Frequency auction
A frequency auction is a process by which a government uses an auction to sell rights (licenses) to transmit signals over certain frequency ranges of the electromagnetic spectrum . Depending on the specific auction format, a spectrum auction can take anywhere from one day to several months from the opening offer to the final bid. A well-designed auction will efficiently allocate resources to the parties who value them most, while the government will secure the revenue in the process. Frequency auctions are a step towards market-based frequency management and the privatization of public broadcasting frequencies. They enable governments to manage scarce resources. Alternatives to auctions include administrative licensing such as the comparative hearings that have historically been conducted (sometimes referred to as "beauty pageants") or lotteries. However, these alternatives have problems in achieving an efficient allocation, especially when information is asymmetrically distributed.
General
According to Peter Cramton, the usual goals of such state auctions are efficiency, transparency, simplicity and fairness. Frequency auctions are efficient when the spectrum is put to its best use. On the other hand, it is short-sighted when states want to generate high auction revenues by creating monopolies . Simplicity requires clearly defined rules on the basis of which a bidding strategy can be developed. It is also used for efficiency, because simple rules enable bidders to better express their preferences. Transparent auctions are characterized by clear rules on how bids lead to results. Published information should serve to depict supply and demand without promoting collusion . For this purpose, they can be anonymized, for example. For an auction to ultimately be fair, all bidders must be subject to the same rules and must also know these rules. If the starting situation of an auction is particularly complex, its design must be adapted accordingly. Possible aspects that should be taken into account include the risk of concentration, regional competition (which requires regional licenses), different business plans or technologies of the bidders, interference with neighboring spectrum or the fact that the spectrum in question is still used by others (state or private) owners. If spectrum packages are also complementary, bidders want to bid on packages that complement each other. This also complicates the auction design considerably. It is also of great importance how the licenses are tailored, i.e. which frequencies and regions they cover, for which period they apply and what restrictions there are.
innovation
In the past ten years, telecommunications has become a highly competitive industry in which companies compete to buy valuable frequencies. This competition was triggered by technological advances, privatization and liberalization. Mobile communication in particular has been changing rapidly since 2000. Mobile technology has transitioned from the second generation (2G) to the third generation (3G) to the fourth generation (4G) and is currently in transition to the fifth generation technology (5G).
With more providers in the mobile communications industry, competition in frequency auctions has increased due to increased consumer demand. When the United States made the transition from analog to digital television broadcast signals in June 2009, the valuable 700 MHz spectrum became available because it was no longer used by analog TV signals. In 2007, search giant Google announced that it was entering the cellular business with its hugely popular Android operating system and plans for a mobile broadband system. Google stated that they had planned to place a bid for the "C" block of the frequency auction, which would cover channels 54, 55 and 59 of the lower 700 MHz spectrum and channels 60, 61, 65 and 66 of the upper 700 MHz spectrum correspond. These are typically used to build nationwide broadband services. Around the time of Google's announcement, AT&T and Verizon also announced plans to participate in the frequency auction to purchase the "C" block spectrum.
Auctions in Germany
- Auction of UMTS licenses
- Frequency auction 2010 as part of the "digital dividend"
Individual evidence
- ↑ a b Peter Cramton: Spectrum Auctions, Ch. 14 . In: Handbook of Telecommunications Economics . February 2001, pp. 605-649.
- ^ Peter Cramton: Market Design in Energy and Communications . In: Handbook of Telecommunications Economics . April 2015.
- ↑ Gerhard Illing and Ulrich Kluh (ed.): Spectrum Auctions and Competition in Telecommunications . The MIT Press, Cambridge, Massachusetts 2003.
- ^ What you need to know about the digital tv transition . United States Government. Accessed January 31, 2018.
- ^ A b Brad Stone: Google to Join Spectrum Auction . In: New York Times , December 1, 2007. Retrieved January 31, 2018.