Talk:Telecoms crash
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I am building referneces for this.
the german and uk governments offerred auctions of the 3g radio space for limited slots to a larger number of companies around 2000. they made this sealed bid, and therefore to not win was to be pushed out of the business.
this had a catostophic effect on european telecoms workers, throwing around 100,000 of them out of work by the end of 2001 (30k in the uk)
i have one very strong reference (published in electronics world) and other good sources.
i was prompted to do this because i have seen references to politicians aplauding this as good windfall tax gathering, when in fact it was meddling and destroying a section of industry.
Robin48gx 21:47, 27 June 2007 (UTC)
That's absolutely fine, but the reason I flagged the page was because, when created, it contained no content other than its title repeated. I would suggest (if you're looking to build the page) that you use a sandbox of your own user space to do so before migrating the completed page to the main name-space. If you have any questions please don't hesitate to leave a message on my talk page. Giles Bennett (Talk, Contribs) 21:49, 27 June 2007 (UTC)
ok better go to sleep now. I'll tidy it up later and get proper refs in. I have only really put technical stuff on wiki b4 but feel this is something missing from wikipedia. I hope others can fill in more detail later. Robin48gx 21:59, 27 June 2007 (UTC)
This whole article is written very strongly from the point of view of the telecoms companies. It is badly in need of an analysis of the costs and benefits of the auctions for governments, tax payers and telecoms users. 16:28, 6 February 2008 (UTC)
[edit] This article is very biased!
This article on "Telecoms crash" is hugely biased, and has no idea neither about auction theory nor the nature of innovation and risks.
thats possibly being very unfair to who ever wrote it. these were auctions for the continued existance and trading of the telcos involved and more bidders were in the game than licences offered. diabetics bidding for insulin is a fair analogy !
First of all, ex-post it is true that telcos lost a huge money on the bids, but this does not mean that ex-ante the process was badly designed. Moreover, just by looking back, seeing that ex-ante someone bid more than it would like to bid ex-post, does not mean that the results should be cleared. As such a behavior might lead to bids freely bidding more, because they can always expect the government to clear overpriced results.
But why could the "telco crash" be a success from an ex-ante point of view? (This is the proper way of judging a risky situation.) 1. Second-price sealed bid auction don't suffer from the winner's curse effect present with many other types of auctions. So this was a good choice. 2. There were fever licences auctioned of, than competing bidders. Hurray, this means they could not act as monopolies, having a nice piece for everyone, instead they had to reveal they real expected income from the licences. Moreover, given the nature of the telco industry (huge fixed costs and network effects), the number of entrants is naturally limited. This means, that proper competition can be reached only with ex-post market regulation.
Unfortunately, it turned out that their expected income was overestimated, but this was not because of the auction process (remember, second price auctions don't bear the winner's curse)! And if the market participants don't have proper expectations of the future market size, then who does? Certainly not the government, so beauty contests are not possible (beauty contest is the name of (let's say) non-auction procurement).
selling the spectrum is a stealth tax (in effect a tax on free air). eventually the consumer pays. the government has the right to regulate it and charge admin fees for doing that, but it is not automatic that the have the right to 'sell' it. In fact it worked this way until the auctions.
—Preceding unsigned comment added by 81.106.115.105 (talk) 14:40, 30 May 2008 (UTC)
Finally, one more question remains: who owns the spectrum initially? Are those the people living in the country, and so represented by the government, or rather the telcos? If it's the former, then the government SHOULD try to ask for the highest possible amount that the telcos are willing to pay, as this is in the best interest of the voters. Another way for securing the consumers the highest value is to forcing somehow the telcos to price at their zero-profit level, once they are already active. Unfortunately, although someone might like this idea, in reality it's almost impossible to implement. While it's quite easy to implement an outcome, where the telcos pay their expected profits ex-ante, at the auction to the government. Later the government let's them operate more freely (kind of monopolies as they are by nature), but still can reduce taxes and compensate consumers from the licence fees at the auctions. —Preceding unsigned comment added by
the telcos are still charged corporation tax ! taxing the spectrum just meant *another* tax for them to pay, and one which stipped investment and r&d capital
82.224.13.200 (talk) 14:15, 3 April 2008 (UTC)
Please mark the factual discrepancies or remove the banner. 81.106.115.105 (talk) 14:53, 30 May 2008 (UTC)
