The end of cell phone auctions? Legal notice indicates the way


The mobile phone auctions, in which the state collects billions every year, could soon be history. This is indicated by a “protocol declaration” by the federal government, which is part of the telecommunications law passed by the Federal Council on Friday. The Federal Network Agency should choose the most suitable procedure for the allocation of mobile radio frequencies that become free, “without the auction procedure being given legal priority,” says the letter that is available to the dpa.

The allocation of radio frequencies for the transmission of data and telephony is a lucrative business for the state. Believe it or not, the payment obligations of the bidders totaled around 50 billion euros in 2000, when UMTS / 3G licenses were auctioned. In retrospect, far too much – the companies involved lacked the money to expand mobile communications. Some companies threw in the towel, there were long dead spots.

In the years that followed, auction sales fell significantly, but in 2019 the federal government achieved at least 6.5 billion euros. This is a red rag for the network operators – they have long complained that they would rather invest the money in the expansion instead of transferring it to the federal government.

The alternative to the auction is the “beauty contest”, as it is called in the telecommunications industry. Here, the companies only pay low fees and have to determine in advance what exactly they want to do after the allocation – the “best” offer with the most ambitious expansion project is awarded the contract.

So far the legal situation is such that it inevitably amounts to an auction. In future, the frequency allocation options would be on an equal footing. The Federal Network Agency could therefore still decide in favor of the auction, but would have to justify this in a legally secure manner.

The topic is still at an early stage: So far it has only been a protocol statement, the wording is not yet in the actual law. This change is to be made in a next step via a separate amendment. In any case, the note is a small milestone for auction critics – it could be the beginning of the end for the controversial auctions.

And what does the Federal Network Agency say? In the past, the Bonn authority has always carried out auction procedures and recently indicated that this would also be a sensible procedure in the future. But it is also clear: If the legal situation changes, the authority must proceed differently than before. The next frequency assignment is due in 2023 or 2024 – whether as an auction or as an award against fees is open.


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