Feedback sought on early exposure draft of the auction procedures
This preliminary consultation seeks information and views from stakeholders on the ACMA’s proposed approach to the auction procedures for the digital dividend auction.
The feedback provided during this informal consultation will help inform the ACMA’s draft allocation determination for the auction. The ACMA expects to release the draft determination for formal consultation in late February.
To assist stakeholders in commenting, the ACMA has attached the early exposure draft of the auction procedures. It is being released to provide industry stakeholders with an insight into the ACMA’s preliminary thinking around the development of auction procedures for the combinatorial clock auction (CCA) format that the ACMA has chosen. The draft of the auction procedures is not in the form of a legislative instrument.
The ACMA welcomes stakeholder comments on all parts of the procedures, including but not limited to those issues covered below.
This early exposure draft does not contain administrative arrangements for the auction, lot configuration, or lot ratings. These, and other matters relevant to the auction, will be the subject of separate stakeholder engagement to be announced on the ACMA’s engage website.
Auction procedures for the upcoming allocation
In October 2011, the ACMA announced it would allocate spectrum in the 700 MHz and 2.5 GHz bands in a single process using the CCA auction format.
The CCA format was originally proposed by Ausubel, Cramton and Milgrom in their 2006 academic paper The Clock—Proxy Auction: A Practical Combinatorial Auction Design. The procedures the ACMA plans to use for the CCA are similar to those used recently by several European spectrum regulators to allocate high-value spectrum including, for example, the 2.6 GHz allocations in Denmark, Austria, and the Netherlands.
A high-level overview of the proposed CCA format was presented at the 2011 Digital Dividend Spectrum Tune-up and is available on the ACMA's website.
The ACMA has engaged Power Auctions LLC (Power Auctions) to provide auction implementation and advisory services for the digital dividend auction. As part of these services, Power Auctions has provided draft auction procedures to the ACMA. These draft procedures are still under consideration by the ACMA and will be subject to drafting changes when the final version is incorporated into the Radiocommunications Act 1992 s.60 determination. The early exposure draft of the auction procedures are available in Word (.docx) or PDF (2.1 mb) formats.
This draft of the auction rules outlines the ACMA’s current thinking on the rules relating to:
- how the auction will be conducted
- the operation of, and bidding in:
- the clock rounds
- the supplementary round
- the assignment rounds
- the selection of the winning bids
- the calculation of the prices winning bidders must pay.
Although none of the procedures described in the attached documents are settled, there are some specific high-level matters that the ACMA has under active consideration. These include:
- The information policy (for example, how much information about demand is released to bidders at the end of each round, and how much information bidders have about each other and their bids).
- The extent to which certain issues (such as length of rounds and recesses) are determined in the rules and the extent to which the auction manager has discretion to set and vary these during the auction.
- The specification of the pricing rule, and in particular, the choice of rule for determining the unique set of prices winning bidders must pay when the Vickrey prices for winning bids are not in the core. The ACMA is considering whether to divide the required increase in total payments between winners by reference to the size of each winner’s package (as proposed in the early exposure draft of the rules).
- The specification of the activity rule, and in particular, whether to introduce some flexibility for bidders to bid above their eligibility in the clock rounds, and the requirement for bids in supplementary rounds to be consistent with revealed preference in all relevant clock rounds. This is the approach proposed in the early exposure draft of the rules. It is a variation of the approach in recent CCAs in Europe but is consistent with proposals for some other upcoming CCAs, such as Comreg’s proposals for the allocation of lots in the 800 MHz, 900 MHz and 1800 MHz bands in Ireland.
The early exposure draft of the auction procedures does not explain the economic underpinnings of the CCA format or provide extensive examples to illustrate how different elements of the rules affect the bids that bidders can make. However, in addition to the draft auction procedures, Power Auctions has provided explanations and examples to the ACMA. Extracts from this advice is available in Word (.docx) or PDF (966 kb) formats.
Further explanatory material will be provided at the stakeholder workshops on the auction procedures scheduled for 13 and 23 January 2012. The two workshops will cover the same material, but stakeholders are welcome to attend both. The agenda for the workshops is available.
Questions for stakeholder consideration
The ACMA is interested in hearing your views on the early exposure draft of the auction procedures and welcomes comment on any aspect of the procedures.
Please submit your response by email to firstname.lastname@example.org by Friday 3 February 2012.
This document is made available to seek feedback on the proposed draft auction rules. Material in this document should not be taken to indicate the ACMA's commitment to a particular policy or course of action.
The ACMA does not make any representations or warranties that it will implement any or all of the options, positions or dispositions set out in this document. The terminology used in this document may also be subject to change. Material in this document is made available for general information only and on the understanding that the ACMA is not providing professional advice. Different solutions and outcomes may apply in individual circumstances.
While reasonable efforts have been made to ensure the accuracy, completeness and reliability of the material contained in this document, to the extent permitted by law, the ACMA provides no express or implied warranties and makes no representations that the information contained in this document is accurate, complete or reliable, and expressly disclaims liability for any loss, however caused and whether due to negligence or otherwise, arising directly or indirectly from the use of, inferences drawn, deductions made, or acts done in reliance on, this document or the information contained in it, by any person.