Beyond spectrum auctions: Taking the next step to open spectrum access

Telecommunications Policy

Volumn 21, Issue 5, 1997, Pages 461-475

  Noam, Eli ^a  

^a The Sanford C Bernstein Co Center for Leadership and Ethics   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

COSTS; ECONOMICS; FREQUENCY ALLOCATION; INFORMATION TECHNOLOGY; MARKETING; PUBLIC POLICY;

SPECTRUM ALLOCATION; SPECTRUM AUCTIONS;

TELECOMMUNICATION;

EID: 0031166832     PISSN: 03085961     EISSN: None     Source Type: Journal    
DOI: 10.1016/S0308-5961(97)00028-1     Document Type: Article

References (37)

1. Kuhn, T S The Structure of Scientific Revolutions International Encyclopedia of Unified Science, Vol. 2, No. 2. University of Chicago Press, Chicago (1970).
2. Former FCC Commissioner Glen Robinson described it as the FCC's version of Medieval trial by ordeal (McMillan, J 'Why auction the spectrum?' Telecommunications Policy 1995 19(3) 192-199.)
3. The applicant for a fourth British radio licence was told in 1920 that "the ether is already full" (Briggs, A The History of Broadcasting in the United Kingdom: The Birth of Broadcasting in the United Kingdom, Vol. 1. London, Oxford University Press, Oxford (1961) p. 78).
4. For the early history of FM radio, see Noam, E (ed) Edwin Armstrong: A Man and His inventions, forthcoming.
5. In the early 1950s, only newspaper companies that had editorially endorsed Eisenhower for President had a chance at getting a TV licence. Stevenson supports were left out. In other cases, politicians served themselves directly. For Senator Lyndon B. Johnson's personal enrichment from television licences, see Caro, R A Years of Lyndon Johnson Knopf, New York (1990); In France, the allocation of the third mobile licence was politically sensitive enough to be decided by Prime Minister Balladour personally.
6. For a short while, it was substituted in the US by licence lotteries, a bizarre system that attracted almost half a million 'applications' out for a windfall.
7. Herzel L. Public interest' and the market in color television regulation. University of Chicago Law Review 18: 1951; 802-816.
8. Coase, R 'The federal communication commission' Journal of Law and Economics // 1959 II 1-40.
9. DeVany A S, Eckert R D, Meyers C J, O'Hara D, Scott R C. A property system approach to the electromagnetic spectrum: a legal-economic-engineering study. Stanford Law Review 21: 1969; 1499-1561.
10. Levin, H J The Invisible Resource-Use and Regulation of the Radio Johns Hopkins University Press, Baltimore (1971).
11. Smythe D W. Facing facts about the broadcasting business. University of Chicago Law Review 20: 1952; 100.
12. Baran, P Is the UHF Frequency Short-age a Self Made Problem?, Unpublished paper, presented at the Marconi Centennial Symposium, Bologna, Italy, 1995; Gilder, G 'Auctioning the Airways' Forbes, 11 April, 1994.
13. Baran, P Is the UHF Frequency Short- age a Self Made Problem?, Unpublished paper, presented at the Marconi Centennial Symposium, Bologna, Italy, 1995; Gilder, G 'Auctioning the Airways' Forbes, 11 April, 1994.
14. Noam, E 'Taking the next step beyond spectrum auctions: open spectrum access' IEEE Communications Magazine December 1995, 66-73.
15. It is a similar problem of pricing necessity discussed for the presently 'free' Internet system as it is experiencing congestion problems (MacKie-Mason, J K and Varian, H 'Economic FAQs about the Internet' Journal of Economic Perspectives 1994 8(3) 75-96).
16. Sable Communications of California Inc. v. FCC, 492 US 115, 109 S. Ct. 2829 and 106 L Ed.2nd 93 (1989).
17. Turner Broadcasting System Inc. v. FCC, 199 US Lexis 2078; 65 US LW 4208, 512 US 622, 129 L. Ed.2nd 497 and 114 S. Ct. 2445 (1994); American Civil Liberties Union v. Reno, 1996 US Dist. LEXIS 7919 (ED Penn. 1996). Turner Broadcasting System Inc. v. FCC, 1997 US Lexis 2078; 65 USLW 4208.
18. Jett, W May God save the Constitution (With Our Help) From its Friends, unpublished paper, 1996.
19. The short-term orientation of auction gains is also manifest in its accounting. Net revenues raised tend to be exaggerated because there is a trade-off between short-term revenue collection and longterm reduced tax yields. License payments can be depreciated against corporate income, and are also likely to reduce dividends. Under quite reasonable assumptions, each dollar of auction revenue tax is reduced by about 25 cents of reduced tax revenues in present value. And some revenue may never be collected as some of over-reaching bidders default.
20. Concern with effects of auction on service prices was raised by the European Commission in a Green Paper, The liberalization of telecommunications, superstructure and cable television networks'. Commission of the European Union and DG (1994) p 26.
21. McMillan op cit Ref 2.
22. In Canada, a 10% national preference.
23. Noll, R. Peck, M J and McGowan, J J Economic Aspects of Television Regulation Brookings Institution, Washington DC (1973).
24. Different frequencies have different characteristics, making them best suitable for certain types of applications, e.g. building penetration, the antenna size, cost of components, effects of atmospheric and climatic conditions, range, etc.
25. The adjustment of demand could be facilitated by some packets that are coded with a reservation price. Usage that does not require real-time is thus likely to make room when demand spikes occur.
26. Spectrum-agility would not dispossess existing frequency licensees. They would still have the assured right to their spectrum, at no charge (it such is the term of their licence). It might be possible, however, for others to use the frequencies, on a compensated access fee basis, at those times when they are not actually being used, or when such usage would not interfere, e.g. due to their low-power nature. Such reselling possibility also establishes a way to buy out existing licenced users.
27. Hazlett, T The rationality of US regulation of the broadcast spectrum' Journal of Law and Economics 1990 XXXIII, 133-175.
28. Smythe op cit Ref 11, p. 100.
29. Mitola, J The software radio architecture' IEEE Communications Magazine May 1995, pp. 26-38.
30. The cost per million of instructions per second (MIPS) for both digital signal processor and control processor units has dropped below $10 per MIPS, and drops by half every few years. The absolute number of operations per second per chip is in the hundreds of millions and sufficient now with digital mobile radio applications (Ibid; Baines, R., The DSP bottleneck' IEEE Communications Magazine, May 1995, 46-54).
31. DeVany, A S Implementing a market-based spectrum policy, conference on the law and economics of property rights to radio spectrum, Institute of Governmental Affairs, University of California, Davis (Marconi Conference Center, Tomales Bay, California, July 1996).
32. To levy restrictions up-front would lower auction revenues and would make the government pay for the obligation it imposes.
33. Just calling some rights property does not make them the base of an economic efficiency. Under feudalism and absolutism, many rights and privileges were property and for sale, such as military commands, and titles of nobility. People could sell themselves into bondage, or buy their freedom. Yet by no stretch could one describe these systems as efficient. It all depends on the context, which in economics means on the market structure. A property rights system that has a built-in tendency to oligopoly, for example, would not be (Posner, R A Economic Analysis of Law (2nd ed.) Little, Brown and Co, Boston, MA, 1977, p 33).
34. Crandall, R W New Zealand Spectrum Policy: A Model for the United States'?, Conference on the Law and Economics of Property Rights to Radio Spectrum, Institute of Governmental Affairs, University of California, Davis (Marconi Conference Center, Tomales Bay, California, July 1996).
35. Mueller M. New Zealand's revolution in spectrum management. Information Economics and Policy, 5: 1993; 159-177
36. Noam, E Interconnecting the Network of Networks forthcoming, 1997.
37. Mackie-Mason and Varian op cit Ref 14.