Spectrum Licensing, Policy Instruments and Market Entry
Journal article, 2014

Competition policy attempts to address the potential for market failure by encouraging competition in service markets. Often, in wireless communication service markets, national regulatory authorities seek to encourage entry via the spectrum assignment process. Instruments used include the assignment mode (auction or beauty contest), setting aside licenses and providing bidding (price and quantity) credits for potential entrants, and making more licenses (spectrum blocks) available than there are incumbent firms (excess licenses). The empirical analysis assesses the effectiveness of these policy instruments on encouraging entry. The econometric results show that the probability of entry is enhanced by using auction assignments and excess licenses. Furthermore, quantity, but not price, concessions encourage entry.

Market entry

Spectrum licensing

TESTS

Policy instruments

AUCTIONS

SAMPLE SELECTION

DEPENDENT VARIABLE MODELS

Author

Gary Madden

Curtin University

Erik Bohlin

Chalmers, Technology Management and Economics, Technology and Society

T. Tran

Curtin University

A. Morey

University of Melbourne

Review of Industrial Organization

0889-938X (ISSN) 1573-7160 (eISSN)

Vol. 44 3 277-298

Subject Categories

Economics and Business

DOI

10.1007/s11151-013-9405-9

More information

Created

10/7/2017