{"id":212493,"date":"2022-10-31T22:22:26","date_gmt":"2022-10-31T16:52:26","guid":{"rendered":"https:\/\/blog.forumias.com\/?page_id=212493"},"modified":"2022-11-01T08:27:02","modified_gmt":"2022-11-01T02:57:02","slug":"answered-what-are-the-limitations-of-auctions-as-a-method-of-spectrum-allocation-how-does-the-draft-indian-telecommunication-bill-2022-try-to-bring-reforms-to-this-area","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-what-are-the-limitations-of-auctions-as-a-method-of-spectrum-allocation-how-does-the-draft-indian-telecommunication-bill-2022-try-to-bring-reforms-to-this-area\/","title":{"rendered":"[Answered] What are the limitations of auctions as a method of spectrum allocation? How does the draft Indian Telecommunication Bill, 2022, try to bring reforms to this area?"},"content":{"rendered":"<table>\n<tbody>\n<tr>\n<td width=\"616\"><strong>Introduction:\u00a0<\/strong>Contextual introduction.<br \/>\n<strong>Body:\u00a0<\/strong>Write some limitations of auctions as a method of spectrum allocation.\u00a0\u00a0Also explain how the draft Indian Telecommunication Bill, 2022, does tries to bring reforms to this area?<br \/>\n<strong>Conclusion<\/strong>: Write a way forward.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>A spectrum auction is a process whereby a government uses an auction system to sell the rights to transmit signals over specific bands of the electromagnetic spectrum and to assign scarce spectrum resources. India has a billion plus mobile subscribers, 800 million internet users and the <strong>second-largest telecommunications network<\/strong> in the world.<\/p>\n<p><strong>Limitations of auctions as a method of spectrum allocation:<\/strong><\/p>\n<ul>\n<li><strong>High Reserve Price<\/strong>: The government before conducting auctions, reserves a price for a spectrum. A higher reserve price, so spectrum attracts only fewer buyers.<\/li>\n<li><strong>Obsolete Auction Format:<\/strong>The government has not updated the spectrum auction format for a long time. Due to which a persistent fall in the number of bidders is witnessed.<\/li>\n<li><strong>Regulatory Framework<\/strong>: The poor framework has resulted in the forceful exit of various players from the telecom sector. This automatically impacts the potential of spectrum auction as more bidders mean better prices.<\/li>\n<li><strong>High Upfront Fees<\/strong>: High fees place a greater financial burden on telecoms which impairs their functioning.<\/li>\n<li>The <strong>cost of spectrum is same<\/strong> in urban as well as in remote areas. Since operators predominantly cater to urban markets, the spectrum in remote areas remains under- or un-utilised due to a lack of investment in allied infrastructure.<\/li>\n<li>These auctions tried to <strong>maximize government revenues instead of maximising development<\/strong> by bringing in greater benefits to citizens.<\/li>\n<\/ul>\n<p>The Draft Telecommunication Bill, 2022 seeks to replace the colonial era legislation that regulated the sector, the <strong>Indian Telegraph Act, 1885<\/strong>. It tries to bring reforms to this area in following manner:<\/p>\n<ul>\n<li><strong>Clarity on Spectrum Assignment:<\/strong> The Bill reaffirms the government\u2019s authority to assign spectrum, with or without auction, and declares common good and access to telecom services as the objective for spectrum assignment.<\/li>\n<li>It <strong>supplement auctions by \u201cadministrative allocation<\/strong>, and any other manner as may be prescribed\u201d as stated in the bill in the short-term and eventually do away with auctions altogether.<\/li>\n<li>It paves the way for sharing, trading, leasing, surrender of spectrum assigned, and a <strong>process to return unutilised spectrum<\/strong>.<\/li>\n<li>It also proposes to ensure taking back of spectrum if the telecom provider goes through bankruptcy or insolvency.<\/li>\n<\/ul>\n<p>Spectrum is a perishable scarce resource and loses its value if left unused. It must be recognised that spectrum needs to be combined with other infrastructure to enable service delivery.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction:\u00a0Contextual introduction. Body:\u00a0Write some limitations of auctions as a method of spectrum allocation.\u00a0\u00a0Also explain how the draft Indian Telecommunication Bill, 2022, does tries to bring reforms to this area? Conclusion: Write a way forward. A spectrum auction is a process whereby a government uses an auction system to sell the rights to transmit signals over&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/answered-what-are-the-limitations-of-auctions-as-a-method-of-spectrum-allocation-how-does-the-draft-indian-telecommunication-bill-2022-try-to-bring-reforms-to-this-area\/\">Continue reading <span class=\"screen-reader-text\">[Answered] What are the limitations of auctions as a method of spectrum allocation? How does the draft Indian Telecommunication Bill, 2022, try to bring reforms to this area?<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-212493","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/212493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=212493"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/212493\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=212493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}