Cases & Deals

E-Plus prevails in litigation concerning German 4G spectrum auction

Clients E-Plus Mobilfunk GmbH & Co. KG

Jones Day represented German mobile operator E-Plus Mobilfunk GmbH & Co. KG before the highest German Administrative Court (Bundesverwaltungsgericht; BVerwG) in litigation concerning the 4G spectrum auction, resulting in the first ruling by the Bundesverwaltungsgericht regarding issues concerning auction of spectrum under German telecommunications law.

In 2010, the Federal Network Agency (Bundesnetzagentur) auctioned spectrum for 3G/4G mobile use, including frequencies of the so-called Digital Dividend. Bids in the auction totaled €4.38 billion, and all four German mobile operators (T-Mobile, Vodafone, E-Plus, and O2) acquired spectrum in the auction.

On behalf of E-Plus, Jones Day had filed an action prior to the auction in the Administrative Court, challenging the decision to auction the spectrum and the auction rules. E-Plus argued, inter alia, that the frequencies ought not to be allocated by way of an auction since the auction rules did not sufficiently consider the historically differing frequency spectrum of the four mobile network operators in Germany. After this action was dismissed by the Administrative Court in March 2010, the auction took place in April and May 2010.

The appeal to Bundesverwaltungsgericht against the lower court's decision resulted in the remand of the case to the Administrative Court for further investigation and clarification of the facts relevant to the decision. The central issues of concern were i) whether there had been sufficient demand for new frequencies to require an auction procedure, and ii) whether and to what extent frequencies had been allocated in the past outside an auction procedure in the same relevant product and geographic market. These issues are of vital importance to the question of whether an auction is the suitable procedure for allocating the spectrum (BVerwG 6 C 6.10 - judgment dated March 23, 2011). The Bundesverwaltungsgericht decision also confirms that essential assumptions and decisions of the Federal Network Agency with respect to the allocation and auction of mobile frequencies are subject to judicial review.

Jones Day has advised E-Plus Mobilfunk GmbH & Co. KG since 2005 in the areas of telecommunications and antitrust law and, in particular, with respect to issues of frequency allocation and frequency management.

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