Comparative Statics On The Allocation Of Spectrum

Allocation of spectrum is an important policy issue and decisions taken have ramifications for future growth of wireless communications and achieving universal connectivity. In this paper, on a common footing we compare the social welfare obtained from the allocation of new spectrum under different alternatives: to licensed providers in monopolistic, oligopolistic and perfectly competitive settings, and for unlicensed access. For this purpose we use mathematical models of competition in congestible resources. Initially we assume that any new bandwidth is available for free, but we also generalize our results to include investment decisions when prices are charged for bandwidth acquisition.