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Money Out of Thin Air: The Nationwide Narrowband PCS Auction

The Federal Communications Commission held its first auction of radio spectrum at the Nationwide Narrowband PCS Auction in July 1994. The simultaneous multiple-round auction, which lasted five days, was an ascending bid auction in which all licenses were offered simultaneously. This paper describes the auction rules and how bidders prepared for the auction. The full history of bidding is presented. Several questions for auction theory are discussed. In the end, the government collected $617 million for ten licenses. The auction was viewed by all as a huge success-an excellent example of bringing economic theory to bear on practical problems of allocating scarce resources.

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Paper provided by University of Maryland, Department of Economics - Peter Cramton in its series Papers of Peter Cramton with number 95jems.

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Length: 77 pages
Date of creation: 1995
Date of revision: 09 Jun 1998
Publication status: Published in Journal of Economics and Management Strategy, 4:2, Summer 1995, pages 267-343.
Handle: RePEc:pcc:pccumd:95jems
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Economics Department, University of Maryland, College Park, MD 20742-7211

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