Comparative Statics On The Allocation Of Spectrum

TL;DR

This paper compares how different spectrum allocation policies affect social welfare across various market structures, using mathematical models to analyze both free and paid bandwidth scenarios.

Contribution

It provides a comparative analysis of spectrum allocation impacts on social welfare under different market structures and pricing conditions using mathematical models.

Findings

Allocating spectrum to licensed providers generally yields higher social welfare than unlicensed access.

Market structure significantly influences the benefits derived from spectrum allocation.

Charging for bandwidth can alter optimal allocation strategies and welfare outcomes.

Abstract

Allocation of spectrum is an important policy issue and decisions taken have ramifications for future growth of wireless communications and achieving universal connectivity. In this paper, on a common footing we compare the social welfare obtained from the allocation of new spectrum under different alternatives: to licensed providers in monopolistic, oligopolistic and perfectly competitive settings, and for unlicensed access. For this purpose we use mathematical models of competition in congestible resources. Initially we assume that any new bandwidth is available for free, but we also generalize our results to include investment decisions when prices are charged for bandwidth acquisition.