Title: On the economic objectives of spectrum policy reforms

Authors: Benoit Pierre Freyens

Addresses: Economics, Faculty of Business, Government and Law, University of Canberra, Canberra ACT 6201, Australia

Abstract: Reforms to spectrum management seek to improve the efficiency with which the radio spectrum is allocated and used through higher reliance on market forces (market pricing, property rights, trading). These reforms have helped specific spectrum-intensive industries achieve higher allocative efficiency through improved spectrum valuation and investor certainty about long-term spectrum holdings. However, the high degree of resource exclusivity conferred by property rights potentially crowds out access by innovative services, affecting dynamic efficiency. Reforms may also undermine technical efficiency if the owner makes scant use of the privatised spectrum. The paper takes stock of action research performed in the regulatory agency of a reforming country to present the economic trade-offs involved, and argue for a more piecemeal approach to reforms based on a flexible licensing system.

Keywords: spectrum policy reforms; economic objectives; allocative efficiency; technical efficiency; dynamic efficiency; licensing; property rights; spectrum management; radio spectrum; market forces; market pricing; trading; spectrum valuation; investor certainty; innovative services; innovation; action research; regulatory agencies; economic trade-offs; flexible licensing.

DOI: 10.1504/IJMNE.2012.051891

International Journal of Management and Network Economics, 2012 Vol.2 No.4, pp.392 - 408

Available online: 01 Feb 2013

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