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With telecom operators and satellite communication players fighting over holding spectrum auctions for satellite services in the country, Elon Musk-backed Starlink, a subsidiary of SpaceX, has proposed an alternative auction where bidders commit a percentage of annual revenue as a “spectrum value fee” in lieu of upfront bids.
“In order to deter spurious bidding or anti-competitive behaviour, applicants must commit non-refundable upfront deposits and timely deployment milestones prior to participation. Each round of bidding will take the form of a simple clock auction, with the TRAI proposing the percentage of adjusted gross revenue that operators would be willing to commit as “spectrum value fees”. Rounds continue with the TRAI incrementally increasing the proposed percentage of adjusted gross revenue to be committed until the number of winning slots equals the number of willing bidders at the latest rate,” Starlink said in a submission to TRAI.
Industry divided
This comes even as the industry is divided over allocating spectrum for satellite services. While Reliance Jio and Vodafone Idea have asked for spectrum to be auctioned to level the playing field with telecom operators, others including Bharti Airtel, Tata group, L&T group have supported the administrative allocation of spectrum. Starlink is also in favour of allocating spectrum administratively, and it has proposed a new formula based on revenue share in order to break the stalemate.
“While this auction design lowers entry barriers and grants access to the necessary spectrum, the auction design is still inferior to a reasonably-priced and well-defined administrative process as it still artificially restricts access to the shared bands. It is only a better choice of mechanism than forcing an exclusionary terrestrial spectrum auction design onto satellite systems,” Starlink said.
The musk-backed entity said this approach satisfies all three of the fundamental satellite system requirements of – predictable and guaranteed shared access to the entire allocated bands for both user terminals as well as gateways; access to critical spectrum across wide and contiguous channels without geographical restrictions; and ensuring similar terms for all qualifying operators that provide similar services in a harmonised manner.
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