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Spectrum auctions potentially raising entry barriers
The allocation of spectrum rights is typically orchestrated by means of an auction.◊ ◊Mobile operators bid against each other to obtain the best possible combination of spectrum rights.◊ ◊The amounts eventually paid for these rights often seem very high (several billions) and may raise concerns about auctions (unnecessarily) creating/raising entry barriers.
Organising auctions is a complex issue and does not guarantee a most efficient outcome (see •{1}•).◊ ◊A potential solution to correct these inefficient outcomes is to allow rights holders to trade spectrum in a secondary market.◊ ◊Radio spectrum is however a lumpy good, because it is bought and sold in blocks of frequencies, which lowers market liquidity.◊ ◊So far, the experience with secondary markets is that they do not work•{2}•.◊ ◊Most spectrum rights are traded through mergers and are thus subject to merger control.◊ ◊The latter is not surprising since selling radio spectrum renders the network equipment useless and hence requires selling the equipment;◊ ◊this practically means selling the entire company•{3}•.
See Van Gorp et al (2012).
In the UK there has been one application for >>>>>clearing a trade in spectrum rights>>>>>>.◊ ◊This involved a merger. see •{1•http://stakeholders.ofcom.org.uk/spectrum/spectrum-trading/a...•1}•