Category Archives: Spectrum

What is the Effect of Regulation on Investment?

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What is the effect of regulation on investment?  At a high level of abstraction, it is impossible to say.  Rate-of-return regulation, for example, is criticized by economists for possibly encouraging too much investment—a principle known as the Averch-Johnson Effect.  On the other hand, if a firm fears that the regulator will alter the rules in a way that reduces the ability to earn profits on large, long-term capital investments, then the incentive to make such investments is reduced.  Importantly, the issue is not, as some claim, just about “regulatory uncertainty.”  There could be great uncertainty about future rule changes, but Continue Reading »

Does Political “Kabuki Theater” Help or Hurt the Regulatory Review Process?

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Recently, The Hill reported that Representatives Henry Waxman and Anna Eshoo—the ranking members of the House Energy and Commerce Committee and its Subcommittee on Communications and Technology, respectively—wrote a letter to Committee Chairman Fred Upton calling for a hearing to examine the proposed sale of wireless spectrum to Verizon by a consortium of cable companies.  Without question, Congress has the authority to hold a hearing on anything they deem relevant at any time they want.  That said, and with all due respect to the powers of the legislative branch, it is unclear what a politically-charged hearing would contribute at this Continue Reading »

A Response to Steven Crowley at GigaOm…

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This past February, we released a paper entitled Wireless Competition After Spectrum Exhaust.  As far as we can tell, this paper was the first serious attempt to model the effect of spectrum exhaust on mobile wireless competition.  We found that the addition of a binding capacity constraint (i.e., spectrum exhaust) to the standard Cournot model of competition reveals that that fewer—not more—firms would lead to lower price, more investment, and more jobs.  Our paper, not unexpectedly, raised a few eyebrows.  (For a CliffsNotes summary of our paper, see my February 8, 2012 blog post.) This weekend, Steven Crowley at GigaOm, Continue Reading »

Some Thoughts on the FCC’s New Interoperability NPRM…

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Last week, the Federal Communications Commission (“FCC”) issued an interesting Notice of Proposed Rulemaking or “NPRM.”  Basically, the FCC announced that assuming that some technical glitches can be worked out (and the agency was optimistic that they could), the FCC would like to see—either by voluntary agreement or by regulatory fiat—interoperability for mobile devices and equipment in the lower 700 MHz band. The agency’s rulemaking appears to be motivated by the desire to promote handset availability for the smaller and rural operators that purchased A block licenses in the 2008 auction.  According to these carriers, given their given their small Continue Reading »

Should Content Providers be Allowed to Contribute to the Cost of Mobile Bandwidth?

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A recent article in the Wall Street Journal caught my attention, and I’m sure the attention of many others.  The article—AT&T May Try Billing App Makers (February 28, 2012)—reported that AT&T and content providers were discussing ways in which the providers of mobile content, like video streaming, could pay for (in whole or part) the cost of the data traffic on behalf of the end user.  According to the article, the interest in a content-payer system is being encouraged by content developers that “could use the feature to drum up new business from customers wary of using data-heavy services like Continue Reading »

Are Spectrum Caps Back?

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As the old saying goes, “be careful what you wish for.”  Well, in the case of spectrum policy, we got our wish this month when President Obama signed into law the Payroll Tax Extension bill which contained sweeping provisions to free up much-needed new commercial spectrum. While the implementation of the specific provisions of such ambitious legislation will no doubt be complex and arduous, I would like to touch on two general themes in this particular post. First, we at the Phoenix Center are very proud that our research helped contribute to get the D Block assigned to public safety Continue Reading »

I Can “C” (Block) Clearly Now About Spectrum Auctions…

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The FCC, in its National Broadband Plan, concluded that U.S. commercial mobile carriers desperately need more spectrum, describing an industry operating with “just a fraction of the amount that will be necessary to match growing demand.”  Echoing the concern, FCC Chairman Julius Genachowski cautioned that “without action, demand for spectrum will soon outstrip supply. … If we don’t tackle the spectrum crunch now, network congestion will grow, and consumer frustration will grow with it.” In response, Congress is working on a partial solution to the impending shortfall, including authorizing the FCC to conduct an auction in which broadcasters voluntarily transfer Continue Reading »

Wireless Competition Under Spectrum Exhaust (CliffsNotes Edition)…

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As noted in our earlier blog posts, FCC Chairman Julius Genachowski seems to be of two minds when it comes to spectrum policy.  On one hand, he has taken great pains throughout his tenure to warn about the crucial issue of spectrum exhaust for commercial spectrum.  As also noted in our earlier blog posts, the FCC under Chairman Genachowski has at the same time expressed grave concerns about the concentrated nature of the U.S. wireless market in its CMRS Reports and, as such, has condemned large transactions such as AT&T/T-Mobile and imposed a de facto spectrum cap when it approved Continue Reading »

The Effect of Spectrum Exhaust on Mobile Market Structure and Performance…

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In an effort to address the current spectrum crunch for commercial spectrum, Congress is working on legislation to empower the FCC to hold voluntary incentive auctions to facilitate the transfer spectrum from broadcasters to mobile carriers.  FCC Chairman Julius Genachowski, among others, are complaining loudly that the House version of the bill unduly constricts the FCC’s ability to manipulate the mobile industry by excluding some bidders from the auction (primarily the nation’s two most successful wireless firms that a little more than half of all Americans have chosen as their wireless carrier).  As Larry explained in a post dated January Continue Reading »

Data Roaming, Spectrum Auctions, and the Widening of the Broadband Credibility Gap…

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As I noted in my January 17th blog post, FCC Chairman Julius Genachowski is complaining loudly that the bill now pending before the House Energy & Commerce Committee would unduly constrict the agency’s ability to condition any voluntary incentive auction for much-needed beachfront broadcast spectrum.  Recently, former FCC Chairman Reed Hundt came to his protégé’s defense, noting that: no one will benefit if Congress insists on telling the FCC—as the House bill does—who is eligible to bid or how the auction should be conducted. To have an efficient, fair, unpoliticized, neutral, pro-market auction the FCC should continue to be an Continue Reading »