The British government has revealed that spectrum freed up as part of the digital dividend could be auctioned off before the end of 2010 with a view to the frequencies being used commercially by 2012, ZDnet reports.

Proposals for the spectrum were sent from the Department of Business, Innovation and Skills (BIS) to telecoms regulator Ofcom early last week, detailing plans for several spectrum bands including 800MHz, 900MHz, 1800MHz, 2100MHz and 2600MHz.

A number of changes have been made to original proposals put forward by Kip Meek, a former senior official at Ofcom, in May 2009, following both feedback from a consultation on the plans, alongside the impact of the recently approved merger between mobile operators Orange UK and T-Mobile UK. The key alterations made include a requirement that successful bidders for two spectrum lots in the 800MHz band roll out coverage equalling 99% of the UK population, while the proportion of spectrum that any individual operator can own has been increased, from 2x60MHz to 2x90MHz. Additionally, existing 2G frequencies will also be usable for 3G and 4G, while licences are expected to become indefinite and tradeable.

Commenting on the proposals, Stephen Timms, Digital Britain Minister, said: ‘We have listened carefully to the views put forward during our consultation and have made appropriate changes, taking into account the interests of both industry and consumers. The release of new spectrum will speed up the realisation of next-generation mobile broadband, benefitting mobile users across the country.’

Meanwhile, the Financial Times is reporting that O2 UK and Vodafone UK are considering legal action over the proposals which could delay any timetable for any auction.