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May 01, 2013
Study Co-Authored by Brattle Principal Coleman Bazelon Examines Effects of Restricting Spectrum Purchases in FCC Incentive Auction

Brattle principal Coleman Bazelon has co-authored a recent study examining the Federal Communication Commission’s (FCC) upcoming incentive auction to reallocate spectrum from television broadcasting to wireless broadband services. Prepared by The Georgetown Center for Business and Public Policy, the study considers whether auction rules that could limit the bidding rights of the nation’s two largest wireless service providers would make for an efficient auction that enables spectrum to be put to its highest value and most productive use.

The FCC’s planned two-sided auction, to be conducted in 2014, is designed to reallocate as much as 120 MHz of radio spectrum from television broadcasters with 102 MHz likely available for wireless service providers. The auction is intended to address the shortage of spectrum for mobile broadband services, as well as generate revenue to fund a national First Responder Network (FirstNet) to provide communications for public safety personnel. The study examines the design and overall efficiency of the auction, which will consist of two distinct reverse and forward auctions, a first of its kind for the FCC.

Dr. Bazelon, along with Douglas Holtz-Eakin, co-authored Chapter 1 of the study, “Bidding Restrictions and the Incentive Auctions,” which focuses on the auction bidding process and how restrictions might affect auction revenues and spectrum transfers. Their analysis finds that the FCC’s rules that would restrict participation of the two largest wireless carriers – AT&T and Verizon – could undermine the overall goals of the incentive action. According to Drs. Bazelon and Holtz-Eakin, complete restriction of both carriers from bidding could lead to a reduction in auction revenues in the range of 40 percent, significantly reducing funding to FirstNet and lessening the amount of spectrum that would be reallocated to the mobile wireless sector.

To view the study in its entirety, please click here.