The debate over whether governments should either auction off or hold 'beauty contests' for the new spectrum needed to support third generation (3G) mobile telecommunication licences looks set to rage on.
In Britain, where the authorities are most advanced in their disposal of 3G spectrum, the auction process is firmly established, and vigorously defended.
At the last count, the cumulative bidding for the five licences on offer in Britain had reached GBP22 billion (about HK$270.64 billion), with the fiercest battle being waged between British Telecommunications (BT) and Vodafone AirTouch.
Not only is the number more than four times greater than the initial expectation of revenue from spectrum sales, but it has now been strongly signalled by the British Government that the proceeds are to be used to ease national debt.
This has immediately led to speculation that other European governments could follow suit, holding auctions that analysts estimate could end up attracting more than 100 billion euros (about HK$731.15 billion) in the 11-nation eurozone alone.
The knock-on effect would not only be to push the whole area into budget surplus, it would also have a huge impact on the international bond market, which looks to European government bond issuance as a steady stream of supply. For any government sitting on a deficit, the argument for the auction process appears overwhelming.