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An Oligopoly Model for Analyzing and Evaluating (Re)-Assignments of Spectrum Licenses

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  • Simon Loertscher
  • Leslie Marx

Abstract

The Communications Act requires the Federal Communications Commission to assess whether proposed spectrum license transactions serve the public interest, convenience, and necessity. We review the FCC’s implementation of this component of the Act. We provide a tractable economic model of competition among wireless service providers in which spectrum licenses are a cost-reducing input. This model allows us to evaluate the effects of (re-)assigning spectrum licenses on economic outcomes and to define operational measures of “warehousing” licenses. Calibrating the model, we find little evidence of warehousing and that the approved Verizon-T-Mobile-SpectrumCo transaction increased social surplus. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Simon Loertscher & Leslie Marx, 2014. "An Oligopoly Model for Analyzing and Evaluating (Re)-Assignments of Spectrum Licenses," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 45(3), pages 245-273, November.
  • Handle: RePEc:kap:revind:v:45:y:2014:i:3:p:245-273
    DOI: 10.1007/s11151-014-9427-y
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    1. Jeanjean, Francois & Lebourges, Marc & Liang, Julienne, 2018. "Mobile investment and traffic per capita tend to increase with license duration," 29th European Regional ITS Conference, Trento 2018 184949, International Telecommunications Society (ITS).

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