Reverse Auctions and Universal Telecoms Service
Scott Wallsten’s recent paper (April 2008), Reverse Auctions and Universal Telecommunications Service: Lessons from Global Experience, provides an update on the use of reverse auctions (or least cost subsidies, or reverse subsidies). This mechanism allows market actors to bid for what they calculate will be the minimum needed subsidy to extend networks to rural and remote areas, with the concession awarded to the lowest bid. This has been an effective way of setting competitive terms for serving what were perceived to not be attractive or viable markets. Wallsten’s paper reviews experiences with reverse auctions in Australia, Chile, Colombia, India, Nepal, and Peru - and further discusses their implications for the US.
Click here to go to the free download page at the Social Sciences Research Network.
See also LIRNEasia research in this area: “Smart Subsidies - Getting the Conditions Right: The experience of expanding rural telecoms” in Nepal by Harsha de Silva & Ratna Kaji Tuladhar, Chapter 7 in Diversifying Participation in Network Development (2007).
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