Ascending price 

Simultaneous ascending price auctions

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 have been demonstrated to be 

effective where a number of licences are to be awarded and they cover, for 

example, different geographic areas.  In this case there are a number of 

sequential rounds of bidding and each bidder must increase the previous bid 

on a  lot  by more than a pre set amount.  When there is no more bidding the 

auction ends and the bidders with the highest bids on each  lot  will be the 

winners.  The fact that bidders can see how their opponents are bidding and 

derive information on how they value spectrum in the different geographic 

areas will allow them to win more efficient allocations than might happen in a 

sealed bid.  Ascending price auctions are also ideal for conducting through 

electronic means. 

The down side is the potential for collusion.  Measures can be taken to avoid 

collusion such as ensuring bids can only be in  round  numbers (in some 

cases the final digit in the bid can be used to convey a  signal  to other 

bidders). 

Others 

Sealed bid 

Sealed bid auctions involves each bidder only making one single offer.  They 

are more attractive to new entrants than the ascending auction as there is 

always the possibility that they might outbid an incumbent who has under 

estimated the value of the spectrum. 

Anglo Dutch 

This is a mixture of the two auction types above.  Initially there is an 

ascending price auction and then when the number of bidders has been 

reduced to one more than the number of licences available

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 there is a 

sealed bid.  The sealed bid has to be the same or more than the final price 

reached through the ascending auction. 

Reserve prices 

It is important that the reserve prices are set at a level that ensures the 

spectrum cannot be won cheaply and successful bidders pay near the 

expected market price. The following options exist to set reserve price 

i) 

Based on an estimate of what would have been the fees paid using 

Administrative Incentive Pricing. 

ii) 

Based on market indicators  

An alternative approach is to attempt to set levels based on market 

indications, such as the prices paid at auction in comparable frequency bands 

and geographic territories, however such prices are subject to wide fluctuation 

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 For example ascending price auctions have been used in the US, Canada, Australia, UK, Germany 

and Austria. 

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 The licences would need to be in the same geographic area. 

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