ACMA reveals 700MHz and 2.5GHz spectrum auction plans

Stuart Corner
Tuesday, 20 September 2011 05:07

IT Policy - Regulation

The ACMA is planning to use a combinatorial clock auction for the sale of 700MHz digital dividend spectrum and the 2.5GHz spectrum presently used for TV outside broadcast relays: both expected to be highly sought after to meet burgeoning demand for mobile broadband capacity.

According to the ACMA this process "will allow bidders to bid on packages of spectrum in both the 700MHz and 2.5GHz bands, offering them the opportunity very importantly to acquire the specific combinations of spectrum which best meet their business needs."

The ACMA claims that: "The combinatorial clock auction is well suited to auctions where the value of an individual lot to a bidder depends significantly on what other lots that bidder can acquire. The winning bidders then are those that make the highest value combination of bids."

Both bands are allocated to LTE and for mobile broadband operators the combination of frequencies is highly sought after because the higher frequency gives greater capacity and the lower frequency greater range.

According to the ACMA, the packages will not be predefined. It will segment the spectrum into blocks (paired for transmit and receive) by frequency and geography. It will then be up to the bidders to put together packages they want and to bid on these. At the end of the process the ACMA will work out which bids represent the optimal return.

An ACMA spokeswoman said: "The auction system takes all of the bids and works out what is the highest value combination of bids by all parties and those are the winners '¦ And there is a rule that says they can only win one of the packages they are interested in."

Working out the winning bids will be no mean feat. According to Wikipedia, "Combinatorial auctions present challenges compared to traditional auctions. Some challenges are computational, some economic, and some hybrid. An example of a computational problem is how to efficiently determine the allocation once the bids have been submitted to the auctioneer. This is called the winner determination problem.

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