Study into the use of Spectrum Pricing

For the Radiocommunications Agency

April 1996

Project Team:

NERA
Phillipa Marks
Ivan Viehoff
Usman Saadat

Smith
William Webb

National Economic Research Associates Economic Consultants

A Marsh & McLennan Company

Smith System Engineering Ltd

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TABLE OF CONTENTS

EXECUTIVE SUMMARY

1. INTRODUCTION

1.1. Background
1.2. Current Situation
1.3. Approach
1.4. Report Structure

2. POTENTIAL AREAS FOR USE OF SPECTRUM PRICING

2.1. Introduction
2.2. Approach
2.3. Areas where pricing is unlikely to have a role in foreseeable future
2.4. Areas where pricing could have a role to modify spectrum use in the long term
2.5. Areas where pricing could have a role to modify spectrum use in the near term
2.6. Summary

3. ADMINISTRATIVE PRICES

3.1. Introduction
3.2. Purpose
3.3. Approach
3.4. Factors Affecting Marginal Value of Spectrum
3.5. Implementation Issues
3.6. Application to the Case Studies
3.7. Setting Prices using Marginal Values

4. AUCTIONS

4.1. Introduction
4.2. The Purpose of Auctions
4.3. How Auctions Might Achieve Policy Aims
4.4. Other Issues in Auction Design
4.5. Strengths and Limitations of Auctions in the Context of Spectrum
4.6. International Experience of Spectrum Auctions
4.7. Recommendations for Spectrum Auctions in the UK

5. SPECTRUM TRADING

5.1. Introduction
5.2. Modes of Trade in Spectrum
5.3. Issues Affecting the Trade in Spectrum
5.4. Directions for Change
5.5. Concluding Comments

6. SUMMARY AND CONCLUSIONS

6.1. Administrative Pricing
6.2. Auctions
6.3. Secondary Trading
6.4. Implications

ABBREVIATIONS AND TERMS

APPENDIX 1 & 2 (1.9 MB)

APPENDIX 3 - FORMS OF AUCTION

APPENDIX 4 - NEW ZEALAND EXPERIENCE

April 1996