I think there are two 'clear' ways this auction should be conducted.

Either:

A) Spectrum is made into 4 bundles (or however many networks the regulator basically wants in the UK, I assume 4), and each organisation can only successfully own one of them. Alternatively, make that 8 bundles (high and low frequency) and restrict ownership to one of each so operators have a tad more control over what frequencies they end up with (mix and match a high and a low). Auction, go.

B) Scrap the auction process altogether and award spectrum on merit. Form an independent committee that receives applications and business plans from all interested parties, which then allocates spectrum by return. Charge an annual fee for the spectrum allocated at 'market rates' to be determined by the government, which would essentially amount to a tax on the mobile industry but remove some of the massive upfront fees. It would also mean the licenses are easier to redistribute in future if necessary.

I'm not entirely sure what Ofcom's current process is designed to achieve. They seem to have listened far too earnestly to the stakeholders and as a result greatly overcomplicated matters.