An insiders' view of FCC spectrum auctions

After a long period of awarding spectrum licenses inefficiently, changes in the budget and budgetary process coupled with increases in the value of th e spectrum for non-broadcast use led Congress to allow the Federal Communic ations Commission to award licenses through competitive bidding. Contrary t o the perceived view of government bureaucracies as excessively cautious, t he FCC used the newfound authority to adopt a novel approach to auction des ign-simultaneous multiple round auctions. The innovative auction design wou ld not have been adopted without the successful collaboration between gover nment economists and academic economists, who helped to formulate and refin e the design so that decision makers at the FCC could be convinced that the novel technique was both superior and practical. The FCC's implementation of competitive bidding was not only rapid as mandated by Congress, but also much less costly than outside alternatives and allowed the integration of spectrum policy decisions and auction design. Experience from several aucti ons has led to a number of open questions and refinements. The FCC is tryin g to replicate the success with the original auction design by facilitating dialog between the agency and outside auction experts in order to address these issues.