Auctions: How to allocate spectrum rights efficiently

Through the switch-over from analogue to digital television, a large amount of radio spectrum has been or will shortly be freed up in the 800 MHz bandwidth across the European Union. The question that arises naturally is how to distribute the spectrum rights in the most efficient way possible. This article sweeps through the most common allocation methods in the telecommunication industry and the main relevant theoretical results. In the Spanish case, auctions seem the right way to go but the details are not clear-cut. We perform an analysis of the allocation of spectrum rights in Spain and point out at some potential problems.