Economics Dictionary of ArgumentsHome
| |||
|
| |||
| Spectrum allocation: Spectrum allocation in economics refers to the assignment of radio frequency bands to various users, such as broadcasters, mobile networks, or government agencies. Efficient allocation maximizes social and economic value, often through auctions or licensing, to prevent interference and ensure optimal use of this limited resource. See also Collective goods, Social goods, Auctions._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
| Author | Concept | Summary/Quotes | Sources |
|---|---|---|---|
|
Ronald Coase on Spectrum Allocation - Dictionary of Arguments
Kiesling I 27 Spectrum Allocation/Coase/Kiesling: „Certainly, it is not clear why we should have to rely on the Federal Communications Commission rather than the ordinary pricing mechanism to decide whether a particular frequency should be used by the police, or for a radiotelephone, or for a taxi service, or for an oil company for geophysical exploration, or by a motion-picture company to keep in touch with its film stars or for a broadcasting station. Indeed, the multiplicity of these varied uses would suggest that the advantages to be derived from relying on the pricing mechanism would be especially great in this case.“ Coase (1959)(1), p. 16. Kiesling: An important policy application of Coase’s ideas on institutions, property rights, and transaction costs is the allocation of radio spectrum using spectrum license auctions. More specifically, Coase’s work has led to market-based allocation of radio spectrum rather than administrative allocation, and to the liberalization of the property rights that are conveyed in those licenses. This liberalization has enabled extensive innovation and market complexity. >Property rights/Coase, >Transation costs/Coase, >Law/Coase. Kiesling I 29 (…) Coase(1) asked if there was a feasible way to allocate the use of radio spectrum to create the most possible value out of it, which the then-current public interest hearings method did not accomplish. The policy objective should be not to minimize interference along the spectrum, but to maximize output from the spectrum, treating interference as a constraint to be managed (or something that innovation would reduce). Property right: Why not define a property right in a specific part of the spectrum for each user, and make those rights tradable? Coase here followed the suggestion of Leo Herzel (1951)(2), who proposed defining spectrum ownership rights and allocating them through auctions. Coase claimed that despite arguments to the contrary, the scarcity of spectrum does not necessitate its administrative allocation, ongoing regulation, or government ownership. >Property rights/Coase. Kiesling I 30 Coase identified the core of the spectrum allocation problem as ill-defined property rights, and drew analogies between spectrum and land: „We know from our ordinary experience that land can be allocated to land users without the need for government regulation by using the price mechanism.… If one person could use a piece of land for growing a crop, and then another person could come along and build a house on the land used for the crop, and then another could come along, tear down the house, and use the space as a parking lot, it would no doubt be accurate to describe the resulting situation as chaos. But it would be wrong to blame this on private enterprise and the competitive system. A private-enterprise system cannot function properly unless property rights are created in resources, and, when this is done, someone wishing to use a resource has to pay the owner to obtain it. Chaos disappears; and so does the government except that a legal system to define property rights and to arbitrate disputes is, of course, necessary.“ (1959(1): 14) Markets/Coase: Why use markets? Markets reveal the opportunity cost of the license and factor that opportunity cost into the decision-making of incumbent and entrant license holders. A right to use a frequency would have to be defined precisely in order to be transacted (Coase, 1959(1): 25). >Auctions/Coase. 1. Coase, Ronald H. (1959). The Federal Communications Commission. Journal of Law and Economics 2: 1-40. 2. Herzel, Leo (1951). “Public Interest” and the Market in Color Television Regulation. University of Chicago Law Review 18, 4: 802-816._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Coase, Ronald Kiesling I L. Lynne Kiesling The Essential Ronald Coase Vancouver: Fraser Institute. 2021 |
||
Authors A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Concepts A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
