Summary

  • Ofcom’s planned sale covers one 25 MHz lot, one sealed round and a £5 million reserve.
  • The winner normally pays the second-highest valid bid; a tie for highest instead makes the randomly selected winner pay the tied maximum.

Three bids, three possible bills.

Take a hypothetical £8 million, £6 million and £5 million in valid bids. The £8 million bidder wins, but pays £6 million. If £8 million is the only valid bid, the reserve price sets the bill at £5 million. Now make the top two bids £8 million each. Ofcom draws the winner at random, and that winner pays £8 million. The same headline “second-price auction” describes the first result, but hides the third.

That distinction sits at the centre of Ofcom’s 30 October 2026 auction documents. The 1492–1517 MHz band is offered as one 25 MHz lot in a single sealed round. The reserve is £5 million. A unique highest valid bid wins at the next valid bid’s value; if there is no other valid bid, the winner pays reserve. Equal highest valid bids trigger random selection, with the price set at that shared maximum.

There is a reason the tie rule does not invent a lower number. In a tied result, the highest losing offer is already equal to the highest winning offer. Ofcom’s final-draft statement says the randomly selected winner therefore pays the tied amount. The draw decides who receives the licence, not which price tier applies.

This makes “second price” a conditional rule, not a general promise of a discount. Bid committees need to model the tie branch separately from the ordinary case. If two firms independently reach the same ceiling, neither can assume that the winner will pay the next lower offer. The winner may owe the full ceiling it approved.

The documents describe a planned auction, not a completed one. Ofcom published the final draft Auction Regulations on 30 October and expected to make them in November. The rules will govern if they differ from the information memorandum. Ofcom expects applications from mid-January 2027, not before 14 January, and aims to complete the award before the end of February; those dates remain plans.

Ofcom says it will publish the winner, price, losing bidders and their bids after the award. That disclosure will let operators reconstruct which branch set the price. The public record gives no applicant count or actual bids yet, so demand and tie likelihood remain unknown.

Sources: Ofcom auction page; information memorandum; statement on the final-draft Auction Regulations.