Date Issued: 
October 1, 1980

Douglas Webbink.  

OSP Working Paper 2 (Oct 1980) reviews those economic concepts known as “spectrum deregulation” or “spectrum economics.”  These concepts have been contentious issues, Webbink observes, because many licensees are afraid that spectrum deregulation implies that they would lose much of their existing spectrum or would have a smaller probability of obtaining additional spectrum in the future.

Webbink argues, however, that auctions and fees are only two of the possible techniques and not necessarily the most important techniques for decreasing the amount of government intervention in licensee use of the spectrum.  Moreover, he argues that many existing licensees already pay a high price to use the spectrum but that cost typically takes the form of an indirect and often hidden legal and engineering price of obtaining and keeping an FCC license. 

Webbink concludes that spectrum deregulation does imply more reliance on market forces and less reliance on government decision making; it also implies giving licensees more freedom to decide how much spectrum they would like to use (and are willing to pay to use or sell the right to use if they do not want it).

Working Paper Link