5.8.2.1.    Spectrum is equally distributed 

This approach has the advantage of being fair but does not take into account 

any relative efficiencies of utilisation. Therefore, there would be no incentive 

to use the spectrum efficiently. Also, it may result in lesser allocation to 

operators who need it the most and in turn impede their growth. This 

methodology is more suited if all players grow at equal pace and have similar 

need for the resource. In event this approach is chosen, one way of dealing 

with this issue is to impose price based mechanism that deter hoarding of 

spectrum together with spectrum cap. Also, the spectrum could be reserved 

but not allocated until technical efficiencies are met. 

5.8.2.2 

Spectrum is allocated through a competitive mechanism 

For this purpose, the existing spectrum could be divided in usable blocks and 

then awarded through a competitive mechanism i.e., a beauty contest or an 

auction. A comparison of the two approaches is as follows: 

5.8.2.2.1 

Comparative selection (beauty contest) 

Beauty contests.  These involve evaluating each application against a 

number of pre defined criteria, which may include operational commitments 

such as coverage, service quality or tariffs and in some cases may also 

include a financial element.  Beauty contests were used to award the majority 

of GSM licences in Europe and around half of the 3

rd 

Generation (3G) mobile 

licences.  Key issues in the design of comparative selection procedures are 

the criteria used to choose the winning applicant, the precision and 

transparency of the criteria (i.e. publication in advance of the tender), the 

weighting given to different criteria and the transparency of reasons for the 

final decision. 

The disadvantages of such an approach are the difficulties of specifying and 

evaluating the criteria and the potential for legal controversy, litigation and 

subsequent delays in the use of the radio spectrum.  For example, the award 

of the third GSM licence in Ireland was delayed by over a year as a result of a 

legal challenge, even though this was ultimately rejected by the courts.  If 

comparative selection processes are objective, transparent and non 

discriminatory, then many of their disadvantages can in principle be 

overcome.  In particular, if measurable criteria are used with an explicit 

weighting system then the  amounts  bid can be written into licences and the 

winning bidder should be the applicant that best fulfils society's objectives (as 

defined by the REGULATOR or Government). 

There have been some cases, where the criteria used to assess the original 

tenders have been relaxed by the REGULATOR at a later date without the 

imposition of penalties, or difficulties have arisen in measuring performance 

against criteria, where these cannot be measured in a quantifiable way.  

There are also cases where tenderers make commitments that they have no 

intention or possibility of realising as the markets develop.  It is therefore 

important to ensure, prior to the submission of tenders, that all participants are 

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