|Latin America I 1996
|Open Spectrum Access
|Eli M. Noam
|Professor of Finance and Economics
|Columbia University, USA
As readers of Connect World Latin America will know, spectrum auctions have caught on in countries such as Mexico, and are being assessed in the other counties of the region. They fill state cofers and provide a simple solution to an immediate challenge – a great bonus to telecommunications ministries who are keen to bring the benefits of liberalisation to citizenss throughout their countries as fluently and as quickly as possible.
Almost anyone, it seems, loves auctions. But if so many agree with the idea of an auction and for such different reasons, it is high time to re-examine it. The arguments for auctions are well-known. An auction is better than a mindless lottery, or than comparative administrative hearings with their inevitable and legal manoeuvrings. It takes politics out of the process. It gets spectrum resources quickly into the hands of users that value them highest. It rationalises the assignment process while recovering the value of the spectrum to the public. It creates certainty and incentives to invest.