Telecommunications Auctions Integrity Pacts

Assure the integrity of the auction of bands and sub-bands of telecommunications channel in Ecuador

In 2002, the Latin American Corporation for Development (LCD) - the then-recognised chapter of Transparency International - signed a Cooperation Agreement to serve as civil society monitor to oversee the Integrity Pact applied between two state telecommunications bodies and bidders for the auction of bands and sub-bands of telecommunications channel.

The Integrity Pact was signed between the procurement authorities, namely the National Telecommunications Council (CONATEL) and the National Secretariat of Telecommunications (NST) and bidding companies.

The Latin American Corporation for Development acted as monitor of the Integrity Pact.

The above mentioned Cooperative Agreement, included three instruments that were implemented during the process:

• A ‘Code of Conduct’ that was signed by all public officials and employees involved in the bidding process, where they pledged to follow specific procedures on information handling and communications with bidding companies. Also they pledged not to accept to be hired by the company awarded the contract for a period of one year after it was signed;
• The ‘Guidelines for Transparency in the Auction Procedure’, that outlined the process that was followed and that had been agreed upon by CLD and CONATEL, and that included, among others issues: access to information, careful management of privileged and confidential information and the elimination of discretionary selection criteria. The majority of the suggestions made by CLD were accepted by CONATEL and introduced into the document; and
• The ‘Integrity Pacts’, to be signed by all bidders.

The tender was challenged, but ultimately ruled to be fair, with the LCD writing an independent report that improved transparency regarding the auction procedure. The application of the IP in the mobile telecoms industry was later viewed as opening up the market to increased competition and a subsequent drop in mobile telecoms prices by 25%. The tender value was USD 35 million.