The 5G spectrum auction in Chile

In 2021, the Chilean government implemented a first-price package auction to allocate electromagnetic spectrum for 5G mobile services. The auction was run sequentially for different spectrum bands, allowing firms to exploit band complementarities. It was a combinatorial auction, so firms could bid for any combination of blocks within a band. It contemplated spectrum caps – upper limits on the spectrum for each firm – to ensure competitiveness. The beauty contests used in previous processes became obsolete, as there was a need to promote competitiveness and transparency in the telecommunication sector. Four incumbents and one potential entrant participated in the auction. The auction raised more than USD $450 million, which was six times more than the sum of the revenues of all previous contests in the country. We discuss this experience and show how different aspects of the context justified our design choices.     

The evolving 5G case study in spectrum management and industrial policy

Even before the International Telecommunication Union (“ITU”) reaches consensus on spectrum allocations for fifth generation wireless technologies (“5G”), commercial ventures scramble to offer new equipment and services. Expediting 5G wireless service can benefit consumers and businesses at the risk of stressing the traditional process of spectrum planning that combines study, dialogue and consensus building at ITU conferences.This paper explains why most nations refused to endorse key United States 5G spectrum allocation proposals at the ITU’s, 2015 World Radio Conference. U.S. representatives underestimated the time needed for consensus building, despite increasing demand for wireless video and the evolving Internet of Things. Other contributing factors include U.S. support for treating spectrum like property, use of “incentive auctions” to clear broadcast television spectrum with unprecedented speed and enough existing wireless spectrum allocations in most nations.The paper concludes that the U.S. cannot expect faster frequency reallocations, particularly when it and other nations pursue matters having little to do with spectrum optimization. The paper offers recommendations on best practices for improving the consensus building process.