Where there is excess demand for licences, they can be assigned by lot (i.e. by randomly choosing winners from all qualified licence applicants). If the licences are potentially valuable, thousands or even millions might apply.
Although this procedure may seem attractive and equitable, it has many drawbacks. First, if many apply, the cost of administration may be large, especially if all applicants have to be vetted for suitability. Second, the lucky winners may not have the qualifications to operate the licences efficiently. If they are not allowed to sell the licence, this may be a recipe for disaster. And if, thirdly, they are allowed to sell them on to efficient operators, the winners will be appropriating auction proceeds which would otherwise go to the government.