrum was halted yesterday morning, with acting communications minister Michael Cullen saying it would be "irresponsible to proceed" before a Court of Appeal decision on appeals against the allocation of spectrum by the New Zealand Maori Council and Mrs Rangiaho Everton.

Round Six of the auction on Wednesday was clear, and a second clear round yesterday morning would have seen the auction wound up. Cullen said he was advised that the risk of a second clear round "was low but could not be entirely discounted," which would have seen the government committed to a sale while the appeals were still in court.

The appeals were declined yesterday and the auction will resume at 9am today.

Like Cullen, Ihug director Nick Wood does not expect bidding to stop today: "I doubt it now. I'd be happy if it did, because I won't have paid that much and I'll have got some spectrum, but I'll be surprised if it does."

While legal challenges to the auction structure have thus far been brushed aside by the courts, Wood says Ihug reserves its right to continue legal action - but in the meantime will continue bidding.

Wood believes the auction wasn't stopped because of the Maori appeals but to generate some publicity around the auction and possibly attract late registrants: "If they were going to hold it up for these court cases then they'd have held it up before it started."

Wood agrees that the major telecommunications companies have already largely got what they wanted - hence the quiet bidding, and lack of a large windfall for the government, with a mere $40 million bid so far.

That may change today. There are reports this morning that Jump Capital - a surprise absentee from the original register - may have revived its plans for a common-carrier mobile networkand be preparing to to enter the auction with backing from Fay Richwhite and the Todd family.

If Jump does come in, it faces one future branding issue: Telecom recently registered the domain names jumpmobile.co.nz, jumpahead.co.nz and jumpstore.co.nz.

The auction Web site is at http://auction.med.govt.nz

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