The end of mobile auctions? Legislative note hints at way forward

The end for mobile auctions? Legislative notice hints at way

The mobile phone auctions, where the state makes billions every year, could soon be history. This is indicated by a "protocol declaration" of the federal government, which is part of the telecommunications law passed by the bundesrat on friday. When allocating mobile communications frequencies that become available, the federal network agency should choose the most suitable procedure, "without giving legal precedence to the auction procedure," the letter states", says the letter, which is available to dpa.

Money better spent on expansion

The allocation of radio frequencies for the transmission of data and telephony is a lucrative business for the state. Bidders’ payment obligations totaled a staggering 50 billion euros in 2000, when umts. In hindsight, far too much – the companies involved were short of money for mobile phone expansion as a result. Some companies threw in the towel, there were still rough radio holes for a long time.

In the years that followed, the proceeds from the auctions fell significantly, but in 2019 the federal government will still receive 6.5 billion euros. This is a red rag for the network operators – they have long complained that they would have preferred to invest the money in expansion instead of transferring it to the federal government.

Award for most ambitious expansion project

The alternative to the auction is the "beauty contest" (beauty contest), as it is called in the telecommunications industry. In this case, the companies pay only a small fee and have to decide in advance what exactly they want to do after the allocation – the "the least expensive" the bid with the most ambitious expansion project is awarded the contract.

Up to now, the legal situation has been such that an auction is inevitable. In the future, the frequency allocation options will exist side by side on an equal footing. The federal network agency could therefore continue to decide in favor of the auction, but had to justify this in a legally secure manner.

Stage victory for critics of auctions

The ie is still at an early stage: so far it is only a protocol declaration, the wording is not yet in the actual law. This change is to be made in the next step via a separate amendment. In any case, the notice is a small stage victory for auction critics – it could be the beginning of the end for the controversial auctions.

And what does the federal network agency say? In the past, the bonn authority has always conducted auctions and has recently indicated that this would also be a sensible procedure in the future. However, it is also clear that if the legal situation changes, the authority will have to proceed differently than before. The next frequency allocation is due in 2023 or 2024 – whether it will be an auction or a fee-based allocation is an open question.