3. What is spectrum auction
A formal auction run by the Federal
Communications
Commission (FCC) for licenses of the
electromagnetic spectrum that are open to any
eligible company or individual that has submitted
and been approved by the Commission.
4. Why need spectrum auction
spectrum auction is a process whereby a
government uses an auction system to sell the rights
(licenses) to transmit signals over specific bands of
the electromagnetic spectrum and to assign scarce
spectrum resources.
5. What are spectrum licenses?
A broadcast license is a type of spectrum license
granting the licensee permission to use a portion of
the radio frequency spectrum in a given
geographical area for broadcasting purposes. The
licenses generally include restrictions, which vary
from band to band.
7. Advantages and disadvantages
A well-designed auction is the method most likely to
allocate resources to those who can use them most
valuably. Rather than rely on government to assess the
merits of competing firms' business plans, an auction forces
businessmen to put their "money where their mouths are"
when they make their bids.
An auction is more transparent, and gives rise to less
political controversy when compared to other allocation
mechanisms, since there is no room for subjectivity in
assessing whether an undertaking accomplishes criteria for
allocation (unlike a beauty contest or the direct allocation
of a license).
Auctions usually raise important sums of money provided
there is competition among many bidders.
8. Bidding
Auction bidding will run in
a sequence with the
schedule for the sequences
being given out before the
auction starts. This year's
spectrum auction will be
conducted over the internet
and over the telephone.
Qualified bidders will
receive access to the toll
free number for the bidding
hotline.
9. What does it mean for the winners and losers?
While the winners get the
exclusive right to use the
spectrum, those who have
lost the bid in that area will
not be able to get subscribers
in the area where they do not
have a license. However, if a
consumer has a connection
of the particular telecom
operator and travels to an
area where the operator is
not present, he will be
charged interconnect user
charges.
