There’s an important new study out that offers some historical analysis of spectrum auctions and how they can best be fashioned to benefit the economy and consumers . The study, by Georgetown University’s Center for Business and Public Policy visiting senior policy scholar Anna-Maria Kovacs, analyzed previous spectrum auctions to determine its consumer benefits and overall revenue impact.
Ms. Kovacs closely studied Auction 73, the 700 MHz spectrum auction run in 2008. She concluded that an auction open to all bidders, such as the 2008 Auction 73, can be successful for both competition and for maximizing federal revenue gains. Winning bidders in that auction included both small and larger companies – and that small players actually did well: bidders serving less than 10% of wireless subscribers won 28% of the MHz/POP (per unit of population).
What does this historical analysis mean today? As Congress takes the step to give the FCC the authority to hold incentive auctions to free-up additional spectrum, Ms. Kovacs analysis shows how an auction that is open to all bidders will yield the best results. Her study raises serious concerns about an auction that imposes restrictions on bidders:
“Bottom Line: That an incentive auction that imposes conditions and excludes the largest bidders will reduce proceeds to the Treasury is assured. That it will benefit consumers is uncertain, at best.”
The study clearly shows that an open auction is most beneficial to consumers and the economy.
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