Learning and Governance in Spectrum Auction Design : Lessons from a Small Island

Spectrum auctions in the United Kingdom have been mostly successful in achieving their objectives, suggesting that potential lessons can be learned for auctions elsewhere, given the mixed picture worldwide of positive and negative experiences. Good auction design benefits from learning both between scholars and practitioners and across a series of auctions. Lessons are learned, first, by building on successes, such as proactive and proportionate measures to promote cellular mobile competition. Second, by changing in response to problems, such as only deploying the ‘heavy machinery’ of the complex Combinatorial Clock Auction (CCA) when valuation synergies really matter. Third, by adapting to circumstances, such as moving over time from pre-packaged licences to more granular generic lots. There are also learnings for the role of experts within governance processes for public policy decision-making which inevitably display human biases, such as under-confidence in the CCA design where complications are obvious, compared to over-confidence in the clock or Simultaneous Multiple Round Ascending (SMRA) formats where strategic complexities are below the surface. Market design experts can carry greater influence by paying attention to decision-makers’ concerns and practicalities, while decision-makers can reduce risks of embarrassing failures by utilising sufficient expertise to appreciate the implications of complex auction design choices