What else do you want to say besides applauding the introduction of the auction system for 5G spectrum allocation?

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Due to the lack of real property owners, public resources suffer from huge inefficiency in resource utilization, mismatch in resource allocation, and rent-seeking in the resource allocation process. Market economies have basically given up on relying on administrative approval to allocate resources and have adopted market means to allocate resources.

As far as spectrum resources are concerned, major economies around the world mostly allocate them through auctions, which is different from China's past practice of allocating them through administrative means.

However, it is commendable that the Chinese telecommunications administration has formally introduced a spectrum auction system in the latest revision of the "Radio Management Regulations of the People's Republic of China", thus removing the huge obstacle of allocating spectrum resources by market means at the institutional level. In an interview with the media, an official from the Policy and Regulations Department of the Ministry of Industry and Information Technology said that the revision of the "Regulations" established bidding and auction as a system, and clarified that commercial frequencies such as terrestrial public mobile communications can be allocated by bidding and auction.

We have to applaud this progress. The entire regulatory policy of China's telecommunications industry is slowly improving. Although there is still a long way to go to get rid of the directive and guidance-based management model, in terms of spectrum, the first step is to tear apart a high-level institutional norm for allocating resources according to market methods. This is a small step for spectrum management, but a big step for telecommunications industry regulation.

Since China's 2G, 3G and 4G spectrum allocations have been completed in accordance with administrative approval, the introduction of the auction system will have a direct impact on the future 5G spectrum allocation. The author believes that since it has been established as an institutional option, there is no reason to go back and take the old path of using administrative allocation to dominate the allocation of 5G spectrum.

Then, if the auction system is introduced for the allocation of 5G, a situation where those who are capable will take charge can be achieved. Operating entities with capital and strength can start to carry out 5G business first, thereby promoting the globalization of China's entire industry at the level of the entire information infrastructure. This consideration must abandon the balance of an industry. If it is limited to the small industry of telecommunications operations, the gains and losses of a city or a pool will result in the loss of the entire Chinese communications, Internet, and the great opportunity for digitalization of traditional industries.

However, we still see that the dual-track system will still be the way to allocate spectrum resources for a long time in the future, and this dual-track system is mainly limited to the allocation of commercial frequencies such as terrestrial public mobile communications. However, it is regrettable that the well-known digital dividend 700M still has no hope of being reconfigured. From a global perspective, the use of 700M spectrum for terrestrial public mobile communications has almost become a foregone conclusion, especially in Europe. Germany and France, two major countries, have completed the auction of 700MHz spectrum in June and November 2015 respectively, and the United States has also completed the auction of this frequency band. In China, the Party Committee Meeting of the State Administration of Radio, Film and Television has clearly allocated the 700M frequency band to China Radio and Television Network Co., Ltd., and established "China Broadcasting Mobile" to be responsible for the operation of the 700M frequency band.

In terms of spectrum allocation, global Internet giants have also begun to have new demands. Although the demands of global Internet giants are not necessarily suitable for China's national conditions, under the reason that sounds like more reasonable resource utilization, it is inevitable to think of why China does not follow suit in the context of globalization?

For example, Google recently proposed a more radical view on 5G spectrum allocation, namely, "the spectrum sharing and authorization model created by the FCC for the 3.5 GHz band can also be used to deploy 5G networks faster and more efficiently", breaking the model of exclusive spectrum. Of course, the situation Google faces in the United States is that operators auction spectrum but may not provide coverage, such as indoor spectrum being idle, so Google believes that a "neutral host" construction model can be established, and unused spectrum can be accessed and used by any entity in authorized or unauthorized scenarios.

I believe that this model can also be used in the allocation of 700M spectrum. As we all know, the radio and television system does not have enough capital for nationwide coverage of 700M, and building a new terrestrial public network covering the whole country with independent operators is also a duplication of construction and a waste of resources. Therefore, we might as well try to adopt a spectrum sharing model for certain scenarios on 700M and authorize capable entities to access and use it.

Therefore, we see that China's introduction of the auction system into spectrum allocation is a model that is in line with and close to the global mainstream spectrum management model. While we commend it, we should also be more aware of how to avoid resource misallocation from the perspective of economic value rather than other perspectives. Our spectrum management still needs more model innovation to break down departmental and administrative barriers and avoid missing the great opportunities of global digital transformation.

Otherwise, no matter how many innovations there are at the business level or in the business model, they will all be castles in the air. The basic spectrum resources, which are the foundation of the entire information industry, must take the lead.