Posted: 7 Mar 2017
Date Written: March 6, 2017
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: 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