In recent years, there has been much interest in the use of auctions in utility service industries in the UK and in other countries. The most publicised examples have been franchise auctions eg. auctions for 3G mobile telecom spectrum, the UK auctions of railways operating franchises, etc. However, there has been growing interest in the use of auctions of network capacity - auctions both (a) for allocation of and use of existing capacity and (b) for investment in new capacity. It is these topics that are discussed in this and the other papers included in this special issue of Utility Policy. These papers were presented and discussed at a Conference organised by the London Business School's Regulation Initiative in April 2002.