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Allocative vs. technical spectrum efficiency

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  • Freyens, Benoît Pierre
  • Yerokhin, Oleg

Abstract

Achieving allocative and technically efficient spectrum management is a key aspect of deregulatory reforms in several OECD countries. However, reform legislation offers few clues as to how these objectives should rank when they conflict with one another. An 'innocent' prior acquisition of service-neutral spectrum at an efficiently run auction may prove allocative efficient but fail to be technically efficient if the spectrum is left fallow in the short term. Accountability for the productive usage of a public resource and pressures from short-term political cycles may induce regulators to mandate some minimal level of activity. Two plausible regulatory responses are considered: use it or lose it clauses and spectrum trading incentives. The former favours technical efficiency whilst the latter promotes allocative efficiency. The argument is formalised in a simple economic model buttressing the roles of uncertainty and transaction costs to assert the primacy of allocative efficiency over technical efficiency.

Suggested Citation

  • Freyens, Benoît Pierre & Yerokhin, Oleg, 2011. "Allocative vs. technical spectrum efficiency," Telecommunications Policy, Elsevier, vol. 35(4), pages 291-300, May.
    • Handle: RePEc:eee:telpol:v:35:y:2011:i:4:p:291-300
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    Citations

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    Cited by:

    1. Kwon, Youngsun & Park, Duk Kyu & Rhee, Hongjai, 2017. "Spectrum fragmentation: Causes, measures and applications," Telecommunications Policy, Elsevier, vol. 41(5), pages 447-459.
    2. Massaro, Maria & Pogorel, Gérard, 2015. "Next generation of radio spectrum management licensed shared access and the trade-off between static and dynamic efficiency," 2015 Regional ITS Conference, Los Angeles 2015 146322, International Telecommunications Society (ITS).
    3. Jain, Rekha, 2019. "Lessons from India on the Role of Institutions in Spectrum Trading," 2nd Europe – Middle East – North African Regional ITS Conference, Aswan 2019: Leveraging Technologies For Growth 201758, International Telecommunications Society (ITS).
    4. Basaure, Arturo & Marianov, Vladimir & Paredes, Ricardo, 2015. "Implications of dynamic spectrum management for regulation," Telecommunications Policy, Elsevier, vol. 39(7), pages 563-579.
    5. Minervini, Leo Fulvio, 2014. "Spectrum management reform: Rethinking practices," Telecommunications Policy, Elsevier, vol. 38(2), pages 136-146.
    6. Lee, Hyeongjik & Seol, Seong-ho & Kweon, Soo Cheon, 2012. "An event study of the first telecommunications spectrum auction in Korea and "the winner's curse"," 23rd European Regional ITS Conference, Vienna 2012 60394, International Telecommunications Society (ITS).
    7. Freyens, Benoît Pierre & Loney, Mark & Dissanayake, Tharaka, 2014. "Dynamic usage of narrowband spectrum," Telecommunications Policy, Elsevier, vol. 38(2), pages 173-185.
    8. Massaro, Maria & Pogorel, Gérard & Bohlin, Erik, 2015. "Next Generation of Radio Spectrum Management: Licensed Shared Access and the trade-off between Static and Dynamic Efficiency," 26th European Regional ITS Conference, Madrid 2015 127164, International Telecommunications Society (ITS).
    9. Arturo Basaure & Varadharajan Sridhar & Heikki Hämmäinen, 2016. "Adoption of dynamic spectrum access technologies: a system dynamics approach," Telecommunication Systems: Modelling, Analysis, Design and Management, Springer, vol. 63(2), pages 169-190, October.

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