'Winner's curse' must be avoided in TV auction
The National Broadcasting and Telecommunications Commission (NBTC) insists that it does not want to see the "winner's curse" in the upcoming spectrum auction of 24 commercial digital terrestrial television channels, according to Natee Sukonrat, the cha
Natee made his remark on the TV programme “Business Talk”, which aired on Krungthep Turakij TV last week. During the programme, he noted that the winner’s curse was one of the panel’s biggest concerns during the auction. Winner’s curse refers to a situation in which the winner is unable to run its business, because it offers too high a price to secure a licence.
To prevent this happening, the broadcasting panel is planning a “forward auction” – an auction process to select the 24 commercial digital terrestrial TV channels. Under this process, bidders must raise their price in each round. For a children’s programming licence, participants must raise their bid by Bt1 million per round; Bt2 million per round for news programming; Bt5 million per round for variety channels; and Bt10 million per round for an HD variety-channel licence. These amounts are based on about 1 per cent of the reserve price of each licence.
The reserve starting price is set at Bt1.51 billion for each of the seven HD variety channels; Bt380 million for each of the seven SD variety channels; Bt220 million for each of the seven SD news programmes and Bt140 million for each of the children’s channels.
Natee added that the auction for each licence category would be held on different days. The auction of each licence must also be completed within an hour. If the number of bidders who offer the highest prices is more than the number of available licences, the NBTC will add five-minute auction rounds until the winners of each licence category are known.
Among four TV categories, the broadcasting committee foresees that there will be about 20 potential bidders in the auction of seven variety SD channels. This will create intense competition in this category, compared with other auction rounds.
Additionally, for transparency and accountability, the NBTC plans to air live broadcasts of the country’s first spectrum auctions via free-TV channels. The special programmes will be scheduled at weekends to make sure that most people are able to watch the 60-minute process. The names of TV broadcasters televising the live auctions will be revealed later.
