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Auction format means lower revenues, less gaming: Lemay

telecom | 12/18/2012 9:00 pm EST

Industry Canada's new format for the 700 MHz spectrum auction next year will lead to lower government revenues and less in-auction “gaming,” a mock auction by research firm Lemay-Yates Associates Inc. showed. In October, Lemay-Yates conducted a mock auction with eight bidding groups competing for 45 spectrum licences, including nine licences in five geographic regions in one country. Those bidders, which were assigned to behave as either a new entrant or incumbent wireless carrier, were given different auction budgets totalling $2.2 billion for spectrum carrying a total reserve price of $950 million. In an interview, Johanne Lemay, co-president of Lemay-Yates, said seven of the bidders purchased all 45 licences with $1.3 billion, or about 37 per cent above the total...