Social and Behavioral Sciences Commons^™

Administrative Procedures, Bureaucracy, And Transparency: Why Does The Fcc Vote On Secret Texts?, Scott J. Wallsten

Scott J. Wallsten

The U.S. Federal Communications Commission (FCC) does not reveal the text of regulations on which it votes. Instead, after the vote the Commission grants the relevant bureau “editorial privileges” to continue drafting the order. It then releases the final version days, weeks, or even months after the vote. As a result, it is not possible to know if everything in the final rule was actually subject to a vote. In particular, it raises the question of whether the delay between vote and publication is truly for “editorial” changes or if more substantive changes occur after the vote.

In this paper, …

An Economic Analysis Of The Proposed Comcast-Time Warner Cable Merger, Scott J. Wallsten

Scott J. Wallsten

This paper examines the potential benefits and costs of the proposed merger between Comcast and Time Warner Cable that antitrust authorities must weigh in deciding whether to approve the deal.

Residential And Business Broadband Prices Part 1: An Empirical Analysis Of Metering And Other Price Determinants, Scott J. Wallsten, James Riso

Scott J. Wallsten

For this project, we assemble a new dataset consisting of more than 25,000 residential and business broadband plans from all OECD countries from 2007–2009. We explore three issues: the relationship between plan components—such as metering—and consumer prices, price changes over time, and how broadband prices vary across countries.

This paper, part 1 of the project, discusses pricing for broadband plans and, specifically, the relationship between plan components and pricing. We find that residential broadband plans with data caps—plans in which consumers pay a base price for a set amount of data—cost less than plans with unlimited data, other things being …

Unrepentent Policy Failure: Universal Service Subsidies In Voice And Broadband, Thomas Hazlett, Scott J. Wallsten

Scott J. Wallsten

In the first half of 2013, the Universal Service Fund levied a nearly 16 percent tax on users of fixed, mobile, and VoIP communications, spending nearly $9 billion to extend networks. Yet, USF expenditures – about $110 billion (in 2013 dollars) since 1998, of which $64 billion went for telephone carrier subsidies – extend voice services to, at most, one-half of one percent of U.S. households. This generous estimate of about 600,000 residences implies a cost-per-home of $106,000, just counting the federal carrier subsidies. Entrenched interests make the program exceedingly difficult to change. These interests include hundreds of rural telephone …

Two Cheers For The Fcc's Mobility Fund Reverse Auction, Scott J. Wallsten

Scott J. Wallsten

The United States held its first competitive bidding, or “reverse auction,” for universal service subsidies in September 2012. While it is far too early to investigate whether this national auction generated improvements in mobile voice and broadband service in underserved areas, it is not too soon to evaluate the auction itself. This paper investigates the outcome of the Mobility Fund Phase 1 Auction (Auction 901) and considers what we could learn from it for universal service and for future planned reverse auctions, such as the upcoming incentive auction, which aims to reallocate spectrum from broadcasters to those who place a …

Secondary Markets: The Quiet Economic Value Creator, John Mayo, Scott J. Wallsten

Scott J. Wallsten

No abstract provided.

What Gets Measured Gets Done: Stop Focusing On Irrelevant Broadband Metrics, Scott J. Wallsten

Scott J. Wallsten

Concerns regarding the state of U.S. broadband arises from a combination of focusing on the wrong metrics, a misguided interpretation of consumer preferences, and a popular obsession with rankings. These misperceptions translate into misdirected, if well-intentioned, public policies that waste scarce resources and distract from real issues like a large income-based digital divide.

How To Create A More Efficient Broadband Universal Service Program By Incorporating Demand And Cost-Effectiveness Analysis, Scott J. Wallsten

Scott J. Wallsten

The existing high-cost fund suffers from two inherent flaws: it does not incorporate how much consumers value the services being subsidized, and does not measure the incremental, rather than average, effects of the program. This paper proposes a way to incorporate those factors into the Connect America Fund—the proposed high-cost broadband support program—to enable it to operate more efficiently than the existing high-cost program ever could.

In particular, decisions about where to provide subsidies should be based on cost-effectiveness analyses that explicitly take into account not just the cost of providing service but also how much consumers would value the …

Margin Squeeze In Mexican Mobile Telecommunications, Víctor Pavón-Villamayor

Víctor Pavón-Villamayor

No abstract provided.

From National Monopoly To Multinational Corporation: How Regulation Shaped The Road Towards Telecommunications Internationalisation, Judith Clifton, Daniel Díaz-Fuentes, Francisco Comín

Judith Clifton

One of the consequences of major regulatory reform of the telecommunications sector from the end of the 1970s – particularly, privatisation, liberalisation and deregulation – was the establishment of a new business environment which permitted former national telecommunications monopolies to expand abroad. From the 1990s, a number of these firms, particularly those based in Europe, joined the rankings of the world's leading multinational corporations. Their internationalisation was uneven, however: while some firms internationalised strongly, others ventured abroad much slower. This article explores how the regulatory framework within which telecommunications incumbents evolved over the long-term shaped their subsequent, uneven, paths to …

Secondary Spectrum Markets As Complements To Incentive Auctions, Scott J. Wallsten, John W. Mayo

Scott J. Wallsten

No abstract provided.

The Universal Service Fund: What Do High-Cost Subsidies Subsidize?, Scott J. Wallsten

Scott J. Wallsten

The universal service program in the United States currently transfers about $7.5 billion per year from telephone subscribers to certain telephone companies. Those funds are intended to help achieve particular policy goals, such as subsidizing telephone service in rural areas and making phone service more affordable to low-income people. The bulk of the funds, about $4.5 billion per year, subsidizes firms operating in high-cost areas. A large literature documents the inefficiency and ineffectiveness of these subsidies, raising the question of where the money goes. This paper uses data submitted by about 1,400 recipients of high-cost subsidies from 1998 – 2008 …

Using Spectrum Auctions To Enhance Competition In Wireless Services, Peter Cramton, Evan Kwerel, Gregory Rosston, Andrzej Skrzypacz1

Peter Cramton

Spectrum auctions are used by governments to assign and price licenses for wireless communications. Effective auction design recognizes the importance of competition, not only in the auction, but in the downstream market for wireless communications. This paper examines several instruments regulators can use to enhance competition and thereby improve market outcomes.

Residential And Business Broadband Prices: Data Appendix, Scott J. Wallsten, James Riso

Scott J. Wallsten

No abstract provided.

Residential Broadband Competition In The United States, Scott J. Wallsten, Colleen Mallahan

Scott J. Wallsten

This paper uses a new FCC dataset on residential broadband subscribership and speeds at the census tract level combined with data from a number of additional sources to explore the state of broadband competition in the U.S. and test the effects of competition on speeds, penetration, and prices.

We find that the number of wireline providers in a census tract is positively correlated with the highest available broadband speeds, even when controlling for housing density, household income, state fixed effects, and endogenizing the number of providers. That is, we find that DSL, cable, and fiber speeds are each significantly higher …

Understanding International Comparisons: 2009 Update, Scott J. Wallsten

Scott J. Wallsten

No abstract provided.

Testimony On Reforming The Universal Service High Cost Fund, Scott J. Wallsten

Scott J. Wallsten

No abstract provided.

The Need For Better Analysis Of High Capacity Services, George S. Ford, Lawrence J. Spiwak

GEORGE S FORD

In 1999, the Federal Communications Commission (“FCC”) began to grant incumbent local exchange carriers (“LECs”) pricing flexibility on special access services in some Metropolitan Statistical Areas (“MSAs”) when specific evidence of competitive alternatives is present. The propriety of that deregulatory move by the FCC has been criticized by the purchasers of such services ever since. Proponents of special access price regulation rely on three central arguments to support a retreat to strict price regulation: (1) the market(s) for special access and similar services is unduly concentrated; (2) rates of return on special access services, computed using FCC ARMIS data, are …

Incentivize Me!—How Incumbent Carriers In The United States Attempt To Extract Greater Deregulation And Incentives In Exchange For Making Next Generation Network Investments, Rob M. Frieden

Rob Frieden

Incumbent carriers often vilify the regulatory process as a drain on efficiency and an unnecessary burden in light of robust marketplace competition. Some claim that regulation creates disincentives for investing in expensive next generation networks (“NGNs”), particularly if regulations mandate unbundling of services into composite parts, with burdensome interconnection and below market pricing of access by competitors. Both incumbents, prospective market entrants and recent market entrants may seek to tilt the competitive playing field to their advantage typically by securing a regulatory sanction that helps them reduce investment costs, delay having to make an investment, or secure a competitive advantage …

Auctioning The Digital Dividend, Peter Cramton

Peter Cramton

I begin by describing some of the problems of the simultaneous ascending auction. Then I present the package clock auction, which retains the benefits, while addressing the weaknesses, of the simultaneous ascending auction. I emphasize two essential elements of the package clock auction: the pricing rule and the activity rule. Along the way, I summarize both experimental and field results with the package clock auction.

The Dtv Coupon Program: A Boon To Retailers, Not Consumers, Scott J. Wallsten

Scott J. Wallsten

No abstract provided.

A Review Of The L-Band Auction, Peter Cramton

Peter Cramton

In May 2008, Ofcom’s L-band auction concluded. This was Ofcom’s second combinatorial clock auction. The auction used an innovative format intended to encourage an efficient assignment of the 17 lots. Eight bidders competed for the lots. In sharp contrast to the first combinatorial clock auction, the 10-40 GHz auction, in which each of the ten bidders won spectrum, in the L-band auction there was a single winner—Qualcomm won all the lots. This note briefly reviews the auction.

The Quadratic Core-Selecting Payment Rule For Combinatorial Auctions, Peter Cramton, Robert Day

Peter Cramton

We report on the use of a quadratic programming technique in recent and upcoming spectrum auctions in Europe, and proposed for use in the FAA’s landing-slot auctions in the United States. Specifically, we compute a unique point “in the core” that minimizes the sum of squared deviations from the Vickrey-Clarke-Groves payments. Analyzing the Karush-Kuhn-Tucker conditions, we demonstrate that the resulting payments can be decomposed into a series of economically meaningful and equitable penalties, adding to the perceived “fairness” of this payment rule. Further, we discuss the many benefits of this combinatorial auction paradigm.

A Review Of The 10-40 Ghz Auction, Peter Cramton

Peter Cramton

In February 2008, Ofcom’s 10-40 GHz auction concluded. This was Ofcom’s first combinatorial clock auction. The auction used an innovative format intended to encourage an efficient assignment of the 27 lots. Each of the ten bidders won one or more lots. All 27 lots were assigned. This note briefly reviews the auction.

Testimony For Fcc En Banc Hearing At Carnegie Mellon University On Broadband And The Digital Future, Scott J. Wallsten

Scott J. Wallsten

No abstract provided.

Understanding International Broadband Comparisons, Scott J. Wallsten

Scott J. Wallsten

No abstract provided.

The Economics Of Pacific Bell V. Linkline Communications, Scott J. Wallsten

Scott J. Wallsten

No abstract provided.

Innovation And Market Design, Peter Cramton

Peter Cramton

Market design plays an essential role in promoting innovation. I examine emission allowance auctions, airport slot auctions, spectrum auctions, and electricity markets, and demonstrate how the market design can encourage innovation. Improved pricing information is one source of innovation. Enhancing competition is another driver of innovation seen in all of the applications. Market design fosters innovation in other ways as well by addressing other potential market failures.

The Effect Of Incumbent Bidding In Set-Aside Auctions: An Analysis Of Prices In The Closed And Open Segments Of Fcc Auction 35, Peter Cramton, Allan T. Ingraham, Hal J. Singer

Peter Cramton

This paper examines the impact of an incumbent carrier’s participation in two simultaneously conducted auctions: one set-aside for non-incumbents and one open to all carriers. This paper estimates the extent to which prices in the closed auction were inflated by the participation of incumbents. This paper also estimates what prices would have been in the open auction had incumbents been excluded from bidding in the closed. It is found that an incumbent’s participation in the closed auction through a front, Alaska Native, enabled it to win more licenses at lower prices in FCC Auction 35. In contrast, non-incumbents won fewer …

An Overview Of Combinatorial Auctions, Peter Cramton, Yoav Shoham, Richard Steinberg

Peter Cramton

No abstract provided.