ICASA and Auctions
Spectrum auctions are being used by governments to sell the right to transmit signals over specific wavelengths, and ICASA, the Independent Communications Authority of South Africa, is the latest governmental association to put these auctions into practice. ICASA plans to use the auctions to sell mobile broadband licenses to companies.
Spectrum auctions are auctions that seek to allocate resources most efficiently by granting the right to transmit signals to the companies that value such rights the most. The companies that are competing for the licenses each have values for the licenses and the company with the highest value ultimately gains the right to transmit their signals. In this sense, the auction is an ascending bid auction. The government sells the license to the company that values the license the most. The government can make a profit if the company’s value for the license is greater than the price the government is willing to sell the license for.
South Africa’s ICASA hopes to “ensure nationwide broadband access for all citizens by 2020” and is turning to spectrum auctions to achieve this goal (BD Live). ICASA will conduct the licensing process in three stages: qualification, auctioning, and licensing. In the first stage, companies looking to obtain licenses apply to take part in the auction. In the auction stage, only the companies deemed to be qualified by ICASA are able to take part. The auction itself runs as a simultaneous multi-round ascending auction, in which groups of licenses are auctioned simultaneously through several rounds of bidding. Ultimately, the highest bidder will win the auction and get the license.
The spectrum auctions will foster business and growth throughout South Africa, because they “will allow the country to begin unlocking its true mobile broadband potential” (IT Web). The licenses that ICASA will sell through the spectrum auctions require licensed companies to provide coverage in more rural areas before expanding to cities, resulting in growth in the nation as a whole and not just in the highly populated cities. The signals will also be stronger and more reliable, improving business. ICASA hopes to be conducting the spectrum auctions within the next two years.
SOURCES:
http://mybroadband.co.za/news/cellular/138536-icasa-plans-to-auction-off-spectrum.html
http://www.itweb.co.za/index.php?option=com_content&view=article&id=146234
https://en.wikipedia.org/wiki/Spectrum_auction