MAINZ (WiMAX Day). The auction of licenses for 3.5 GHz spectrum in Germany began yesterday at the Federal Network Agency (Bundesnetzagentur), and today after twelve rounds, bidding has reached €53 million euro. The auction will continue today and end possibly tomorrow.

The president of the Bundesnetzagentur, Matthias Kurth, announced before the auction began yesterday that “This procedure has a substantial meaning for the German economy.” The Bundesnetzagentur has long supported a more competitive telephony market, and the introduction of WiMAX services in Germany should make the stagnant broadband market more competitive.

Herr Kurth further stated in a prepared press release: “I hope that with these frequencies the [bidders] will be able to place new and interesting telecommunications products on the German market.” The Bundesnetzagentur also intends that WiMAX will enable the deployment of new services in areas not presently served with broadband access.

Four Frequencies in 28 regions
For the purposes of bidding, the territory of Germany is divided into 28 regions, and four frequency packages are on offer in each region. There are presently three bidders that appear set on acquiring licenses that cover all regions of the Federal Republic of Germany. The bidders include Deutsche Breitband Dienste GmbH (DBD), which already operates pre-WiMAX services in Berlin, Luxembourg-registered Clearwire Europe S.á.r.l., and Inquam Broadband GmbH.

The spectrum being auctioned is divided into four lots of 21 Mhz each. The frequencies range from 3410 Mhz to 3594 Mhz. As of today, Clearwire had bid in all regions for the first lot of frequencies, Inquam in the second lot, and DBD in the third lot. The fourth lot of frequencies had bids for only three regions made by Televersa Online GmbH, an alternative DSL provider based in southeast Bavaria.

EWE Tel, an alternative telecoms provider based in Hanover, is another company that was registered to bid, but dropped out in early rounds

On-line bidding
As with recent auctions for radio spectrum in America and Scandinavia, the auction process yesterday at the Bundesnetzagentur was conducted entirely on-line.

To effect the on-line bidding process, “auction PCs” are installed in six different offices, which themselves are connected to the main auctioneer PC at the Bundesnetzagentur.

To achieve transparency, the bidders are not allowed to communicate with each other. According to a press release from the Bundesnetzagentur, “suitable precautions” were made to prevent any such communications, but did not elaborate on what those precautions might be. However, bidders are allowed to contact their colleagues at their companies and also the auctioneer directly by telephone.

Concerning the software used in the auction, and the monitoring process, Bundesnetzagentur states: “The auction software is controlled by an experienced, inter-disciplinary team consisting of legal experts, economists, technicians and auction theorists, ensuring the smooth execution of the auction. The auction proceeding is officially monitored by a notary public.”