An Interpretation of Bidding Strategies in Canada's 700 MHz Combinatorial Clock Auction

Abstract

Industry Canada, the authority charged with radio spectrum allocation and assignment in Canada, administered a Combinatorial Clock Auction in 2013 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 consisted of two main stages: the Allocation stage and the Assignment stage; in turn the allocation stage was further divided in two: the Clock Rounds and the Supplementary Round. The 700 MHz auction in 2014 was organised in 56 products which corresponded to 14 geographical areas with 4 sets of bands in each area (three bands with two blocks each, known as generic, and one band with a single paired block) and had all bidders bidding during the Clock rounds and in the Supplementary round. In the Assignment stage only those bidders who won generic licences in the Allocation stage got to bid on specific targeted licenses. This paper analyses the results from Canada’s 700 MHz auction in an attempt to unlock main aspects of bidders’ strategic bidding. It uses publicly available data posted by Industry Canada which follow every bidder’s demand history throughout the auction represented by the round-to-round demanded bundles and the aggregate amount bid on for each bundle.