video (by Chuck Needy, OSP) illustrates the "clock auction" proposed
in OSP's Working
Paper #43, "A Market-Based Approach to Establishing
Licensing Rules: Licensed Versus Unlicensed Use of Spectrum." The
authors -- Mark Bykowsky and William Sharkey (OSP) and Mark
Olson (with FCC under contract) -- address the
issue of how to identify the most desirable set of licensing
rules for spectrum. They focus on the FCC rules applied to
licensed use and unlicensed operations.
Under its current procedure, the FCC typically uses an auction
to assign spectrum licenses to competing bidders. This market-based
approach is quite effective at revealing the value bidders place
on the use to which the spectrum can be employed.
When apportioning spectrum between licensed and unlicensed use,
however, the FCC employs an administrative process. The problem
with this approach, the authors argue, is that interested parties
have an incentive to exaggerate the value they place on having
spectrum designated to either licensed or unlicensed use.
To address this problem, the authors propose that the FCC
base this spectrum designation procedure on a market-based
approach that would induce those parties to more accurately
reveal the true values of the various alternative uses of
spectrum. Specifically, the authors examine the merits of
using a clock auction to determine the efficient designation
of spectrum between licensed and unlicensed use.
reviewed/updated on 8/21/09