Mobile licence fees: market value still not realised?

To close the year – as indeed I did on the last day of 2020 – this post constitutes the text of my autumn 2021 column for Stage, Screen & Radio – the quarterly magazine for members of BECTU, the media and entertainment union and a part of Prospect. The text, which focuses on a consultation on mobile licence fees launched in the summer by Ofcom, the UK’s communications regulatory authority, has been updated to account for the outcome of the consultation, while some links have been added.

Ofcom is consulting on new licence fees for 3G mobile spectrum. Here, we revisit a horror story and update it for our age.

In the middle of July, Ofcom issued a consultation proposing new annual licence fees for mobile spectrum in the 2100 MHz range, commonly used by operators to supply 3G mobile services.

Readers may well recall – with a shudder – Ofcom’s original auction process, back in the spring of 2000, for 20-year licences to use this spectrum. At the outset, the auction was thought likely to raise around £5bn (a sum in excess of operators’ bidding models but which could still have been absorbed), inflated by a competitive bidding process designed by economists and based on games theory alongside huge interest in the potential of 3G spectrum to revolutionise our usage of mobile phones (then used for little more than voice calls and minimal data). However, it ended up raising some £22.48 billion after an exhausting process lasting nearly seven weeks. At the time, such a sum represented around 2.5 per cent of UK GDP – and could have built 400 hospitals.

Faced with the prospects of paying a similar amount per head in Germany in another 3G auction there, as well as elsewhere in Europe, the sheer unsustainability for the operators involved of financing such sums led – among other things – to a bursting of the telecoms asset bubble, economic recession and a delay in capital expenditure which put back the introduction of 3G services. Lessons were learned – but the process was a scarring one, even for those of us charged only with monitoring progress and analysing the potential impact. For members of the union working in the industry, the damage caused was both deep and long-lasting.

Just to put some perspective on such sums, inflation (as measured by the Retail Price Index) has risen by 78 per cent since then. £22.48 billion would now be worth some £40 billion – and, in 2021, you could probably get a working Covid-19 Track and Trace system for that.

Crisis

Ofcom’s regime was modified in 2011 in the wake of the banking-led financial and currency crisis and it is now, in 2021, proposing comparatively modest fees, ranging between £290,000 and £567,000 per MHz, depending on the type of spectrum involved, which will lead to annual licence fees of between £12.79m (for O2) and £25.58m (for EE).

These sums compare interestingly with the auction-led outcome which led to a total annual cost in excess of £1bn. Perception of the market value against which Ofcom is obliged to set the fees is associated with many things, not the least of which is that 3G has now been surpassed, with 6G likely to come on stream in the 2030s, and with EE announcing that it will switch off its 3G network in 2023 to support its 4G and 5G networks. Even so, the figures are starkly divergent.

O2 has some 24 million direct mobile customers while EE has around 32 million so the fees are unlikely to make much of a dent in consumers’ contract prices – they amount to around 53p/year for O2 customers and around 80p/year for EE ones. Neither will they make much of a contribution to public finances (Ofcom is self-financing on the basis of the fees it generates and the fines and penalties it levies, and it is a net contributor to the Treasury (p. 55)).

For workers in these and the other mobile operators, however, the impact is likely to be a little more significant. Ofcom is rather dismissive of the argument based on narrow economic considerations (consultation document, p. 33), but each pound of fees that mobile operators are forced to pay is likely to lead either to a reduction in capital expenditure or an increase in the never-ending search for efficiencies (or, indeed, both). Ofcom takes no view about the impact on workers, but anyone arguing that each £1 million of fees is insignificant has never sat in on pay, or other, negotiations with a corporate employer.

Workers and the operators for which they work might well be justified in arguing that 3G licence fees have already been paid in full.

Ofcom was – at the time the column was written – due to finalise the proposals later in 2021 with the fees to apply as from 4 January 2022.

On 13 December it announced a fractional reduction in the licence fees to £561,000 for paired spectrum and that it would consult further on unpaired spectrum – a very minor win for the operators with annual fees for EE and O2 now set at £22.44 million and £11.22 million, respectively (although, depending on the outcome of the further consultation, this may rise further). Ofcom continues to maintain that its licence fee proposal has no impact on investment (response, pp. 45-47) on the grounds that setting fees below market value’ would effectively amount to it giving operators an ‘unconditional subsidy’ (p. 47) – an argument which, in the historic context, demands a certain amount of chutzpah to deliver.

Sites of interest – a closer look

Saturday turned out to be a good opportunity to get in some Christmas shopping in Balivanich (bright lights, big city) – all still in the bags, BTW – but Sunday saw one of those days in which the sun shone all day alongside a remarkable absence of wind. It was also a day with a low tide – the lowest of the month, in fact – and in the middle of the day, too. So, too good an opportunity to miss to do two things – firstly, try and spot the remains of the submerged forest which, at least one source has it, can also be found at the headland; as well as test out the sites local to me on Rubha Aird na Mhachrach (Ardivachar Point).

About the submerged forest – well, nada. I did find a lot of heavily stressed rock usually buried by the tide and, of course, a fair bit of kelp, though. Local experts tell me that they’ve found nothing any time they’ve been here and it may be that sea action, and winds, have covered things up since 1985 (to when the source dates). But, also, the neapest of neap tides does go out a bit further than this, and so a future occasion might prove more rewarding.

I found both of the sites up on the Point pretty easily as a result of the accuracy of the SCAPE app when it comes to the sites’ GPS bearings. The first of these is a midden alongside some apparently structural stonework; and, secondly, there is a mound which ‘may be of archaeological potential’. As before, my comments below about this do need to be treated as those of an enthusiastic amateur and they may well be subject to a lesser or greater degree of revisionism at some future point.

When it comes to the first, I was looking only for a midden, having forgotten about the stonework (although the photos below – two different sides of the same thing – seem to capture (quite by mistake!) some of the latter). There is no evidence of shellfish or animal bones in the midden; but some interesting colours reflecting a solid bank of peat ash (the light brown colour at the bottom in the RHS photo) and what looks like some charcoal (in both) underneath the top soil (visible more again in the RHS photo).

Moving on further round the Point to the mound, this took me a little time to find because it is both quite small in terms of size as well as low to the ground. More of a molehill than a mound, really. Indeed, the GPS told me I was more or less on top of it (I wasn’t, quite) before I actually spotted anything. That doesn’t mean there isn’t an interesting story to be told here, though, and the more you look at the site, the more the details of the story that it is telling become apparent. As far as I was concerned, I found five interesting things about it:

1. the footprint of the site is larger than it first appears and by a simple assessment of its known dimensions. Partly, this is a reflection of…

2. … its shape, which is not round as might be suggested by the word ‘mound’, but elongated and which appears to have a ‘funnel’ at one end (see the next picture down). Think of a question mark with a mirror placed adjacent to the left hand edge. The elongated end might suggest the presence of some sort of entrance chamber. There is also a clear ‘ditch’ around the central heap. This gives the best clue to the overall shape as well as the potential presence of the ‘entrance chamber’ – and might also indicate walls, corbelling being a usual feature so as to minimise the need for roofing materials, structural timber being in short supply around at least the current coastline.

3. standing at the ‘entrance’ end, I spent some time debating the mound’s alignment on a compass. According to the app on my phone, it appears to lie on a bearing of 100-280 degrees (east-west being 90-270 degrees), so there is no clear compass-based alignment (it’s sort of north-east/south-west). My, very rough, assessment from a few years ago (which needs to be checked) is that the sun at the summer solstice sets at a bearing of about 320 degrees so there doesn’t appear to be any solstice-based clues as to the orientation.

However, looking from there directly along the mound, I then spotted what looked to me like some sort of marker, in the form of a grassy tussock now close to the cliff edge. The tussock was soft and yielding and it’s not obviously rocky but it did stand out. Sometimes a grassy tussock is just a grassy tussock, of course. Nevertheless, at one point in the year, I think the sun would set directly behind this marker and, perhaps, that was good enough for those who decided to located the mound at this point here.

It is, of course, at the ‘wrong’ end of the site, however – if sunset was the key then, from Maeshowe up on Orkney, where the sun shines through the entrance chamber to illuminate the back wall three weeks either side of the winter solstice, we would expect the mound to be the other way around. Thus, it is more likely that sunrise, not sunset, gives the key to the orientation; and also, given the earth’s tilt, a point towards the summer, rather than the midwinter, solstice. Checking that out of course means an early start. Hmmmm.

Is that some sort of marker I see before me? Note the low-lying nature of the mound.

4. Looking from that same position at the ‘entrance chamber’ end but in the other direction, i.e away from the site, there seemed to me to be a clear path (on what is now croft land), approaching the site at an angle of about 90 degrees (i.e. from the north-east; and, probably, in the direction the midsummer sun rises here). Interestingly, the ‘path’ appears to take a small turn more directly towards the ‘entrance chamber’.

Of course, the ‘path’ is at ground level now, whereas the site is clearly subterranean. It’s not so evident from the picture below, but it is also waterlogged – and it might thus be a sign of a drainage channel dug far more recently. However, water tends to lie in areas for a reason (of which drainage is only one); one of which might be the presence of a well-trodden path in times gone by or, indeed, a line of stones laid down to constitute some sort of approach ‘road’. Paths, once established, tend to persevere (‘reference required’). What may also be of interest is that the boggy area informed by the ‘path’ then turns along the line of the existing croft fence (upper centre right) before crossing the area occupied by the site of the mound to its west (to the right of the picture) – i.e. it skirts the actual site). We might also usefully wonder what would be the actual function of a more recent drainage channel laid at that angle, and at that point on the land.

And is that a path I see before me? The (rather strangely shaped) shadow cast by your photographer lies – deliberately – across what is more or less the centre of the mound)

5. To the north a few steps away lies a series of stones, stretching more than 1m in length, set at what is now ground level and ending at what is now eroded coastline. So, it’s reasonably significant in terms of size and might well be evidence of some sort of boundary wall, built either to emphasise the importance of the site in some way or, perhaps, to keep out animals. There is no such evidence of a wall on the other side of the site, however. It is all kinds of interesting that, if indeed this is a boundary wall in times gone by, it is mirrored by the presence of an existing, contemporary fence alongside; whereas there is neither wall nor fence on the other side.

On the whole, I think this is a more important site than is superficially evident from its size alone. Some parts of the above – quite a bit of it, in fact – are the product of imagination; and that has its place, too, in archaeology which, substantially, looks at the evidence available and seeks to use that to tell a story. Looking at the hard facts: the site remains fenced off to the most direct route of public access, so is not particularly accessible; the site appears not to be currently maintained as croft land (whereas access to the shoreline – for seaweed, salvage and fishing – would be an important part of crofting rights); and drainage seems to flow around the site, not through it: which might either be by accident or design but which, in either case, might also be the product of continued maintenance down the centuries.

There are also, I think, some features which make the site worthy of some note. Given that it is quite difficult to spot (other than to a trained eye), and given the nature of the development of SCAPE’s ‘sites of interest’ (which is of community origin rather than the product of miles upon miles of serendipitous tramping up and down the coasts of these islands), it’s selection as one such site is likely to reflect a level of community awareness of it as the location of something in some way sacred. That might be drawn from some kind of folk memory or it might be the product of actual routines and customs handed down from generation to generation. And about which, at this point in the life of Ardivachar, a decision might need to be taken in respect of future generations. When the current outbreak of Covid-19 permits, it would be well worth me catching up with my long-established neighbours in the township!

Sites of interest – a desk-based view

This week’s archaeology lecture was led by Tom Dawson and Jo Hambly, of the SCAPE Trust who introduced their work on coastal sites of interest around Scotland other than on the western isles, including on Shetland, Orkney, St. Andrews, Wemyss Caves, on the Fife coal coast, and Eyemouth; and also their app identifying sites of interest around Scotland. SCAPE – standing for Scottish Coastal Erosion and the Problem of Erosion although, like a lot of organisations, the acronym probably means more in terms of branding than the words which make it up – is based at St. Andrews and works with Historic Environment Scotland on issues arising from Scotland’s coastal heritage. As a result it takes a keen interest in issues connected with erosion, rising sea levels and climate change; and many of these projects can be picked up via the SCAPE website.

All of which of course means it has a lot to discuss when it comes to the western isles, not least around Baile Sear, where we are doing some fieldwork, and when it comes to the issue of the sinking of the land. While mainland Scotland is rebounding following the compression of the land during Ice Age, when Scotland was covered by glaciers up to a kilometre thick, there is no such ‘trampoline’ effect out here since the glaciers were not as thick; in contrast, the land is sinking – and it’s not under the weight of all those scheduled monuments either:

I spotted this map, which is focused on Harris and Lewis, our neighbours to the north, and which cuts off the bottom of South Uist completely, on the Twitter feed of Mark Rowe. Each dot represents a scheduled monument and the map – which is of uncertain origin, although it seems to have been compiled by the County Archaeologist for the Western Isles Historic Environment Record – shows a quite remarkable amount of known history (even if it’s of the ‘known unknown’ type). Mark Rowe writes the Outer Hebrides guidebook for Bradt Guides, and he notes that between the first and second editions of the guide, between 2017 and 2020, the number of identified sites across the western isles increased by 3.8%, to 13,348 (an increase in terms of number of nearly 500).

Part of this increase is likely to reflect an increase in interest in archaeology (read on…) – but it’s also likely to reflect the fact of coastal erosion – from wind and wave alike – which is making sites apparent where they were not before and which is, of course, also jeopardising them, too. There are slips and slides in sites of interest not only because of the natural sinking of the islands as a result of the sheer density of the gneiss supporting it but also because of tides and sea surges and of the action of the wind in shifting vast quantities of sand from one place to another, resulting in structures buried for centuries under deposits of topsoil and grass starting to become exposed but in danger of slipping out of our grasp in terms of comprehension as there simply isn’t enough time – or enough resource – to get to grips with what is there. This is very evident at Baile Sear – the rocks to the centre-right of the picture on the face of the dune, which I took on my last visit the weekend before last, seem to be structural and to have slipped down the fall line from further up: they’re not there by chance.

A phenomenal amount of work went into the development of SCAPE’s sites-at-risk app, both from the experts from SCAPE and from local expert archaeologists but, as importantly, from local communities who have knowledge – and sometimes folk memories – stemming from the practices and customs handed down from generation to generation in what was a largely static population (around, for instance, the sites of C19 and C20 middens no longer in use). But there are (at least) two problems: one is that coverage is likely to be patchy; and the second is that, where sites of interest and which are at risk have been recorded, that information quickly dates if it is not maintained while sites may be lost where a need for maintenance has not been spotted as a result of the site not being visited on a regular basis.

Which is where the community comes back in. Building on the interest which sees people turn up to archaeological events and digs out of curiosity, as well as out of a desire to contribute their own knowledge and awareness, information can be gleaned which means that apps stay relevant and useful – as long as the people using them know, at least in general, what they’re doing (and as long as the information submitted is moderated – which it is when it comes to SCAPE’s app).

There are, on the SCAPE map, around a dozen sites of interest within a half-hour walk of the front door of my bit of the north-west corner of South Uist (and including one right on my doorstep, which is likely to account for the large quantity of shells I dug up when digging the garden back when the days were a bit longer than they are now). There are likely to be more than these – including the remnants, on this side of what is now the bay, of the submerged forest on the southern shore of Benbecula that I noted in last week’s post. Some of these are mounds, some are middens, some are wheelhouse sites, some are where human remains have been discovered and some are where bodies have been buried in some rather interesting ways. None seem to be of a particularly high priority – or, at least, they were not when the app was first compiled. But now – who knows?

I had hoped to get out today to check out a few of these, test my own developing skillbase and make a contribution; but a morning spent getting boosted (yes: please do it, folks!) and an afternoon looking out at darkening skies and falling rain has meant a focus on some desk-based work instead making sure I kow what to do out there in the field. Maybe tomorrow is the time for action (to fuse my 1970s/1980s mod bands) – although #SaturdaysForThePast does have a bit less of a ring to it 😉