This video illustrates the "clock auction" described in
OSP's Working
Paper #43, "A Market-Based Approach to Establishing Licensing
Rules: Licensed Versus Unlicensed Use of Spectrum." The authors
(Bykowsky, Sharkey and Olson) 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.
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