Understanding Strategies in the Combinatorial Clock Auction: The Case of Canada's 700 MHz Auction
9 Pages Posted: 29 Nov 2016
Date Written: June 22, 2016
Industry Canada, the authority charged with radio spectrum allocation and assignment in Canada, administered a Combinatorial Clock Auction in 2014 whereby a sizable number of spectrum licenses were awarded to a handful of telecommunications operators to provide 4G cellular service throughout the Canadian provinces.
The auction format, the Combinatorial Clock Auction (CCA), is now increasingly replacing the Simultaneous Multiple Round Auction (SMRA) as the preferred method to assign commercial radio spectrum. The CCA has been used in several countries by spectrum authorities to assign spectrum bands for cellular (4G) services and wireless broadband.
In its essential design the Canadian CCA consists of two main stages: the Allocation stage and the Assignment stage; in turn the allocation stage is further divided in two: the Clock Rounds and the Supplementary Round. This paper discusses the main features of the CCA and highlights some of the differences with other previously used formats. Next, it uses an extensive repository of data from the results of Canada’s 700 MHz auction in order to analyse the strategic aspects of auction participants' bids occurred during the first stage of the auction, known as the Clock Rounds. Data is publicly available, posted by Industry Canada, and traces every bidder’s demand history throughout the auction represented by the round-to-round demanded bundles and the aggregate bid (bid price) for each bundle. Bidding data also shows a bidder's eligibility and activity levels, two important auction measurements of activity that constrain a bidder's behaviour.
Keywords: telecommunication regulations, mobiles, Canada, radio spectrum
JEL Classification: L86
Suggested Citation: Suggested Citation