Canadian 700 MHz auction: can quintillions of choices be a good thing?

The 700 MHz auction which has just started in Canada is an unusual CCA because it is for regional lots. There are four generic types of licences in 14 areas, meaning that participants will be choosing from 56 lots instead of the usual three or four.

CCAs are designed to sell packages of items and encourage participants to bid on any useful combination. If you split the licences up into regions, as has traditionally been done in North America, this means many more licences, and therefore many more combinations.

One estimate put the number of possible combinations at an eye-popping 109 quintillion, or 109 x 10¹⁸!

In reality, for most bidders the use of spectrum caps will reduce this incredible figure, and there is a limit of around 500 on the number of bids actually allowed.

Nonetheless, applying the CCA to the regional licensing model is a new departure. Concerns have been expressed about the complexity of the format (see point 26) and regional licensees fear being forced out by bigger national bidders. A large number of combinations raises the prospect of the predatory bidding seen in the Swiss auction, although a new measure is in place (see Q1.7) to discourage this.

We will shortly find out if the CCA passes its latest test.