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Posted by Raqueeb Hassan on June 5, 2008, 6:34 am
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<snip>
> Here's a suggested alternative. First, come up with a realistic
> amount of spectrum, so there is not serious scarcity from day
> one. This probably means that in urban areas, heavy usage (business
> sites, for instance) can use wireline at reasonable rates. Divide
> this spectrum into multiple license blocks, and cap how much one
> bidder can hold. And divide it geograhically so that there are
> really valuable urban licenses, and many smaller licenses with less
> value. The point is to isolate subsidy-needing areas from
> surplus-producing areas.
>
> Now hold a *reverse* auction. That is, put *all* of the licenses on
> the table at once, urban and rural. With the help of a consultant,
> determine the maximum conceivable value of any license. Offer all
> licenses at that price per license. As soon as somebody wants one,
> they get it. Now lower the price a little. So if you have a license
> price that starts at say 1000 taka crore (I think about US$140M; I'm
> just pulling a number out of thin air for this), and nobody bids,
> then you lower it to 900 taka crore, etc. As the price declines a
> few percent per round, more and more are sold off. You end up with
> at least two or three (per policy) licensees in the cities, so
> there's competition. Now as the price declines towards zero, there
> may be some licenses left, so you stop lowering it in percentage and
> move to fixed values. If nobody bide 1M taka ($14k USD) for a
> license for a rural area, then try 0. Then offer to *pay* somebody
> 1M taka. Then 2M, etc. Those are the subsidies, and they come from
> the money paid in for the urban licenses. You just need one to start
> in the rural areas, but they need strict regulation to see that they
> actually spend the money correctly and don't steal it. What you've
> done is find the taker who'll need the least subsidy, using the same
process.
>
> Also, I would not restrict the licensees as to carrying voice, since
> having application-specific regulation brings in a whole different
> set of problems. But it might be a good idea to maintain a
> separation of carriage and content, so that the radio system owners
> must provide access to wholesale ISPs. That way the radio systems
> can be financed on a wholesale domestic price/bit basis, without
> thinking about application value, while ISPs compete freely. That is
> the only real way to have workable "neutrality", and it is
> economically more efficient than trying to regulate Internet service per
se.
Thank you very much for those pointers, Mr. Fred. I would say, it's
like a breath of fresh air from the knowledge I had before your
posting. I might want to get down for more conversation, if you allow,
over the mail.
Thank you once again for the enlightened talk.
--
Raqueeb Hassan
http://wideangle.googlepages.com/
| ![Re: BWA Licensing Issues: Auction or Beauty Contest [telecom]](/images/header.jpg)
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