Key broadband deadline missed

Groups remain in talks to deliver 'Digital Britain'

Government arbitrators have missed the deadline to settle a dispute between the largest mobile phone operators in the UK, over the plan to deliver broadband to every household in the country. Sources close to the deal said that while progress had been made, at least one of the major players is still at odds with its rivals.

The dispute focuses on calls for Vodafone and O2 to share their most lucrative mobile broadband spectrum with rivals Orange, T-Mobile and 3.

The move would help all operators to expand their mobile broadband coverage, a core part of the Communications minister Lord Carter's plan for universal broadband in Britain.

Yet Vodafone and O2 have been unwilling to give up their spectrum without a fight. Lord Carter, who is to finalise his broadband plan next month, appointed the consultant Kip Meek to act as arbitrator between the companies. He imposed a deadline of the end of April for consensus, and said he would impose proposals from the regulator, Ofcom, if it was missed.

The deadline passed on Wednesday with no announcement from Mr Meek or the Department for Business, Enterprise and Regulatory Reform. A spokeswoman for the department said the conversations with the industry were ongoing, and played down the importance of breaching the deadline. She said the talks "have thrown up some interesting and positive ideas," and Mr Meek should report "in the near future". Lord Carter is unlikely to call on Ofcom yet, she added.

It is understood that some companies are waiting to hear back on their proposals, but all want a consensus to be reached. One said the issue has been a "white elephant for the industry for ages, and now it is suddenly on the desks of the senior people. We don't want to miss the opportunity to get it right".

In the 1980s, the Government granted Vodafone and O2, then BT, the lucrative 900Mhz bandwidth. There was not enough space for later entrants Orange, 3 and T-Mobile, who were handed the higher 1800Mhz frequency. The 900Mhz is much cheaper and more efficient, which would help the smaller operators to service regions that currently find it hard to access broadband.

The Government has offered the smaller groups left over spectrum after the digital television switchover in 2012, but the companies complained that it would not be operational until 2014.

If O2 and Vodafone do not give up any of the spectrum they could be excluded from that spectrum auction.