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The Case for Unlicensed Spectrum

Listed author(s):
  • Paul Milgrom


    (Department of Economics, Stanford University)

  • Jonathan Levin


    (Department of Economics, Stanford University)

  • Assaf Eilat


    (Compass Lexecon)

Demand for wireless data communication has risen rapidly in the past few years, raising important policy questions about how to allocate radio spectrum for this purpose. Historically, the US government has designated some spectrum for licensed use and a smaller but significant amount for unlicensed use. We discuss the advantages of each approach, and explain why unlicensed spectrum in particular has been a catalyst for innovation, and an important complement to licensed spectrum. We also explain why allocating a portion of spectrum for unlicensed use need not reduce government revenue from selling spectrum licenses, and the serious flaws in proposed auction-based approaches for determining the fraction of spectrum to leave unlicensed.

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Paper provided by Stanford Institute for Economic Policy Research in its series Discussion Papers with number 11-002.

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Date of creation: Feb 2011
Handle: RePEc:sip:dpaper:11-002
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