One2One takes DTI to court

One2One is taking the Department of Trade and Industry (DTI) to court over changes to its wireless telephony licence.

The DTI wants to introduce a fifth operator into the market when third generation (3G) UMTS (Universal Mobile Telecommunications Service) licences are introduced later this year. To give the newcomer a chance to establish itself, it's forcing existing firms to allow the new entrant to 'roam' or 'piggy-back' services on their networks. But One2One says it opens the way for the DTI to modify existing licenses as and when they see fit.

Phil Reynolds, One2One senior regulatory counsel, said: "It's not about blocking a new entry into the market. It's not about the government's policy on roaming. It's about the process of enforcing roaming on existing licensees."

According to the 1984 Telecoms Act, operators' licences can be changed by getting their unanimous agreement, or going to the Competition Commission (formerly the Monopolies and Mergers Commission), a process that takes about six months.

However, the government is known to favour moving ahead quickly with the UMTS auction process, and according to One2One, is ignoring the Telecoms Act in its haste

Orange says it's backing One2One's action, but Ted Mercer, head of the IT/Telecoms law group at Taylor Joynson Garrett, is not convinced the operator's motives are pure. "If you're cynical you'd say stalling the auction process [for next generation licences] is tactically useful to One2One. If successful in this action, they'll delay the UMTS bidding procedure, which could be in their interest, given they're about to get new owners or file for an IPO (initial public offering)."

In a prepared statement, the DTI said: "Without roaming, the UK risks gaining less of the potentially huge benefits of the 3G market. We hope roaming agreements will be negotiated commercially as One2One said they would also prefer. We believe the government's decision is lawful and we welcome the opportunity for prompt clarification from the court so we can get on with the auction."

The hearing continues today at the High Court in the Strand, London.