Email: Jakeva@scmp.com Hip, hip, hooray, how nice to win one at last. Your correspondent has laboured long and hard to set out the alternative view on CyberPort, Disney Park, privatisations, copyright piracy and many other issues but without the slightest sign that officialdom has taken any notice. However, the publication yesterday of another government paper on third generation (3G) mobile phones has revealed a 180-degree turnaround in official thinking, and it is just possible that this column's consistent criticism of the earlier approach had a role to play in it. No modesty here. The favoured route for awarding 3G licences is now to be spectrum auctioning. All the talk of the 'beauty parade' approach and of 'reverse auctioning', two euphemisms for giving these valuable licences away for free, has suddenly vanished. Let's have that silver medal, please. The gold goes to an old friend, Stephen Brown of Kim Eng Securities, who was the first to point out to your correspondent that the Office of the Telecommunications Authority (Ofta) was thinking of a 3G giveaway and then badgered him to keep returning to the subject. Ofta is now trying to save face on the complete shift it has made (or been told to make) by calling it a 'hybrid method', as it requires pre-qualification of anyone who wishes to bid at the auction. It is no real change. This sort of auction naturally requires that all bidders must first be approved. But note the words of praise that the Government now has for auctioning - 'allocation of licences by spectrum auction is an allocation process that is efficient, fair and transparent'. Only six months ago an Ofta consultation paper said auctioning could have 'a serious dampening effect' on the roll-out of 3G, would favour big companies at the expense of innovative small players, could adversely affect the development of telecommunications and greatly increase business risk. So what happened to cause such a drastic change? First of all it was most likely the money involved. Judging by what spectrum auctioning brought in for Britain and Germany, it could raise up to HK$40 billion in Hong Kong, more than four times as much as the Government will take in from selling part of the MTRC. But common sense seems also to have prevailed at last. There is no practical way of awarding these licences other than to let the market decide what they are worth. Telecommunications is an industry changing so rapidly that no bureaucrat can devise a fair allocation method that stays fair for longer than a few months. In fact, few alternative proposals to auctioning have yet got past the stage of 'a way must be found to . . .' France and Spain opted for them but then take any dumb idea in economic practice and you can be sure the French have adopted it. In Spain the giveaway brought widespread public protest. Two additional features of Ofta's new thinking also stand out. The first is that our licensees must allow some proportion of their network capacity to be used, for a fee, by other mobile networks. There is nothing wrong with this as long as we have auctions. The auction will reveal what this concession is worth. We will get a market price for it. Fair enough. The second is that Ofta is deliberating whether the auction should be for a lump sum or royalties. That royalties idea could be a good one. A pay-as-you-go approach on a percentage schedule will give the public purse a big upside if 3G is hugely successful. It will also make the public income recurrent, which is what we need, and will lift some of the initial capital burden from the licensees. The thing we need to be sure of now is that the bidding will be reasonably open, not restricted to a few existing domestic operators. But it is a good feeling to know that we are headed the right way on this one at last.