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http://ssrn.com/abstract=1229782
 
 

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The Static and Dynamic Inefficiency of Abandoning Unrestricted Auctions for Spectrum: A Critique of Professor Wilkie's Analysis of the M2Z Proposal


Robert W. Hahn


University of Oxford, Smith School; Georgetown University

Allan T. Ingraham


Economists Incorporated; affiliation not provided to SSRN

J. Gregory Sidak


Criterion Economics, L.L.C.

Hal J. Singer


Economists Incorporated

August 15, 2008


Abstract:     
M2Z Networks, Inc. and its consulting economist, Professor Simon Wilkie, have asked the Federal Communications Commission (FCC), when allocating the third block of the Advanced Wireless Services (AWS) spectrum, to abandon the agency's established auction process and instead award that spectrum directly to M2Z. They argue that the FCC should embrace M2Z's business plan because, relative to some alternative use of the spectrum that would emerge from an unrestricted auction, M2Z's plan would generate significant benefits for broadband consumers. These putative benefits include (1) providing a basic, "free" mobile broadband service to new subscribers, and (2) reducing the price of broadband for existing subscribers. If, contrary to M2Z's proposal, the FCC does auction the AWS-3 spectrum, M2Z urges the FCC to impose requirements on the winning bidder that mirror M2Z's business plan. This paper analyzes the benefits and costs of M2Z's proposal by comparing it with an allocation based on an unrestricted auction of spectrum rights. We find that M2Z's proposal would likely cause substantial economic losses in both static and dynamic economic efficiency.

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Date posted: August 18, 2008 ; Last revised: December 25, 2013

Suggested Citation

Hahn, Robert W. and Ingraham, Allan T. and Sidak, J. Gregory and Singer, Hal J., The Static and Dynamic Inefficiency of Abandoning Unrestricted Auctions for Spectrum: A Critique of Professor Wilkie's Analysis of the M2Z Proposal (August 15, 2008). Available at SSRN: http://ssrn.com/abstract=1229782 or http://dx.doi.org/10.2139/ssrn.1229782

Contact Information

Robert W. Hahn
University of Oxford, Smith School ( email )
Oxford
United Kingdom
Georgetown University
Georgetown Center for Business and Public Policy
Washington, DC 20057
United States
Allan T. Ingraham
Economists Incorporated ( email )
2121 K St NW
Suite 1100
Washington, DC 20037
United States
202-747-3540 (Phone)
HOME PAGE: http://www.naviganteconomics.com
affiliation not provided to SSRN
J. Gregory Sidak (Contact Author)
Criterion Economics, L.L.C. ( email )
1717 K Street, N.W.
Washington, DC 20006
United States
(202) 518-5121 (Phone)
HOME PAGE: http://www.criterioneconomics.com
Hal J. Singer
Economists Incorporated ( email )
2121 K Street N.W.
Suite 1100
Washington, DC 20037
United States
202-747-3520 (Phone)
HOME PAGE: http://www.ei.com/viewprofessional.php?id=71
Feedback to SSRN


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