The Case for Unlicensed Spectrum

32 Pages Posted: 24 Oct 2011  

Paul R. Milgrom

Stanford University

Jonathan Levin

Stanford University - Department of Economics; Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Assaf Eilat

Compass Lexecon

Date Written: October, 23 2011

Abstract

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.

Keywords: radio spectrum, unlicensed spectrum, managed commons, wi-fi

JEL Classification: L51, L96, O38

Suggested Citation

Milgrom, Paul R. and Levin, Jonathan and Eilat, Assaf, The Case for Unlicensed Spectrum (October, 23 2011). Available at SSRN: https://ssrn.com/abstract=1948257 or http://dx.doi.org/10.2139/ssrn.1948257

Paul R. Milgrom

Stanford University ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
+1-650-723-3397 (Phone)
+1-419-791-8545 (Fax)

HOME PAGE: www.milgrom.net

Jonathan D. Levin (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Assaf Eilat

Compass Lexecon ( email )

1101 K Street NW
8th Floor
Washington, DC 20005
United States

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