Spectrum Buyouts:A Mechanism to Open Spectrum(revised December 2003)
AbstractTAlthough the current shortage of radio spectrum is usually attributed to the scarcity of spectrum, it is due to the inefficiency of legacy radio technologies and old systems of spectrum management. Regulatory reforms are being proposed to assign exclusive rights to spectrum, but such "market-oriented" allocation would be harmful because the spectrum is not a property but a protocol by which information is carried. New packet radio technologies enable efficient communications by sharing a wide band without licenses. However, it is difficult to relocate spectrum by persuading incumbents to give back their spectrum. Therefore we propose reverse auctions by which the government buys back spectrum from incumbents as an optional mechanism for spectrum relocation. The equilibrium price of this reverse auction will be much cheaper than that of ordinary spectrum auctions, because the former price will be close to the value of the band that is used least efficiently if the auction is competitive.
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Bibliographic InfoPaper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 02002.
Length: 22 pages
Date of creation: Mar 2002
Date of revision:
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ken Binmore & Paul Klemperer, 2001.
"The Biggest Auction Ever: the Sale of the British 3G Telecom Licenses,"
2002-W4, Economics Group, Nuffield College, University of Oxford, revised 01 Sep 2001.
- Ken Binmore & Paul Klemperer, 2002. "The Biggest Auction Ever: the Sale of the British 3G Telecom Licences," Economic Journal, Royal Economic Society, vol. 112(478), pages C74-C96, March.
- Binmore, Kenneth & Klemperer, Paul, 2002. "The Biggest Auction Ever: The Sale of the British 3G Telecom Licences," CEPR Discussion Papers 3214, C.E.P.R. Discussion Papers.
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