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FCC Releases Working Paper on Allocating Interference Rights

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Released: June 5, 2012

Federal Communications Commission

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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action.
See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

June 5, 2012


Examines How a Market Can Be Used to Identify the Efficient Allocation of
Interference Rights Among Licensees and Other Interested Parties
The Federal Communications Commission (FCC) today released the fourth of its new FCC Staff Working
Papers. Entitled “Using a Market to Obtain the Efficient Allocation of Interference Rights,” this paper is
by Mark M. Bykowsky and William W. Sharkey, Senior Economists in the Office of Strategic Planning
and Policy Analysis (OSP). Their paper examines possible alternatives to the current administrative
process for identifying the efficient allocation of signal interference rights.
The paper shows how the efficient allocation of such rights can arise from a multi-player game embedded
into an auction where participants place bids reflecting the benefit or harm they would expect to incur due
to signal interference. It also considers how to identify the efficient set of interference rights, as well as
the efficient licensee, for yet-to-be auctioned spectrum (e.g., Advanced Wireless Services-3). In both
cases, the authors demonstrate that an efficient outcome requires market participants to select a particular
Nash equilibrium from a possibly large set of equilibria, a process that also may require them to solve a
“collective action” problem.
The FCC Staff Working Paper series has replaced all of the earlier working paper series that had been
issued by individual bureaus and offices. It is intended to encourage staff research that furthers the
“expert” function of the agency and build agency intellectual capital. This active research program is
managed by the Office of Strategic Planning and Policy Analysis (OSP).
The full text of this working paper is available at The OSP contact
is Chuck Needy, who can be reached at
-FCC -

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