The Sale of the British 3G Telecom Licenses (2002) [pdf] (opens in new tab)

Of course immediately after the "successful" auction telecoms couldn't afford to do anything with the acquired licence and telecoms went into recession.

3G rollout and services took a ridiculous time to arrive.

Very misleading title, especially for a scientific paper. While it was the biggest auction up to that date, a similar auction in Germany just a few months later had a significantly higher revenue, nearly twice as much as the British auction. [0] The paper was published in 2002, so the title was already incorrect when it was published.

[0] https://en.wikipedia.org/wiki/Spectrum_auction#Germany

I don't understand why the licenses seem to be 'forever'. Surely a 25 year license which is then sold again at auction would have been a better design.

The 'forever' licenses also can't be resold (although the entire company owning them can merge). That means if in the future another technology which completes with 3G so incumbents don't want to get involved comes along and could make great use of that spectrum, it won't get use.

I saw a talk by Ken Binmore, the organiser of the auction and author of the paper.

He found it very funny how each participant turned up with teams of Nobel prize winning economists and mathematicians.

He said the correct way to approach such an auction is to decide up front what the value is to you and then bid up to but not beyond that figure. That is all. There are plenty of foolish things you can do but nothing better.

I remember that the designer of the auction did various mock auctions beforehand getting maths PhD students to do the bidding pretending to be the various mobile companies. I was a postdoc at the time and didn't take part myself but some of my friends did.

ahem http://www.reuters.com/article/us-fcc-auction-idUSKCN0ZV2C3

With respects paid to Paul Milgrom who designed this auction!