The FCC Spectrum Auctions: An Early Assessment

TLDR

The paper analyzes six FCC spectrum auctions held between July 1994 and May 1996. The auctions were simultaneous, multi‑round events in which collections of licenses were sold together. The simultaneous multi‑round format proved highly successful, yielding similar prices for comparable licenses, enabling efficient license aggregation, and revealing that bidder competition, price uncertainty, and mechanisms such as bidding credits and installment payments significantly shaped bidding behavior.

Abstract

This paper analyzes six spectrum auctions conducted by the Federal Communications Commission from July 1994 to May 1996. These auctions were simultaneous multiple‐round auctions in which collections of licenses were auctioned simultaneously. This auction form proved remarkably successful. Similar items sold for similar prices, and bidders successfully formed efficient aggregations of licenses. Bidding behavior differed substantially in the auctions. The extent of bidder competition and price uncertainty played an important role in determining behavior. Bidding credits and installment payments also played a major role in several of the auctions.