In January 2008, OFCOM announced that the Government, via the Ministry of Defence, could sell off its 75% holdings in spectrum radio frequencies to the private market.
Government, its agencies and other public organisations including the Ministry of Defence (MoD) will be able to share, trade or release their considerable radio spectrum holdings under new plans announced by Ofcom.That's a lot of money and is on a par with the amount of money the Treasury gained from the sell off of licenses for the 3G mobile networks in the late 1990s. However, how much of this estimated £3bn to £20bn will the MoD see?
Ofcom expects the arrangements to free up some of the most valuable spectrum for new wireless services for the benefit of citizens and consumers. This will enable the key public users such as the MoD to trade their spectrum holdings and acquire new spectrum in the market.
Public bodies use around half of the radio spectrum below 15 GHz – the most sought after and congested frequencies. An independent study published in 2005 estimated that the spectrum held by the public sector could have a market value of between £3bn and over £20bn.
In a recent memo from the MoD to the Defence Select Committee the MoD confirmed that it was only going to be allowed to keep £500 million in receipts from the sell-off.
The memo states that the level of receipt is "commercially sensitive" which suggests two possibilities.
Either, we are going to see another gold debacle where Brown allows something valuable to be sold off at the bottom of market, thus screwing over the funding of the Armed Forces at a time when they really need it.
Or, the MoD has been told by the Treasury that it can soin for the money and its only getting 16% of the minimum £3bn whilst the Treasury takes the other £2.75bn for itself (presumably to plug its black holes). Thus screwing over the funding of the Armed Forces at a time when they really need it.
Of course, if the market decides its worth a figure like the top-end estimates of £20bn that represents even more money the Armed Forces lose in the deal. Thus screwing over the funding of the Armed Forces at a time when they really need it.
The recurring theme here is simple isn't it? Brown and his Government are planning on shafting the Armed Forces out of potential billions in funding. The Military Covenant is ignored once more.
UPDATE: This issue has also been raised in Parliament, although sadly via an Early Day Motion (parliamentary graffiti) so no bugger has really paid attention.