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April 11, 2011
Analysis by Brattle Principal Coleman Bazelon Demonstrates that Pairing AWS-3 with the 1755 MHz Band Would Result in $12 Billion in Revenues

A report authored by Brattle principal Coleman Bazelon and sponsored by T-Mobile and CTIA compares the values of pairing the Advanced Wireless Services (AWS) 2155-2175 MHz spectrum band (AWS-3) with the 1690-1710 MHz or 1755-1780 MHz bands. The analysis shows that pairing AWS-3 with the 1755 MHz band would result in about $12 billion in auction revenues, assuming a well designed auction, which is significantly more than what would be generated if the AWS-3 were paired with spectrum around 1690 MHz. The paper discusses the economic underpinnings of spectrum value and identifies specific cost differences between the 1755 MHz and 1690 MHz bands as well as their effect on spectrum value. The additional costs of deploying the 1690 MHz band, including higher device costs, additional capital expenditures, and increased uncertainty, would be likely to decrease the spectrum value by approximately $4.7 billion, to $7.3 billion in expected auction receipts, the report says. In addition, an asymmetric pairing with the 1690 MHz band, will result in an additional A report authored by Brattle principal Coleman Bazelon and sponsored by T-Mobile and CTIA compares the values of pairing the Advanced Wireless Services (AWS) 2155-2175 MHz spectrum band (AWS-3) with the 1690-1710 MHz or 1755-1780 MHz bands. The analysis shows that pairing AWS-3 with the 1755 MHz band would result in about $12 billion in auction revenues, assuming a well designed auction, which is significantly more than what would be generated if the AWS-3 were paired with spectrum around 1690 MHz. The paper discusses the economic underpinnings of spectrum value and identifies specific cost differences between the 1755 MHz and 1690 MHz bands as well as their effect on spectrum value. The additional costs of deploying the 1690 MHz band, including higher device costs, additional capital expenditures, and increased uncertainty, would be likely to decrease the spectrum value by approximately $4.7 billion, to $7.3 billion in expected auction receipts, the report says. In addition, an asymmetric pairing with the 1690 MHz band, will result in an additional $0.9 billion revenue reduction. However, while the added costs of the 1690 MHz band pairing would lead to a substantial loss in value, either pairing is preferred to leaving the AWS-3 unpaired, which is likely to receive $3.6 billion in auction receipts. The results of this analysis were presented in a filing with the Federal Communications Commission and have been cited in media outlets, including Communications Daily and TR Daily. The paper, “The Economic Basis of Spectrum Value: Pairing AWS-3 with the 1755 MHz Band is More Valuable than Pairing it with Frequencies from the 1690 MHz Band,” is available for download by following the link below..9 billion revenue reduction. However, while the added costs of the 1690 MHz band pairing would lead to a substantial loss in value, either pairing is preferred to leaving the AWS-3 unpaired, which is likely to receive $3.6 billion in auction receipts. The results of this analysis were presented in a filing with the Federal Communications Commission and have been cited in media outlets, including Communications Daily and TR Daily. The paper, “The Economic Basis of Spectrum Value: Pairing AWS-3 with the 1755 MHz Band is More Valuable than Pairing it with Frequencies from the 1690 MHz Band,” is available for download by following the link below.