Are Spectrum auctions last season?

The distribution of spectrum bands has always been quite an important topic for regulators and telecommunication companies. With the transition to the new digital era, which the onset of the global pandemic has also boosted, this issue has become more acute than ever. Technology is evolving, 5G is becoming available to more and more users worldwide, and countries and their telecommunications companies are keen to make it available to their citizens/users as soon as possible.

In this regard, there is more and more criticism in the community towards the gold standard format of spectrum band distribution through auctions. The reasons for complaint are many: some blame auctions for excessive complexity and artificial overpricing of licenses. In contrast, others blame them for their duration and the risks of ending up in an endless bidding loop. It is difficult for us to disagree with these arguments. Why, then, only in the next 3-4 years more than 32 spectrum auctions are planned? In our opinion, it is connected with the undoubted advantages of this format:

  1. Transparency of the allocation process, which is essential for the regulator.
    Thanks to the format of auctions, the regulator can assure the public that they minimise the risks associated with corrupt cooperation between the regulator and telecommunications companies and the possibility of contractual market division between companies. Our Electronic Auction System ensures the anonymity of bidders, the ability to monitor and control actions of bidders and auctioneer in case of legal precedents.
  2. The avoidance of monopolies of the major telecom companies.
    There is a possibility of imposing restrictions within the auction rules and allowing the regional operators to secure their interest markets. The regulator can impose automatic limits on the number, nature and geographic location of spectrum bands that participants can win, including in the EAS.
  3. The objectivity of the allocation of the bands is based on market laws.
    Grammarly designed auction ensures this factor. As a rule, auctions are designed by professionals in the field who are well versed in various aspects of auction formats and design the auction based on the scientific works of scientific economists, including Nobel laureates like Stanford economists Robert Wilson and Paul Milgrom.
  4. Possibility to optimise the process by using secure electronic auction systems.
    Digitalisation can significantly simplify the organisation of the auction for all its participants, making it more comfortable, convenient and minimising the factor of human error. Our team is constantly improving usability for our users, allowing them to conduct auctions in the smoothest way possible.

No system is perfect, so spectrum auctions are likely to continue to be criticised in the future. But thanks to this criticism, this sphere continues to develop and allows us to discuss it in the Internet environment. EAS team will continue to do our best to ensure that as many auctions as possible run smoothly and efficiently.

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