The auction of licences in the 28GHz radio spectrum to provide broadband fixed wireless access has come under fire for helping to create a "broadband underclass".
David Harrington, director general of the Communications Management Association, said, "Because operators are bidding for licences in areas where they know they will recoup their costs, they are bidding in areas where there is already fixed broadband access. Other areas - such as rural areas - are going to find themselves becoming a broadband underclass."
This could leave businesses outside the UK's major cities struggling in e-commerce as they are deprived of broadband Internet access.
"The Treasury's auction model is not designed with concern for the consumer uppermost," Harrington said. "This contrasts with the 'beauty contest' model, where bids for licences are based on factors such as roll-out plans and quality of service guarantees."
As bidding closed on 20 November, the auction had failed to raise the forecast £1bn for the Treasury - bids totalling £38.1m had been registered.
Fixed wireless services will provide broadband Internet access at speeds exceeding 2 megabits per second via radio aerials at users' premises.
Users in remote areas had expressed the hope that fixed wireless access would bring broadband services to areas being neglected by fixed access providers. At the time of going to press, however, eight regions out of the 14 on offer to providers had not received any bids.
A Radiocommunications Agency spokesman blamed the lack of interest in rural region licences on the characteristics of the frequency range on offer. "There are plans to release other parts of the wireless spectrum, such as 40GHz, which is better suited to rural areas than 28GHz. The Government's aim is to make sure we have a broadband Britain. We are determined to make sure everyone has access."
However, Harrington said telecoms suppliers were not waiting for 40GHz service to bid for rural areas, and that the availability of this frequency would not in itself solve the broadband underclass problem.