The government is not planning to intervene in the auction of the spectrum to be used for 4G telecom service if the auction gets overheated, the National Communications Commission (NCC) said yesterday.
The commission announced on Wednesday that the nation plans to release 2,500MHz and 2,600MHz frequency bands for the auction at the end of the third quarter of this year, with a floor price for these frequencies of more than NT$25 billion (US$793.6 million).
In light of what happened in the previous auction, in which the revenue generated by the 4G frequency auction was three times higher than the floor price, some telecom carriers suggested that the government set up a cooling mechanism to prevent the bidding from going excessively high.
They said that overpriced frequencies could subsequently jack up the costs of 4G services for consumers.
However, the commission said such a mechanism would not be necessary.
“We believe telecom carriers will rationally place their bids based on their business strategies and with the interests of their shareholders in mind,” the commission said in an official statement. “Through the market mechanism, the telecom carriers can win the hearts of the consumers and gain a competitive edge by providing quality broadband services at inexpensive prices.”
The commission said that only a few nations around the world have activated a cooling mechanism in the spectrum auction.
The commission said that telecom carriers could choose to use either frequency-division duplex or time-division duplex, two techniques for 4G service technology, adding that the commission would ensure the base stations and other relevant facilities used by the telecom carriers fulfill national security requirements.
According to the timeline laid out by the commission, the rules of the auction will be explained in detail at an information session next month, in which the commission will hear opinions from all parties to help make necessary changes. The final version of the auction is to be announced in June.
The auction is scheduled to be completed by the fourth quarter of this year.
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