4G auction raises £1bn less than expected

£3.5bn has been pre-spent; just £2.35bn will be arriving in the coffers.

The auction for the 4G mobile communications spectrum has raised just £2.34bn, over £1bn short of expectations. Since the money has been effectively pre-spent by the chancellor in the most recent budget, the discrepancy will be extremely problematic for the Government's budget plans.

The £2.34bn will buy five companies — EE, 3, O2, Vodafone and a new operator "Niche Spectrum Ventures Ltd" (owned by BT)  — access to the 4G spectrum. This will allow those operators to run mobile broadband throughout much of the UK, and is partly enabled by the switch-off of analogue TV, which freed up part of the 4G spectrum for alternative use.

While the Chancellor was apparently greedy in assuming that Britain could earn £3.5bn from the sale of the spectrum, the last auction like this, held under Gordon Brown's treasury, raised £22bn. But the 3G sale was markedly different from the 4G one. Held in the midst of the dot-com boom, the hope for revenue from the new technology was inflated beyond the realms of possibility, and a concerted PR campaign on the part of the government running for three years beforehand ensured that hype reached fever pitch.

Take, for example, Webvan. The company was founded with the promise of same-day delivery in the San Francisco area on a number of basic products — it was, basically, Ocado. But unlike Ocado, it had a market cap post-IPO of $8bn. Ocado, undoubtedly better than Webvan in every aspect, but ten years later, went for a quarter of that. In other words: the 2010s are not the 2000s when it comes to making big money from technology.

The 3G auction was also successful, however, in managing expectations. The general assumption was that "licences would sell for a total of about £2-4 billion", according to Ken Binmore and Paul Klemperer, authors of the definitive look at the auction. If this Chancellor has made one mistake, it was overinflating expectations — and if he's made two, it was writing those overinflated expectations into the nation's budget. His hubris will sting this morning.

4G iPads. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Jeremy Corbyn challenged by Labour MPs to sack Ken Livingstone from defence review

Former mayor of London criticised at PLP meeting over comments on 7 July bombings. 

After Jeremy Corbyn's decision to give Labour MPs a free vote over air strikes in Syria, tonight's Parliamentary Labour Party (PLP) meeting was less fractious than it could have been. But one grandee was still moved to declare that the "ferocity" of the attacks on the leader made it the most "uplifting" he had attended.

Margaret Beckett, the former foreign secretary, told the meeting: "We cannot unite the party if the leader's office is determined to divide us." Several MPs said afterwards that many of those who shared Corbyn's opposition to air strikes believed he had mishandled the process by appealing to MPs over the heads of the shadow cabinet and then to members. David Winnick declared that those who favoured military action faced a "shakedown" and deselection by Momentum activists. "It is completely unacceptable. They are a party within a party," he said of the Corbyn-aligned group. The "huge applause" for Hilary Benn, who favours intervention, far outweighed that for the leader, I'm told. 

There was also loud agreement when Jack Dromey condemned Ken Livingstone for blaming Tony Blair's invasion of Iraq for the 7 July 2005 bombings. Along with Angela Smith MP, Dromey demanded that Livingstone be sacked as the co-chair of Labour's defence review. Significantly, Benn said aftewards that he agreed with every word Dromey had said. Corbyn's office has previously said that it is up to the NEC, not the leader, whether the former London mayor holds the position. In reference to 7 July, an aide repeated Corbyn's statement that he preferred to "remember the brilliant words Ken used after 7/7". 

As on previous occasions, MPs complained that the leader failed to answer the questions that were put to him. A shadow minister told me that he "dodged" one on whether he believed the UK should end air strikes against Isis in Iraq. In reference to Syria, a Corbyn aide said afterwards that "There was significant support for the leader. There was a wide debate, with people speaking on both sides of the arguments." After David Cameron's decision to call a vote on air strikes for Wednesday, leaving only a day for debate, the number of Labour MPs backing intervention is likely to fall. One shadow minister told me that as few as 40-50 may back the government, though most expect the total to be closer to the original figure of 99. 

At the end of another remarkable day in Labour's history, a Corbyn aide concluded: "It was always going to be a bumpy ride when you have a leader who was elected by a large number outside parliament but whose support in the PLP is quite limited. There are a small number who find it hard to come to terms with that result."

George Eaton is political editor of the New Statesman.