According to John-Eivind Velure, head of the frequency planning section at NPT, the auction went smoothly. “The website functioned well, there were no technical issues, and when towards the end of the auction the rate of activity increased to several bids in the final seconds the site handled it very well. In fact the closing time was extended several times to allow the bidding to run its course.”

I believe that this could have application for other countries interested in assigning a single license quickly and efficeintly.

Erste MVV Mobilfunk Vermögensverwaltungsgesellschaft mbH (E-Plus)

Telefónica O2 Germany GmbH & Co. OHG

T-Mobile Deutschland GmbH

Vodafone D2 GmbH

The auction is scheduled to begin on 12 April. Links to the auction rules can be found on the KB spectrum auction calendar.

The idea of giving incumbents financial incentives to relinquish their licenses so the spectrum could be put to other uses is nothing new at the FCC, which has long sought a way of reclaiming unused or underused spectrum licenses. Money talks, so the most logical incentive always seems to be cold hard cash. The idea of paying licensees to move off of their spectrum was the topic of a 2002 FCC “working paper” by Evan Kwerel and John Williams titled, “A Proposal for a Rapid Transition to Market Allocation of Spectrum.” The authors put forth the idea of band restructuring by allowing incumbent licensees “to keep the proceeds from the sale of their spectrum.” It seems the timing couldn’t be better because the Chairman is now proposing that incumbents keep a yet-to-be-defined “share” of auction proceeds.

Of course nothing is as simple as it seems. The logic and mathematics behind a combinatorial two-sided exchange can be very complex. Dr. Karla Hoffman and Dinesh Menon have a paper in the forthcoming March 2010 issue of the Journal of the Institute for Operations Research and the Management Sciences in which they describe a practical combinatorial clock exchange for spectrum licenses. Their work grew out of ideas we developed at the FCC in 2007, and the FCC went so far as to build a software prototype of such an exchange for testing purposes. To date no test results have been released, but the idea of a spectrum exchange has clearly moved from that of a policy think-piece to a piece of software, and with the nod from the Chairman, it could become reality in the coming years. The auction mechanism would facilitate a voluntary transition of broadcast spectrum, and any other spectrum for that matter, to the mobile carriers who have a bottomless appetite for the stuff.

FOR BIDDERS
This three-day course is designed to allow operators who plan to participate in upcoming spectrum auctions the unique opportunity to participate in simulated auctions before the actual auction. This lab opportunity allows bidders to test their strategies in a simulated environment using software that can be set up to follow various leading auction designs and bidding rules. When it comes to spectrum auctions, knowing the rules is not enough. During the simulations your team will learn how to effectively participate in the auction and potentially save millions. Saving a single increment in the auction can mean a 10-20% savings for valuable spectrum. Instead of sitting around a conference room talking about “what ifs”, why not simulate the scenarios and refine your strategy before the auction using software that implements the specific rules established by the regulator.  Download the course description here:  Spectrum Auction Training for Network Operators

FOR REGULATORS
Spectrum auctions are used around the world to assign licenses for commercial spectrum. Beginning in the late 80’s countries began to transition away from using licensing processes based on comparative technical criteria and moved to auctions to award spectrum to the entities that value the licenses most highly (and will therefore put it to its highest use).

With the Internet, spectrum auctions can be simple and straightforward for regulators to conduct and just as easy for bidders to participate in. However, getting the auction design just right to avoid issues such as collusion and strategic gaming can be difficult, and providing bidders with simple and straightforward rules to follow can be equally problematic.  This three-day course will encompass training sessions for the unique auction design issues that regulators face as well as hands-on auction simulations to allow you to experience spectrum auctions in real-time.  Download the course description here: Spectrum Auction Training for Regulators.

If you are interested in group training at the LStelcom facilities, or to schedule private training sessions on-site, please contact us by clicking here.

So far this doesn’t seem different from the plans that many other countries have for auctioning spectrum.  The troubling part of the Mexican auction case, though, is that in order to get the qualification criteria and the auction rules you have to pay 20,000 pesos (about US$1,500) for the document.  Crazier still is that you have to do it by 8 January (remember, this was released on 6 January!) and have to do it in person in Cofetel offices in Mexico City in the hours between 10am-2pm and 3pm-6pm.

Putting these hurdles in place (having to pay to get the rules, having 3 days to do it, having to do it in person during limited office hours) goes against every best practice developed in spectrum auctions around the globe.   This lack of transparency can only lead to a less competitive auction, which favors entrenched incumbents and does nothing to reduce consumer prices.

The FCC’s decision to outsource this database will save the taxpayers millions of dollars (the FCC spends over $20 million per year to maintain their current spectrum management systems).  In addition, having private enterprises administer the database will promote competition, lower prices and encourage innovation.

The use of white spaces is a step toward alleviating some of the tremendous demand for spectrum that wireless carriers have today.