Market Mechanisms and the Efficient Use and Management of Scarce Spectrum Resources

Phoenix Center Policy Paper No. 46

43 Pages Posted: 14 Jan 2014

See all articles by Thomas Randolph Beard

Thomas Randolph Beard

Auburn University - Department of Economics

George S. Ford

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Lawrence J. Spiwak

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Michael L. Stern

Auburn University; Phoenix Center for Advanced Legal & Economic Public Policy Studies

Date Written: December 1, 2013

Abstract

Today, the Federal Government has assignments for about half of what is considered to be “beachfront” spectrum. However, most agree that Government agencies, and the Government as a whole, use and manage spectrum resources inefficiently. As such, much attention is now focused on improving the Federal Government’s efficiency in the use and management of its spectrum resources with the aim of freeing up spectrum which can be repurposed for the spectrum-constrained commercial sector. In this Paper, we first tackle Government spectrum use and demonstrate that the “ghost market” approaches commonly proposed to enhance public sector efficiency in spectrum such as a General Services Administration-type model to the recent spectrum sharing proposal by the President’s Council of Advisors on Science and Technology use may not, in the long-term, be effective. Next, we turn to Government spectrum management and present a general equilibrium model addressing spectrum assignment between public and private users using either auctions or leasing. We find that Government management of spectrum resources is not desirable beyond some minimum level. In fact, any proposal that contemplates the leasing of Government-managed spectrum to the private sector may be presumed to include “too little” auctioning of Government spectrum to the private sector in the form of exclusive licenses. We conclude that if the goal of spectrum use and management is economic efficiency, then policymakers should expand the private sector’s management of the nation’s scarce spectrum resources.

Keywords: spectrum, PCAST, NTIA, government spectrum

JEL Classification: K23, L51, L52, L96, O38

Suggested Citation

Beard, Thomas Randolph and Ford, George S. and Spiwak, Lawrence J. and Stern, Michael L., Market Mechanisms and the Efficient Use and Management of Scarce Spectrum Resources (December 1, 2013). Phoenix Center Policy Paper No. 46. Available at SSRN: https://ssrn.com/abstract=2378938 or http://dx.doi.org/10.2139/ssrn.2378938

Thomas Randolph Beard

Auburn University - Department of Economics ( email )

415 W. Magnolia
Auburn, AL 36849-5242
United States

George S. Ford

Phoenix Center for Advanced Legal & Economic Public Policy Studies ( email )

5335 Wisconsin Avenue, NW
Suite 440
Washington, DC 20015
United States

Lawrence J. Spiwak (Contact Author)

Phoenix Center for Advanced Legal & Economic Public Policy Studies ( email )

5335 Wisconsin Avenue, NW
Suite 440
Washington, DC 20015
United States
202-274-0235 (Phone)
202-318-4909 (Fax)

HOME PAGE: http://www.phoenix-center.org

Michael L. Stern

Auburn University ( email )

415 West Magnolia Avenue
Auburn, AL 36849
United States

Phoenix Center for Advanced Legal & Economic Public Policy Studies

5335 Wisconsin Avenue, NW
Suite 440
Washington, DC 20015
United States

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