What Ever Happened to Consumer Welfare? How the FCC's International Spectrum Relocation Policies Deter -- Rather than Promote -- New Facilities-Based Entry for Advanced Satellite Telecoms Services
Lawrence J. Spiwak
Phoenix Center for Advanced Legal & Economic Public Policy Studies
Telecommunications & Space Journal, Vol. 6, No. 291, 1999
This paper examines the FCC's ill-conceived notion that new entrants into international satellite markets should be forced to pay spectrum relocation fees just as new entrants had to pay in the U.S. domestic PCS context. This paper concludes that such a "cookie-cutter" approach to spectrum management is per se arbitrary and capricious, however, because what is good for the U.S. domestic wireless industry is not a fortiori good for the international commercial satellite industry as well. While it is true that there are certain valuable lessons that can be learned from the U.S. domestic experience and applied onto the international market, because the domestic and international markets (as the FCC often readily admits) have very different structural economic characteristics, these markets, therefore, do not warrant homogeneous regulatory treatment either. As such, the FCC's policies harm -- rather than promote -- consumer welfare because they inter alia: (a) erect -- rather than eliminate -- barriers to entry and deter competition; (b) fail to reflect the international context in which spectrum use occurs; (c) increase -- rather than reduce -- transaction costs to make entry prohibitive; and (d) deter -- rather than accelerate -- expansion of competitive advanced broadband services to rural and poor areas (whether domestic or abroad).
Number of Pages in PDF File: 26
Keywords: Satellite, spectrum, barriers to entry
JEL Classification: K23, K33, L1, L5, L98, L99, O14, O33, O38
Date posted: October 22, 2004
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