Why does the ACMA allocate spectrum licences by auction?
Where demand outstrips supply, the auction mechanism ensures that the available spectrum is allocated to those bidders who value it the most. The assumption is that the willingness to pay for the spectrum is a measure of the value of the service for which the spectrum will be used if acquired (opportunity cost). In policy terms, auctions are the simplest and most transparent method of allocating resources where there is competing demand. Auctions may be conducted using the open outcry method or the simultaneous multi-round method. The simultaneous multi-round (SMR) auction has many advantages over other options for allocating spectrum.
