What Really Matters in Spectrum Allocation Design

48 Pages Posted: 17 Nov 2011  

Thomas W. Hazlett

Clemson University

Roberto E. Munoz

Universidad Tecnica Federico Santa Maria

Diego Bernardo Avanzini

Central Bank of Chile; George Mason University School of Law

Date Written: October 27, 2011

Abstract

Wireless license auctions have successfully replaced “beauty contests” in many countries. Competitive bidding (1) puts spectrum rights in the hands of the most productive firms; (2) reduces rent-seeking costs; and (3) captures license values for the public, potentially reducing costly tax distortions. Economists and policy makers have asymmetrically focused on (3). Yet, the overwhelming consumer welfare gains are produced in output (retail services) markets, not by extracting revenues from the sale of spectrum inputs. This fact leads to powerful policy implications, supporting liberal policies that permit market rivals to (quickly) access abundant bandwidth.

Keywords: CMRS, CTIA, cellular, Connecting America, data services, FCC, Federal Communications Commission National Broadband Plan, IMF, International Monetary Fund, Internet, John McMillan, market inefficiencies, MOU, Milgrom, minutes of use, mobile telephone, networks, Paul Klemperer, text messages, web

JEL Classification: L96

Suggested Citation

Hazlett, Thomas W. and Munoz, Roberto E. and Avanzini, Diego Bernardo, What Really Matters in Spectrum Allocation Design (October 27, 2011). Northwestern Journal of Technology and Intellectual Property, Forthcoming; George Mason Law & Economics Research Paper No. 11-48. Available at SSRN: https://ssrn.com/abstract=1961225

Thomas W. Hazlett (Contact Author)

Clemson University ( email )

Clemson, SC 29634
United States
8646563430 (Phone)
8646564192 (Fax)

HOME PAGE: http://hazlett.people.clemson.edu/

Roberto E. Munoz

Universidad Tecnica Federico Santa Maria ( email )

Avenue Spain 1680
Valparaiso Square 110
Chile

Diego Bernardo Avanzini

Central Bank of Chile ( email )

Agustinas 1180
Santiago
Chile
+56-2-670-2000 (Phone)

George Mason University School of Law ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States
(703) 993-8000 (Phone)

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