Spectrum Auctions. Designing markets to benefit the public, industry and the economy

Abstract:

Access to the radio spectrum is vital for modern digital communication. It is an essential component for smartphone capabilities, the Cloud, the Internet of Things, autonomous vehicles, and multiple other new technologies. Governments use spectrum auctions to decide which companies should use what parts of the radio spectrum. Successful auctions can fuel rapid innovation in products and services, unlock substantial economic benefits, build comparative advantage across all regions, and create billions of dollars of government revenues. Poor auction strategies can leave bandwidth unsold and delay innovation, sell national assets to firms too cheaply, or create uncompetitive markets with high mobile prices and patchy coverage that stifles economic growth. Corporate bidders regularly complain that auctions raise their costs, while government critics argue that insufficient revenues are raised. The cross-national record shows many examples of both highly successful auctions and miserable failures.

Drawing on experience from the UK and other countries, the author explains how to optimise the regulatory design of auctions, from initial planning to final implementation.

Table of Contents:

1. Preface
2. Introducing spectrum auctions
3. Understanding the radio spectrum, auctions, and the UK case
4. Market design, economic efficiency, and game theory for spectrum auctions
5. Regulation, public value, and policymaking
6. Applying expertise in decision-making processes
7. Laying foundations before the auction
8. Auction design objectives and baseline decisionsChoosing an auction format
9. Promoting downstream competition
10. Harnessing auctions for better-informed public policy decisions
11. Auction bidding and outcomes
12. Afterword: Reflections for future auctions
13. Annex A: Further details of the UK’s spectrum auctions, 2000–21
14. Annex B: Further explanation of the Combinatorial Clock Auction (CCA) format and bidding in the UK’s 2013 auction
15. Annex C: Additional explanation of the cost-benefit role of auctions

London School of Economics (LSE): EUROPP Blog, 20/02/2023: Spectrum auctions in Europe: The good, the bad, and the ugly https://blogs.lse.ac.uk/europpblog/2023/02/20/spectrum-auctions-in-europe-the-good-the-bad-and-the-ugly/

---