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A welfare analysis of spectrum allocation policies

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  • Thomas W. Hazlett
  • Roberto E. Muñoz

Abstract

Economic analysis of spectrum policy focuses on government revenues derived via competitive bidding for licenses. Auctions generating high bids are identified as successful and those with lower receipts as fiascoes. Yet spectrum policies that create rents impose social costs. Most obviously, rules favoring monopoly predictably increase license values but reduce welfare. This article attempts to shift analytical focus to efficiency in output markets. In performance metrics derived by comparing 28 mobile telephone markets, countries allocating greater bandwidth to licensed operators and achieving more competitive market structures are estimated to realize efficiencies that generally dominate those associated with license sales. Policies intended to increase auction receipts (e.g., reserve prices and subsidies for weak bidders) should be evaluated in this light. Copyright (c) 2009, RAND..

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Bibliographic Info

Article provided by RAND Corporation in its journal The RAND Journal of Economics.

Volume (Year): 40 (2009)
Issue (Month): 3 ()
Pages: 424-454

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Handle: RePEc:bla:randje:v:40:y:2009:i:3:p:424-454

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Cited by:
  1. Hazlett, Thomas W. & Muñoz, Roberto E., 2009. "Spectrum allocation in Latin America: An economic analysis," Information Economics and Policy, Elsevier, vol. 21(4), pages 261-278, November.
  2. Peter Cramton & Evan Kwerel & Gregory Rosston & Andrzej Skrzypacz, 2012. "Using Spectrum Auctions to Enhance Competition in Wireless Services," Papers of Peter Cramton 11ckrs, University of Maryland, Department of Economics - Peter Cramton, revised 2012.
  3. Pagnozzi, Marco, 2009. "Resale and bundling in auctions," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 667-678, November.
  4. Basaure, Arturo & Casey, Thomas R. & Hämmäinen, Heikki, 2012. "Different regulation paths towards cognitive radio technologies: Cases of Finland and Chile," 23rd European Regional ITS Conference, Vienna 2012 60373, International Telecommunications Society (ITS).
  5. Sean Lyons, 2006. "Measuring the Benefits of Mobile Number Portability," Trinity Economics Papers tep2009, Trinity College Dublin, Department of Economics.
  6. Vincent van den Berg, 2013. "Over- and Under-Bidding in Tendering," Tinbergen Institute Discussion Papers 13-033/VIII, Tinbergen Institute.
  7. Stavins, Robert Norman, 2010. "The Problem of the Commons: Still Unsettled After 100 Years," Scholarly Articles 4450130, Harvard Kennedy School of Government.
  8. Park, Minsoo & Lee, Sang-Woo & Choi, Yong-Jae, 2011. "Does spectrum auctioning harm consumers? Lessons from 3G licensing," Information Economics and Policy, Elsevier, vol. 23(1), pages 118-126, March.
  9. Vincent van den Berg, 2012. "Advantaged Bidders in Franchise Auctions," Tinbergen Institute Discussion Papers 12-117/VIII, Tinbergen Institute.
  10. Hahn, Robert W. & Wallsten, Scott, 2009. "An Economic Perspective on a U.S. National Broadband Plan," Working paper 9, Regulation2point0.
  11. Fulvio Minervini & Diego Piacentino, 2007. "Spectrum Management and Regulation: Towards a Full-Fledged Market for Spectrum Bands?," Working Papers 07-2007, Macerata University, Department of Studies on Economic Development (DiSSE), revised Nov 2008.
  12. Amnon Levy & Michael R. Caputo & Benoît Pierre Freyens, 2013. "Royalties, Entry and Spectrum Allocation to Broadcasting," Economics Working Papers wp13-02, School of Economics, University of Wollongong, NSW, Australia.
  13. Vincent van den Berg, 2012. "Advantaged Bidders in Franchise Auctions," Tinbergen Institute Discussion Papers 12-117/VIII, Tinbergen Institute.
  14. Vincent A.C. van den Berg, 2013. "Tender Auctions with Existing Operators Bidding," Tinbergen Institute Discussion Papers 13-117/VIII, Tinbergen Institute.

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