Where regulators set spectrum fees, they typically reflect estimates of the spectrum’s opportunity cost – what we often call the ‘market price’ as a shorthand – with the aim of encouraging efficient use. Renewal prices are often estimated using similar techniques to those for setting reserve prices. In contrast to reserve prices, renewal prices always affect incumbent operators. This leads to strong incentives for lobbying and potential for disputes around administratively-set renewal prices.

We explain the reasoning for market prices and discuss the claims commonly made by operators here.