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Spectrum allocation in Latin America: An economic analysis

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  • Hazlett, Thomas W.
  • Muñoz, Roberto E.

Abstract

As elsewhere, wireless markets play a crucial role in Latin American economic growth. Mobile telephone networks increasingly provide the communications infrastructure that has largely been lacking throughout the region. Yet, governments have generally made only modest allocations of bandwidth available to Latin American wireless operators, either absolutely (in terms of spectrum each country could allocate at modest opportunity cost) or relative to countries in North America, Asia and the European Union. Using an empirical model estimated on mobile phone data for international markets, we show that very large social benefits are available to countries that make more spectrum available for mobile phone markets. We conduct simulations using our calibrated model to provide lower bounds for country-by-country gains from larger allocations. We also discuss the impact of alternative regulatory regimes on the feasibility to achieve those social gains.

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Bibliographic Info

Article provided by Elsevier in its journal Information Economics and Policy.

Volume (Year): 21 (2009)
Issue (Month): 4 (November)
Pages: 261-278

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Handle: RePEc:eee:iepoli:v:21:y:2009:i:4:p:261-278

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Web page: http://www.elsevier.com/locate/inca/505549

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Keywords: Spectrum allocation Auctions Revenue extraction Mobile telephone competition Telecommunications policy Latin American economic development;

References

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  1. Thomas W. Hazlett & Roberto E. Muñoz, 2009. "A welfare analysis of spectrum allocation policies," RAND Journal of Economics, RAND Corporation, vol. 40(3), pages 424-454.
  2. Hazlett, Thomas W, 1998. "Assigning Property Rights to Radio Spectrum Users: Why Did FCC License Auctions Take 67 Years?," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 529-75, October.
  3. Leff, Nathaniel H, 1984. "Externalities, Information Costs, and Social Benefit-Cost Analysis for Economic Development: An Example from Telecommunications," Economic Development and Cultural Change, University of Chicago Press, vol. 32(2), pages 255-76, January.
  4. Thomas W. Hazlett, 2008. "Optimal Abolition of FCC Spectrum Allocation," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 103-128, Winter.
  5. Norton, Seth W, 1992. "Transaction Costs, Telecommunications, and the Microeconomics of Macroeconomic Growth," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 175-96, October.
  6. Dasgupta, Susmita & Lall, Somik & Wheeler, David, 2001. "Policy reform, economic growth, and the digital divide - an econometric analysis," Policy Research Working Paper Series 2567, The World Bank.
  7. Thomas W. Hazlett, 2008. "Property Rights and Wireless License Values," Journal of Law and Economics, University of Chicago Press, vol. 51(3), pages 563-598, 08.
  8. Shane M. Greenstein & Pablo T. Spiller, 1996. "Estimating the Welfare Effects of Digital Infrastructure," NBER Working Papers 5770, National Bureau of Economic Research, Inc.
  9. Hazlett Thomas W & Ibarguen Giancarlo & Leighton Wayne, 2007. "Property Rights to Radio Spectrum in Guatemala and El Salvador: An Experiment in Liberalization," Review of Law & Economics, De Gruyter, vol. 3(2), pages 437-484, December.
  10. Hardy, Andrew P., 1980. "The role of the telephone in economic development," Telecommunications Policy, Elsevier, vol. 4(4), pages 278-286, December.
  11. Faulhaber, Gerald R., 2006. "The future of wireless telecommunications: Spectrum as a critical resource," Information Economics and Policy, Elsevier, vol. 18(3), pages 256-271, September.
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Cited by:
  1. 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.

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