The determinants of prices in the FCC's 700 MHz spectrum auction
Journal article, 2014

This article examines the prices paid for 700MHz licenses in recent Federal Communications Commission auctions. Econometric modelling confirms the presence of economies of scale and scope in wireless spectrum valuations. That is, higher prices are recorded for areas with large populations, whilst lower prices are realized for geographically large areas. Also, smaller geographic license areas appear to meet bidders' demand more effectively, and licenses in areas with high incomes are sold at higher prices. Not surprisingly, more strict deployment requirements and the presence of harmful technical interference reduce prices. Also, paired spectrum receives higher prices than unpaired spectrum. Interestingly, high minimum opening bids and upfront deposits are associated with higher prices. Finally, competitive bidding places upward pressure on prices.

spectrum allocation



license price

FCC 700MHz auctions


Gary Madden

Curtin University

Erik Bohlin

Chalmers, Technology Management and Economics, Technology and Society

P. Kraipornsak

Chulalongkorn University

T. Tran

Curtin University

Applied Economics

0003-6846 (ISSN)

Vol. 46 17 1953-1960

Subject Categories

Economics and Business



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