Our preference lies in an administrative pricing method. This method has been used successfully in the mobile industry for many years. The theory of auctions is that in the ideal world a rational set of bidders competes for the spectrum based on carefully thought-out strategies and business plans. The danger is that the most heeled bidder is not necessarily the best planned, qualified, funded or backed. The results have included defaults, bankruptcies, under-funded deployments, fallow spectrum and the sale of spectrum to a third party.
Competitive bids place a far more rigorous set of requirements on both the bidder and the regulator.
On the other side the regulator is in a position to evaluate the bidders' claims based on their merits instead of just their wallets. Requiring far more work on both sides is a good test of the sincerity and diligence of both, and is more likely to result in an outcome that is favorable to the public. Besides, auctions increase prices for end-users as they raise the investments. The cost of the spectrum would price these services far beyond the reach of ordinary users. Therefore, Formus believes that the above measure cannot be considered as promoting the harmonization of licensing and assignment mechanisms across Member States.