Discussion Papers

Lorenz Nett

Marktorientierte Allokationsverfahren bei Nummern
Nr. 223 / Juli 2001

In telecommunications networks numbers are essential as addresses. In Germany the regulatory authority is responsible for the management of the numbering space, the allocation of numbers to the final users resp. network operators and the determination of user rights. Liberalisation in the telecommunications market induces a higher demand for numbers. Since numbers are limited according to the structure of the number space scarcity of numbers, especially of cherish numbers, may result as a problem. As a consequence the question of an efficient allocation of numbers becomes more and more important. Especially, auctions as an economic mechanism for the allocation of property rights should be taken into consideration to become the appropriate assignment method.

The paper starts by presenting the main issues discharged by the regulatory authority: structuring, configuration and publication of the numbering space, specification of the requirements of users, administration of the data bank, direct assignment of numbers, monitoring of the user rights. Independent of the specific allocation mechanism the determination of the assignment fee is essential with respect to the incentive for an efficient use of the numbers. Therefore, we discuss the different ways how to calculate such assignment fees. Potential principles are to cover administrative costs, a percentage of revenue or profit, administrative incentive pricing (determination of the opportunity costs) and auctions in which fees are endogenously determined. Then we scrutinize the different assignment mechanisms: first-come first-served, beauty contest, lotteries and auctions. The focus of the paper are market mechanisms to assign numbers. Therefore the discussion of auctions is more explicit. The basic principles of auctions and prerequisites to apply an auction are presented. The traditional forms of auction designs are sketched.

Auctions make only sense if the value of the items to be auctioned are significant and if some people are interested in the same items. In our context we have to address the question: What’s the value of a number? What determines the value of a number?

Against this background we consider former, actual and proposed assignment mechanisms for numbers in Germany to discuss whether auctions would be a better way to allocate these numbers.

Number trading and ways to prevent hoarding of numbers are two other topics which are always addressed when talking about number allocations. Finally, we give a résumé.

Only German language version available.

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