Proposed modification to cap on basic supplementary bids in Principal Stage of auction


Proposed modification to cap on basic supplementary bids in Principal Stage of auction of 2.6 GHz and 2010 MHz bands

Issued November 18, 2008

Do you agree with the proposal to modify cap on basic supplementary bids as set out in the revised draft of regulation 19 in annex 4?

BT has examined the proposed modification to the cap on basic supplementary bids in the Principal Stage of the auction for the 2.6GHz and 2010MHz bands.

BT notes that Ofcom has been encouraged by stakeholders’ responses to previous consultations on spectrum awards, to learn lessons from the practical implementation of those awards and consider making appropriate modifications to future awards so as to improve them. BT also notes that Ofcom believes there are some increased benefits of this proposal over the previous one.

Whilst the proposed modification initially appears to generate more complexity, upon more careful analysis BT believes this is not the case, and indeed more importantly it adds greater clarity in the practical execution of the award from the perspective of participants. This is something to be welcomed for awards that Ofcom may be undertaking in the future.

BT therefore supports Ofcom’s proposal to modify the auction rules as defined in the Consultation dated 17th October 2008. In particular, BT supports Ofcom in refining the current rules because it is our assessment that this will provide:

  • more clarity as to the progress and likely outcome of the principal stage of the auction
  • increased incentives for participants to bid truthfully during the auction and disincentives for strategic behaviour – by allowing unconstrained bids by bidders only on packages identical to their final primary round package, rather than on any package, with an equivalent or lower eligibility
  • an environment where supplementary bids are primarily used to refine the final primary round allocation, thereby optimising allocation of any “unsold” lots and enabling the submission of additional (split) supplementary bids
  • an environment where the conclusion of the primary clock rounds may be more representative of the end result of the auction
  • an environment where the award result in terms of the packages won and the prices paid can be more easily understood and communicated

BT welcomes comments on the content of this document. Comments should be addressed by e-mail to Lorraine Flawn.