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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Five things Hillary Clinton’s released emails reveal about UK politics

The latest batch of the presidential hopeful’s emails provide insight into the 2010 Labour leadership contest, and the dying days of the Labour government.

The US State Department has released thousands of Hillary Clinton’s emails. This is part of an ongoing controversy regarding the presidential hopeful’s use of a private, non-governmental server and personal email account when conducting official business as Secretary of State.

More than a quarter of Clinton’s work emails have now been released, in monthly instalments under a Freedom of Information ruling, after she handed over 30,000 pages of documents last year. So what does this most recent batch – which consists of 4,368 emails (totalling 7,121 pages) – reveal?
 

David Miliband’s pain

There’s a lot of insight into the last Labour leadership election in Clinton’s correspondence. One email from September 2010 reveals David Miliband’s pain at being defeated by his brother. He writes: “Losing is tough. When you win the party members and MPs doubly so. (When it's your brother...).”


Reaction to Ed Miliband becoming Labour leader

Clinton’s reply to the above email isn’t available in the cache, but a message from an aide about Ed Miliband’s victory in the leadership election suggests they were taken aback – or at least intrigued – by the result. Forwarding the news of Ed’s win to Clinton, it simply reads: “Wow”.


Clinton’s take on it, written in an email to her long-time adviser, Sidney Blumenthal, is: “Clearly more about Tony that [sic] David or Ed”.

Blumenthal expresses regret about the “regression” Ed’s win suggests about the Labour party. He writes to Clinton: “David Miliband lost by less than 2 percent to his brother Ed. Ed is the new leader. David was marginally hurt by Tony's book but more by Mandelson's endorsement coupled with his harsh statements about the left. This is something of a regression.”
 

Peter Mandelson is “mad”

In fact, team Clinton is less than enthusiastic about the influence Mandelson has over British politics. One item in a long email from Blumenthal to Clinton, labelled “Mandelson Watch”, gives her the low-down on the former Business Secretary’s machinations, in scathing language. It refers to him as being “in a snit” for missing out on the EU Commissioner position, and claims those in Europe think of him as “mad”. In another email from Blumenthal – about Labour’s “halted” coup against Gordon Brown – he says of Mandelson: “No one trusts him, yet he's indispensable.”

That whole passage about the coup is worth reading – for the clear disappointment in David Miliband, and description of his brother as a “sterling fellow”:


Obsession with “Tudor” Labour plotting

Clinton appears to have been kept in the loop on every detail of Labour party infighting. While Mandelson is a constant source of suspicion among her aides, Clinton herself clearly has a lot of time for David Miliband, replying “very sorry to read this confirmation” to an email about his rumoured demotion.

A May 2009 email from Blumenthal to Clinton, which describes Labour politicians’ plots as “like the Tudors”, details Ed Balls’ role in continuing Tony Blair and Gordon Brown’s “bitter rivalry”:


“Disingenuous” Tories “offending” Europe

The Tories don’t get off lightly either. There is intense suspicion of David Cameron’s activities in Europe, even before he is Prime Minister. Blumenthal – whose email about a prospective Cameron government being “aristocratic” and “narrowly Etonian” was released in a previous batch of Clinton’s correspondence – writes:

Without passing "Go," David Cameron has seriously damaged his relations. with the European leaders. Sending a letter to Czech leader Vaclay Klaus encouraging him not to sign the Lisbon Treaty, as though Cameron were already Prime Minister, he has offended Sarkozy., Merkel and Zapatero.

He also accuses him of a “tilt to the Tory right on Europe”.

In the same email, Blumenthal tells Clinton that William Hague (then shadow foreign secretary), “has arduously pressured for an anti-EU stance, despite his assurances to you that Tory policy toward Europe would be marked by continuity”.

In the aftermath of the 2010 UK election, Blumenthal is apprehensive about Hague’s future as Foreign Secretary, emailing Clinton: “I would doubt you’ll see David again as foreign secretary. Prepare for hauge [sic, William Hague], who is deeply anti-European and will be disingenuous with you.”

Anoosh Chakelian is deputy web editor at the New Statesman.