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http://ssrn.com/abstract=324903
 
 

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Letter to FCC Chairman Powell Concerning Auction 35


Peter Cramton


University of Maryland - Department of Economics

Robert W. Crandall


Brookings Institution; AEI-Brookings Joint Center for Regulatory Studies

Robert W. Hahn


University of Oxford, Smith School; Georgetown University

Robert G. Harris


University of California, Berkeley - Business & Public Policy Group

Jerry A. Hausman


Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Thomas W. Hazlett


George Mason University Dept. of Economics and School of Law

Douglas Lichtman


University of California, Los Angeles (UCLA) - School of Law

Paul W. MacAvoy


Yale School of Management; Yale Graduates Energy Study Group

Paul R. Milgrom


Stanford Graduate School of Business

Gregory Sidak


Tilburg Law & Economics Center (TILEC), Tilburg University; Criterion Economics, L.L.C.

Richard Schmalensee


Massachusetts Institute of Technology (MIT) - Sloan School of Management

Hal J. Singer


Economists Incorporated

Vernon L. Smith


Chapman University - Economic Science Institute; Chapman University School of Law

William E. Taylor III


Marsh & McLennan Companies - Cambridge Office

David Teece


University of California, Berkeley - Business & Public Policy Group

August 16, 2002


Abstract:     
Fifteen scholars on auctions and telecommunications regulation urge the FCC to cancel bids made in, or permit winning bidders to opt out of, the reauction of the NextWave licenses in Auction 35.

For auctions to function efficiently, buyers and sellers must follow basic rules, including the rule that a seller deliver in a timely manner what the winning bidder has purchased. This rule has not been applied in Auction 35. The FCC auctioned something that it did not have - immediate access to the spectrum for the winning bidders. Thus, if the FCC forces the winning bidders to pay, they will sue the agency for forcing them to pay for something that they did not receive. Alternatively, their shareholders will sue the companies. Meanwhile, wireless carriers have invested in less efficient technologies to meet capacity needs.

The FCC has said that its current policy toward Auction 35 seeks to "protect the integrity" of the spectrum auction process. The opposite is already occurring. The FCC increases uncertainty in the wireless market if it holds carriers accountable for winning bids for licenses that the agency cannot deliver. Bidders will discount their future bids accordingly, and auction revenues will fall. That outcome does not benefit consumers, taxpayers, workers, or shareholders.

Number of Pages in PDF File: 3

JEL Classification: A1,E6,E61,H8,K2,K23,L5,L51,O3,O31,O38

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Date posted: December 6, 2002  

Suggested Citation

Cramton, Peter and Crandall, Robert W. and Hahn, Robert W. and Harris, Robert G. and Hausman, Jerry A. and Hazlett, Thomas W. and Lichtman, Douglas and MacAvoy, Paul W. and Milgrom, Paul R. and Sidak, Gregory and Schmalensee, Richard and Singer, Hal J. and Smith, Vernon L. and Taylor, William E. and Teece, David, Letter to FCC Chairman Powell Concerning Auction 35 (August 16, 2002). Available at SSRN: http://ssrn.com/abstract=324903 or http://dx.doi.org/10.2139/ssrn.324903

Contact Information

Peter C. Cramton
University of Maryland - Department of Economics ( email )
College Park, MD 20742
United States
301-405-6987 (Phone)
301-405-3542 (Fax)
Robert Crandall
Brookings Institution ( email )
1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States
202-797-6291 (Phone)
202-797-6181 (Fax)
AEI-Brookings Joint Center for Regulatory Studies
1150 17th Street, N.W.
Washington, DC 20036
United States
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
Robert G. Harris
University of California, Berkeley - Business & Public Policy Group ( email )
545 Student Services Building
Berkeley, CA 94720
United States
510-450-6739 (Phone)
Jerry A. Hausman
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
Room E52-271a
Cambridge, MA 02142
United States
617-253-3644 (Phone)
617-253-1330 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Thomas W. Hazlett
George Mason University Dept. of Economics and School of Law ( email )
George Mason School of Law
3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-4244 (Phone)
HOME PAGE: http://mason.gmu.edu/~thazlett/

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Douglas Gary Lichtman
University of California, Los Angeles (UCLA) - School of Law ( email )
385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-267-4617 (Phone)
Paul W. MacAvoy
Yale School of Management ( email )
920 Indian Beach Dr.
Sarasota, FL 34234
United States
941-952-1692 (Phone)
HOME PAGE: http://yalepress.yale.edu/yupbooks/book.asp?isbn=9780300121285

Yale Graduates Energy Study Group
New Haven, CT 06520
United States
Paul R. Milgrom
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States

J. Gregory Sidak (Contact Author)
Tilburg Law & Economics Center (TILEC), Tilburg University ( email )
Tilburg, 5000 LE
Netherlands
Criterion Economics, L.L.C. ( email )
1614 20th Street, N.W.
Washington, DC 20009
United States
(202) 518-5121 (Phone)
HOME PAGE: http://www.criterioneconomics.com
Richard Schmalensee
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
Room E62-525
Cambridge, MA 02142
United States
617-253-2957 (Phone)
617-258-6617 (Fax)
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
Vernon L. Smith
Chapman University - Economic Science Institute ( email )
One University Dr.
Orange, CA 92866
United States
714-628-2830 (Phone)
Chapman University School of Law ( email )
One University Drive
Orange, CA 92866-1099
United States
William E. Taylor III
Marsh & McLennan Companies - Cambridge Office ( email )
One Main Street, 5th Floor
Cambridge, MA 02142
United States
617-621-2615 (Phone)
David J. Teece
University of California, Berkeley - Business & Public Policy Group ( email )
545 Student Services Building
Berkeley, CA 94720
United States
(510) 647-1075 (Phone)
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