Unlicensed spectrum should not be set for auction in spectrum...
Unlicensed spectrum should not be set for auction in spectrum reform legislation, the Wireless Innovation Alliance said Thursday. Companies who want spectrum for unlicensed use don’t have the scale to compete in an auction with carriers who seek licensed frequencies,…
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said Peter Cramton, economics professor at the University of Maryland, and an expert on auction theory. While it may seem counterintuitive, giving away some spectrum for unlicensed use may raise more revenue during the auctions of the remaining spectrum, Cramton said. When less spectrum is available in auctions, bidders pay more for it, he said. Also, unlicensed spectrum -- which powers Wi-Fi and Bluetooth technology -- increases the value of licensed spectrum, he said. Unlicensed spectrum is “conducive to innovation” because entry barriers are “very low,” said Assaf Eilat, a senior economist with Compass Lexecon. And the value of unlicensed spectrum to the economy is in the tens of billions of dollars per year, he said. The benefits to consumers outweigh what revenue is initially lost by the U.S. Treasury, he said. The Alliance released a paper Thursday by Eilat and two other economists on the benefits of unlicensed spectrum. It was commissioned by Google. The role of unlicensed spectrum has been an ongoing debate in the House Commerce Committee (CD Oct 20 p2).