What's in the Air: Interlicense Synergies in the Federal Communications Commission's Broadband Personal Communication Service Spectrum Auctions

In this article, we analyze the extent of synergies among wireless licenses using information from the first two broadband Personal Communication Service (PCS) spectrum auctions by the Federal Communications Commission (FCC). We use a reduced‐form regression of the winning bid for each license on a...

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Bibliographic Details
Published in:The Journal of law & economics 1998-10, Vol.41 (S2), p.677-716
Main Authors: Moreton, Patrick S., Spiller, Pablo T.
Format: Article
Language:English
Subjects:
Auctions
Bidding
Bids
Cell phones
Commercial regulation
Communication
Corporate synergy
Correlations
Economic regulation
Economic theory
Economic value
Licenses
Licensing
Population growth rate
Regression analysis
Spectrum allocation
Studies
Telecommunications policy
Wholesale trade
Wireless networks
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Summary:In this article, we analyze the extent of synergies among wireless licenses using information from the first two broadband Personal Communication Service (PCS) spectrum auctions by the Federal Communications Commission (FCC). We use a reduced‐form regression of the winning bid for each license on a set of regressors capturing the demographics of the license region, its regulatory environment, the degree of competition for it, and the network synergies among that property and other wireless licenses, both cellular and PCS. In both auctions, the winning bid for a license was higher when the second‐to‐last bidder had a large national cellular telephone network or when the license was located adjacent to other PCS licenses won by either the winning or second‐to‐last bidder. We also find strong evidence that the state or states in which a license was located affected bidding, and there is some evidence that these effects are related to state‐level wireless regulation.
ISSN:0022-2186
1537-5285
DOI:10.1086/467408