Federal Network Agency Should Continue to Rely on AuctionsComment
ZEW Economists Comment on Frequency Allocation
At the end of 2025, the spectrum usage rights in the bands at 800 MHz, 1,800 MHz and 2.6 GHz will expire. The Bundesnetzagentur (Federal Network Agency) has therefore sparked a discussion on how best to provide the freed-up spectrum for use from 2026 onwards in such a way as to ensure a functioning mobile radio market and optimal broadband coverage. For this purpose, the agency published a scenario paper on which ZEW President Professor Achim Wambach and Professor Vitali Gretschko, head of the Research Department “Market Design” at ZEW Mannheim, have provided their views.
“The digital transformation is one of the great challenges of our time. An essential prerequisite for this transformation is good access to mobile broadband. Improving broadband coverage in Germany is closely linked to making suitable spectrum available for rolling out high-performance mobile networks. In the past, the Bundesnetzagentur has repeatedly awarded frequencies via auctions. The billions of euros generated in the proceedings have received widespread media coverage. More importantly, however, the frequency auctions are shaping the mobile radio markets of the future,” says ZEW President Professor Achim Wambach.
“With its scenario paper, the Bundesnetzagentur puts up for discussion whether auctions are the best way to allocate frequencies, or whether hearings can lead to a better result. The answer is clear. Auctions have proven themselves successful in the past and will continue to be the most suitable method in the future, as we explain in our statement. Moreover, auctions are not only appropriate for the allocation of frequencies. They can also be used to ensure mobile coverage in regions in which competition between mobile operators in terms of infrastructure is insufficient. To this end, roll-out in these ‘white spots’ should be auctioned together with the frequencies. This will ensure competition in terms of infrastructure and efficiently create widespread broadband coverage,” says market design expert Professor Vitali Gretschko.