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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PMQs review: Jeremy Corbyn turns "the nasty party" back on Theresa May

The Labour leader exploited Conservative splits over disability benefits.

It didn't take long for Theresa May to herald the Conservatives' Copeland by-election victory at PMQs (and one couldn't blame her). But Jeremy Corbyn swiftly brought her down to earth. The Labour leader denounced the government for "sneaking out" its decision to overrule a court judgement calling for Personal Independence Payments (PIPs) to be extended to those with severe mental health problems.

Rather than merely expressing his own outrage, Corbyn drew on that of others. He smartly quoted Tory backbencher Heidi Allen, one of the tax credit rebels, who has called on May to "think agan" and "honour" the court's rulings. The Prime Minister protested that the government was merely returning PIPs to their "original intention" and was already spending more than ever on those with mental health conditions. But Corbyn had more ammunition, denouncing Conservative policy chair George Freeman for his suggestion that those "taking pills" for anxiety aren't "really disabled". After May branded Labour "the nasty party" in her conference speech, Corbyn suggested that the Tories were once again worthy of her epithet.

May emphasised that Freeman had apologised and, as so often, warned that the "extra support" promised by Labour would be impossible without the "strong economy" guaranteed by the Conservatives. "The one thing we know about Labour is that they would bankrupt Britain," she declared. Unlike on previous occasions, Corbyn had a ready riposte, reminding the Tories that they had increased the national debt by more than every previous Labour government.

But May saved her jibe of choice for the end, recalling shadow cabinet minister Cat Smith's assertion that the Copeland result was an "incredible achivement" for her party. "I think that word actually sums up the Right Honourable Gentleman's leadership. In-cred-ible," May concluded, with a rather surreal Thatcher-esque flourish.

Yet many economists and EU experts say the same of her Brexit plan. Having repeatedly hailed the UK's "strong economy" (which has so far proved resilient), May had better hope that single market withdrawal does not wreck it. But on Brexit, as on disability benefits, it is Conservative rebels, not Corbyn, who will determine her fate.

George Eaton is political editor of the New Statesman.