The Evolution of U.S. Spectrum Values Over Time

Posted: 7 Mar 2017  

Michelle P. Connolly

Duke University - Department of Economics

Nelson Sá

Vassar College

Christoper Roark

Duke University, Department of Economics, Students

Azeem Zaman

Duke University, Department of Economics, Students

Akshaya Trivedi

Independent

Date Written: March 6, 2017

Abstract

Using data on all FCC auctions of spectrum related to cellular services from 1996 to 2015 we attempt to identify intrinsic spectrum values from winning auction bids. Our data set includes 22 auctions and over 7,400 observations. We add two components to previous literature on this topic. First, we control for license and block specific auction rules that Connolly et al. (2017) catalogue. Second, we introduce different technological measures to separate out technological progress that effectively reduces spectrum scarcity from technological progress that increases demand for mobile applications. Previous papers have included simple time trends to reflect technological changes. Time trends are unable to distinguish between markets within the United States and conflate the effects of these two types of technological progress. Our results confirm previous theoretical and empirical findings for basic measures of demand such as population, population density, income levels, frequency levels, bandwidth, paired bands, etc. Our results also quantify the negative impact on headline winning bids won using bidding credits and the negative impact of specific rules such as the open access requirement in Auction 73. Increased spectral efficiency appears to be reducing spectrum scarcity as evidenced by its lowering of winning bids, while market level communications infrastructure has a significant positive impact on the demand for and price of spectrum. Additionally, auction results suggest that the relative value of higher frequency spectrum is increasing over time as new technologies develop.

Keywords: Spectrum, Spectrum Scarcity, Auctions, FCC, Auction Rules, Mobile Applications, Spectral Efficiency, Broadband Speeds, Closed Auctions, Small Bidders, The Google Effect

JEL Classification: L5, O3, K2

Suggested Citation

Connolly, Michelle P. and Sá, Nelson and Roark, Christoper and Zaman, Azeem and Trivedi, Akshaya, The Evolution of U.S. Spectrum Values Over Time (March 6, 2017). Available at SSRN: https://ssrn.com/abstract=2928332

Michelle P. Connolly (Contact Author)

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States
919-660-1819 (Phone)
919-684-8974 (Fax)

Nelson Sá

Vassar College ( email )

124 Raymond Avenue
Poughkeepsie, NY 12604
United States

Christoper Roark

Duke University, Department of Economics, Students ( email )

Durham, NC
United States

Azeem Zaman

Duke University, Department of Economics, Students ( email )

Durham, NC
United States

Akshaya Trivedi

Independent ( email )

No Address Available

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