Optimal Spectrum Allocation, CIDE, Mexico City


Presentation at CIDE, Mexico City.  Mobile nets are immensely productive; no other wireless application close; opportunity cost of liberal licenses ~ $0; spectrum for liberal licenses highly valuable; more competition; more capacity (with or without extra nets); consumer gains swamp auction revenues; restricting spectrum a welfare loser; delays, reserve prices, bidder credits, etc. Total U.S.A. License Auction Revs: authorized 1993, began July 1994; 1994 – 2005: $45.1 billion bid; 1994 – 2005: only ~ $20 billion paid; bidding credits to defaults (PCS C, F); Sept. 2006 (AWS): $13.7 billion; Mar. 2008 (700 MHz): $19.4 billion; ~ $53 billion total, 1994-2008. As of 2006, Value/MHz = $150 mil.; U.S. mobile market allocated ~ 190 MHz; Imputed national value between: $28.5 billion – AWS ($13.7B/90MHz in 2006); $71.0 billion – 700 MHz ($19.4B/52 MHz in 2008); Consumer surplus easily exceeds $150 billion annually (see 2006 data).


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