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Friday, Feb. 10, 2012

EDITORIAL

Selecting a 'platinum' carrier

The Internal Affairs and Communications Ministry is expected to select by the end of this month a telecom carrier that can use a 900-megahertz (MHz) frequency spectrum for high-speed mobile phone communications. By Jan. 27, four telecom carriers — NTT DoCoMo, KDDI, SoftBank and eAccess — submitted applications and plans to receive the cellphone frequency, which is suitable for handling an increasing volume of data communications due to the spread of smartphones. Since the selection is not done through auction, the ministry should make public in detail the selection process to ensure transparency.

The four firms are eager to get the 900-MHz frequency spectrum, which is hardly affected by obstacles such as buildings and mountains and can reach remote locations without breaks.

Because of its high reliability, this frequency spectrum is called a "platinum band." In selecting a firm entitled to the frequency spectrum, the applications and plans submitted will be closely examined by the Radio Wave Management Commission.

The government's administrative reform unit earlier said the current method of choosing a firm that can use a particular frequency spectrum is likely to suffer from a discretionary decision and that the detailed standards to compare applications and plans pushes up the method's administrative cost. So it proposed introducing an auction system.

But the ministry decided not to use an auction for the platinum band, saying that it would cause confusion to the telecom carriers that were preparing applications under the existing rules. Instead, it decided to introduce an auction for a frequency spectrum to be used by fourth-generation mobile phones, which are expected to start to be in use in 2015. It plans to submit a related bill to the Diet this year so that auction will be held in 2013.

Auctions are transparent and bring revenues to the government for both general use and for developing information technology. But if a firm offers too high a bid, it may face difficulty in continuing its operation or may pass the cost on to consumers. Firms with abundant funds may try to prevent the entry of newcomers into the industry by offering high bids. By rousing wide and informed discussions on the merits and demerits of auction, the government and the Diet should design an optimum auction system.



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