- December 18th, 2018
SPECTRUM AUCTIONS
BACKGROUND INFORMATION
Everyone in the world deals with spectrum on a daily basis. Television signals, cell phone signals, wireless internet signals, radio stations - everything travels on spectrum. The problem facing every country is to how to allocate these slices of the spectrum to companies for them to use. Allocation must be done efficiently, fairly and in compliance with the laws of the land in order to create a smooth market-driven process. This is where auctions come into play.
The spectrum auction notion has been around for a long time, long before the Internet. It's long been established that the best market-driven way to allocate spectrum is to use auctions. The United States' FCC has been at the forefront of spectrum auctions since their inception. Additionally, the FCC has developed new auction types for dealing with spectrum auctions, and have created rules and variations over the years to address specific needs.
TYPICAL AUCTION FORMATS
SMR Auctions proceed on a round-by-round basis, where each product is sold as individual products. Each round, including the opening round of the auction, each product has a set price, the "going price". Bidders decide whethey would like to bid on the product with a simple "yes" or "no", and are not required to enter any prices. If there are more than 1 bid on any product, the auction continues to another round, with the prices of the products increasing each round. The auction continues, and prices increase, until there are only 1 bidder on each product. At this point, supply equals demand, and the auction can end and the winners can be declared.
- Easy to Set-Up for Regulators
- Easy to Understand for Bidders
- Provides an Efficient Allocation Fairly
- Ideal for Countries Where Spectrum is For Specific Regions-Only
Clock Auctions proceed on a round-by-round basis, where products are split into smaller "blocks", or slices. Each product in the auction has a set quantity of blocks. Each round, including the opening round of the auction, each product has a set price per block, the "going price". Bidders make two decisions in this auction format: whether they will bid on the product at this price, and how many blocks they will bid on at this price. If the total number of blocks bid on a product is greater than its quantity, the auction continues to another round, with the prices of the blocks increasing each round. The auction continues, and the prices increase, until there are equal or less than number of bids than each product's quantity. At this point, supply equals demand, and the auction can end the winners can be declared.
- Easy to Set-Up for Regulators
- Easy to Understand for Bidders
- Oftentimes Requires a Supplement Round for Assignment of Blocks
- Ideal for Countries Where Spectrum Covers Entire Nation
Combinatorial Auctions behave much like a Clock Auction, with each product split into smaller blocks, and proceeds on a round-by-round basis until the supply equals demands. However, in this auction format, the auction does not end once this happens. Instead, there is an extra round of bidding during this supplemental phase, during which the bidders can enter one final bid based on the final prices of the blocks. Once these final bids have been entered into the system, the auction software groups each bidder's bids per round into packages, and then examines all the packages placed during the auction and supplemental phase using a Vickrey algorithm to determine the final outcome.
- Complicated for Regulators to Set-Up
- Harder to Understand for Bidders
- Maximizes the Revenue for the Regulator
- Most Efficient Allocation for Bidders
- Ideal for Large Countries
SPECTRUM AUCTION PROJECTS
SUTEL SPECTRUM AUCTIONSCosta Rica
Multiple auction formats including Single-Round Sealed Bid and Clock Auction to sell multiple frequency blocks of spectrum
IFT SPECTRUM AUCTIONMexico
A Clock Auction format auction to sell 2.5 GHz spectrum blocks.
IMDA SPECTRUM AUCTIONSingapore
A Multi-Band Clock Auction format auction to sell 700 MHz, 900 MHz, 2.3 GHz, and 2.5 GHz spectrum blocks.
CITC SPECTRUM AUCTIONSSaudi Arabia
A Sealed Bid Combinatorial Auction and Clock Auction format auctions to sell 700 MHz, 1800 MHz, and 800 MHz spectrum blocks.
IFT SPECTRUM AUCTIONMexico
A Combinatorial Clock Auction format auction to sell AWS spectrum blocks.
CHOOSING OPTIMAL AUCTIONS
As the world continues to expand its use of mobile data usage, the sale of spectrum is becoming more and more critical to the successful business workings of an entire country. With this level of importance, you must trust a company that has run successful spectrum auctions time and again.
We would be incredibly happy to show you a demonstration of our software. We are confident that once you see how the software works, and how easily it controls every aspect of your auction, you will never go back to using an Excel spreadsheet. Our software takes care of everything you could imagine - exact timing of rounds, ensuring bids are received in time, ensuring bids adhere to eligility rules, and thousands of other things. Plus, it runs right in your browser, so anyone with a desktop, laptop, or even a smartphone can use our software.
We will be happy to talk with you about your auction software needs, and will help answer any questions you might have. We know that our spectrum software is the best the world.
Who We Are
We are responsible for a wide range of auctions for national governments and private corporations - everything from pricing 10% of the world's diamond supply to billions of dollars worth of electricity in for states in the United States.
When you are running the most important auctions in the world you have to choose the best auction software provider in the world, Optimal Auctions.
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- Multiple Auction Formats
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