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"On Efficient Assignment of Radio-spectrum Resources," Osaka-Gakuin Review of Economics, vol.19, no.2, December 2005.

• [Abstract]
• [Keywords]
• [Full Text]
• [Miscellaneous]

[Abstract]

This paper considers a system by means of which the utilization of radio spectrum may be improved from the state of extreme inefficiency at the present time to a state of equilibrium and efficiency in the future. We propose a system called “modified lease auction (MLA).” In this system, the government is the sole owner of spectrum and leases (rents) it competitively to users, private or public. Thus, not only initial but also successive licenses for the use of spectrum are assigned by auction on the lease price. The system can accommodate various modes of spectrum use: exclusive, club, or commons mode. A serious disadvantage of MLA is that the incumbent spectrum user faces the risk of discontinuation (ROD); i.e., the user, at the time of license renewal, may not be able to continue to use the same spectrum that was used previously. The paper proposes ways to protect incumbent users from ROD to a justifiable extent.

The paper also considers the process of transition from the current system to MLA. The paper proposes a process in which the spectrum price be increased gradually from the current level near zero to the target equilibrium level. Further, in order to deal with possible oppositions to MLA by incumbents, a scheme is proposed for compensating income to incumbents without hurting the incentive to save spectrum.

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[Keywords]

radio, radio spectrum, radio frequencies, spectrum resources, shortage of spectrum, spectrum license, spectrum allocation, spectrum assignment, relocation of spectrum, auction, lease auction, spectrum usage fees

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[Full Text]

• [PDF: 136KB] [DOC: 171KB]

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[Miscellaneous]

• [PDF: ] (UC)

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