Digital Economy Bill Communications provider Ofcom has gained powers to fine mobile operators up to £2m if they fail to comply with coverage obligations under their spectrum licence.

The new penalties will be introduced under the 150-page Digital Economy Bill, which significantly boost the regulator's powers.

The Bill granted the regulator powers to fine operators up to 10 per cent of their "relevant amount of gross revenue", which it said should not exceed £20,000 per day.

The measures will provide Ofcom with a tool to help secure compliance with licence conditions in cases where the alternative is to revoke their licence. For example, if a mobile operator failed to meet a coverage obligation in its licence, it might be a worse outcome for consumers to revoke the licence than to leave the licence in place.

A spokesman from Ofcom said the bill includes a package of reforms that will give the operator more flexibility "to manage and ensure optimal use of spectrum – the vital but finite resource that underpins wireless communications services.”

He added: “At the moment, when a provider breaches its licence, in most cases our only sanction is to remove the licence completely, or launch criminal proceedings. The bill would allow Ofcom alternatively to impose financial penalties, which may in some cases be a more proportionate means of securing compliance.”

Among other things covered in the Bill is a legal right to fast broadband. In an accompanying document, the government explained why it had not specified the minimum rate of 10Mbps in the regulation as previously indicated.

The speed will be specified in regulations to allow it to be updated "when necessary." It said: "Regulations can be updated in a much shorter timescale than a new bill, which can take a year before it can be brought into force."

In his foreword to the section on Ofcom powers, digital minister Ed Vaizey said: "This bill contains a number of significant measures that will strengthen Ofcom’s role as a regulator.

We are allowing Ofcom greater flexibility and independence to ensure better regulation across the communications sector.” ®