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New Zealand Spectrum Policy: A Model for the United States?

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  • Crandall, Robert W

Abstract

In 1989, the New Zealand government began to auction "management rights" to the electromagnetic spectrum, using sealed-bid, second-price ("Vickrey") auctions. Subsequently, the United States began to auction spectrum through ascending-bid, multiple-round auctions. Although students of auction processes find the latter type of auction to be the more efficient form, I find that the prices realized in the New Zealand cellular auctions are very similar to those realized in the U.S. Personal Communications Services auctions after adjusting for differences in demographics. The flexibility of the New Zealand management rights should theoretically allow the winning bidders to find the highest-valued use for the spectrum, but many of the auctioned rights remain unused several years later. A country as small as New Zealand simply cannot be as innovative in finding new uses for the spectrum because of the large initial costs of developing the requisite equipment for using it. There is no single issue more important to the competitive rollout of services than microwave relocation. Copyright 1998 by the University of Chicago.

Suggested Citation

  • Crandall, Robert W, 1998. "New Zealand Spectrum Policy: A Model for the United States?," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 821-840, October.
    • Handle: RePEc:ucp:jlawec:v:41:y:1998:i:2:p:821-40
    DOI: 10.1086/467415
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    References listed on IDEAS

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    1. World Bank, 1997. "World Development Report 1997," World Bank Publications - Books, The World Bank Group, number 5980.
    2. John McMillan, 1994. "Selling Spectrum Rights," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 145-162, Summer.
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    Cited by:

    1. Joshua S. Gans & Stephen P. King & Julian Wright, 2005. "Wireless Communications," Monash Economics Working Papers archive-45, Monash University, Department of Economics.
    2. Thomas W. Hazlett & Roberto E. Muñoz, 2009. "A welfare analysis of spectrum allocation policies," RAND Journal of Economics, RAND Corporation, vol. 40(3), pages 424-454, September.
    3. Noam, Eli, 1998. "Spectrum Auctions: Yesterday's Heresy, Today's Orthodoxy, Tomorrow's Anachronism. Taking the Next Step to Open Spectrum Access," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 765-790, October.
    4. Howell, Bronwyn & Tang, Xin, 2023. "Using spectrum allocations to address indigenous rights claims: The case of New Zealand," Telecommunications Policy, Elsevier, vol. 47(10).
    5. Susan Athey & Philip A. Haile, 2002. "Identification of Standard Auction Models," Econometrica, Econometric Society, vol. 70(6), pages 2107-2140, November.
    6. Gary Madden & Hiroaki Suenaga, 2017. "The determinants of price in 3G spectrum auctions," Applied Economics, Taylor & Francis Journals, vol. 49(32), pages 3129-3140, July.
    7. Thomas W. Hazlett, 2008. "Property Rights and Wireless License Values," Journal of Law and Economics, University of Chicago Press, vol. 51(3), pages 563-598, August.

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