UK taxpayer 'fleeced' in spectrum selloff windfall British taxpayers are bailing out Europe again. This time, it isn't aid to the basket-case Euro economies of Greece or Ireland, says MP Tom Watson, but a spectrum windfall that the taxpayer should pocket... only won't. Watson can't understand why profits from the sale of spectrum originally gifted to mobile operators in 1991 …
Who owns the air above your head containing the spectrum?
What a jolly clever revenue generating wheeze it was taking the (3G) spectrum that belonged to us and selling it at outrageous prices to companies who recover their costs by charging us to use what was already ours.
Spectrum use needs to be managed and it should be for the benefit of the owners (us). Selling to the highest bidder ensured the highest level of stealth taxation.
All spectrum should have been given away with sufficient controls to ensure it is put to good use and that we get a good deal from the companies providing services in it.
I'm sure I read this somewhere.
I know it might be considered 'Business Unfriendly' but in the unlikely event if they really wanted to they could draft a law to prevent Asset (spectrum in this case) sold/granted to one company being sold at a profit as the result of a merger without the Government receiving 66% of said profit.
But that would be retrospective taxation..... And?
You know ... we live in a world so mad that there are people out there who would actually kill for something as silly and insignificant as money.
The sellout of sovereign nations to corporate interests is now an old story.
People can talk all they want all day long but actions speak louder than words and therefore "... by their actions shall you know them".
The writing is clearly on the wall for all those that can see it.
Turn on, Tune In and Drop Out.
"That was taken by the authorities when it approved of the merger."
Yet another in a long line of government screw ups.
The licenses shouldn't have been given away, they should have been given long term leases. This would have ensured the income would have been commensurate with their value to owners. They were given away to encourage rapid growth and increased competition. Back then it was a bit more of a gamble to invest in mobile telephony.
By the time 3g came around we had a convoluted auction process which almost crippled companies bidding for them.
I'm a europhile if anything, but the ownership of the above companies also reminds me how utterly sh't the management of BT were in those days.
"British taxpayers are bailing out Europe again. " This is a cheap shot though. And not actually true as pointed above.
Years ago, I wondered why the Govt gave away 3 UK wide infrastructures that the taxpayer funded, and the general public then had to pay more to use them...Telecom, British Gas and the National Grid....also gave away a car dealer we owned, and subsequently had to bailo out it's next 3 owners......was British Leyland.
None of the existing offspring of these UK Taxpayer owned companies is anything to do with Britain ownership watys anymore, yet we continue to fund their expansion plans and research through tax incentives
I myself have no problems with sell-offs of state assets or tax incentives for R&D and expansions. What is important are the terms under which these incentives are granted and the expectations attached.
For example, it is fine to sell-off infrastructure such as that named as long as the resultant entities are well regulated and perform to certain predefined criteria (investment, efficiency, pricing etc). These companies will obviously want to run at a profit but the main issue has been that they have been able to run at a profit that is ever increasing with little re-investment and rampant abuse of the previous owners of said assets. That is the Government's fault for improper oversight.
Government's are hopelessly inefficient at running these things and willfully piss money down the drain. Free markets will do the same (except into shareholder's coffers) unless regulated properly. That is the key. You may well get the most proceeds by allowing them free-reign but you also pay for it in the end through higher pricing. The fact that the sale proceeds were not side-pocketed into a sovereign wealth fund is a story for another day.
On R&D, I have no problem with tax incentives for doing so as it is likely that you'd never see the money otherwise. You need to be sensible around what you allow though as there is no point forgoing £2bn in tax revenue for what ends up as £200m in research unless there is a massive kicker from the results down the line otherwise you're just encouraging the gaming of your tax system like Ireland has.
All the operators got fleeced by the government in the 3G auctions so I don't have a problem with it. If they gave 2G spectrum away for free then tough. They also made the mistake of giving Vodafone and Cellnet (now Telefonica UK) all the 900MHz spectrum, which is the most efficient for the now exploding use of data. Future operators were not considered.
'bailing out Europe', in the context of recent news, means 'lending'.
With interest (albeit probably less than the 16% that Greece is having to pay out as a result of US companies saying they might not be able to pay their loan.
The same US companies that gave sub-prime mortgages a 'Triple-A' rating and allow companies to buy their ratings off them.
OK - so they are making a profit out of spectrum given to them for free. OK, so it wasn't very wise to give them the spectrum forever (if that is the case). However, nobody seems to be mentioning in the same context that these same companies paid insane amounts of money for 3G spectrum - and us all + UK government happily rubbed our hands at the prospect of that "windfall".
And very few bothered to think about the fact that it's us all who paid (and are still paying) that money back to the mobile companies anyway. And nobody seems to be mentioning the fact that we seem to be right at the bottom of the 4G adoption curve compared to plenty of other countries - not in small part because so much was spent by mobile companies on 3G spectrum, that they are not keen on doing the same thing again for 4G spectrum.
So before jumping up and down, it is useful to look at the matter from all angles, and see who is winning and who is losing in the long term, and what other implications there are aside from a particular sum of money changing hands in the immediate future.
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