The policy world is awash with worries about spectrum shortages as demand for wireless services grows. Using data on more than 69,000 licenses from every FCC spectrum auction since 1996, this paper disentangles and quantifies major factors that differently contribute to license value. I find that, all else equal, flexible use licenses are significantly more valuable than licenses that proscribe certain uses, policy uncertainty depresses license value, and Verizon and AT&T pay more than other carriers for licenses. I also find that larger geographic definitions generally correlate with lower license values and, contrary to conventional wisdom, more bandwidth is not correlated with higher values. Finally, using auction data and information from large secondary trades, I find that spectrum prices have been increasing since the mid-2000s, though some evidence suggests that the rate of increase has been slowing.
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Scott Wallsten is President and Senior Fellow at the Technology Policy Institute and also a senior fellow at the Georgetown Center for Business and Public Policy. He is an economist with expertise in industrial organization and public policy, and his research focuses on competition, regulation, telecommunications, the economics of digitization, and technology policy. He was the economics director for the FCC's National Broadband Plan and has been a lecturer in Stanford University’s public policy program, director of communications policy studies and senior fellow at the Progress & Freedom Foundation, a senior fellow at the AEI – Brookings Joint Center for Regulatory Studies and a resident scholar at the American Enterprise Institute, an economist at The World Bank, a scholar at the Stanford Institute for Economic Policy Research, and a staff economist at the U.S. President’s Council of Economic Advisers. He holds a PhD in economics from Stanford University.
