NISLAB Seminar with Ingo Vogelsang

Two Topics in Telecommunications Policy: Spectrum Management and Net Neutrality By Ingo Vogelsang Department of Economics, Boston University Abstract: While most telecommunications regulations are on their way out, spectrum management and net neutrality are areas with ongoing policy initiatives that may continue for some time. The current paper is based on an economics literature survey and addresses the issues of licensed vs. unlicensed spectrum and spectrum auctions in auction management and the desirability of net neutrality regulation. Licensed vs. unlicensed spectrum is discussed in the context of property rights vs. commons. The “tragedy of the commons” need not materialize so that unlicensed spectrum will continue to be more efficient for certain spectrum bands and uses than licensed spectrum, while licensed spectrum (with expanded property rights) will hold comparative advantages for other spectrum bands and uses. Auctions are now the established way of first assigning spectrum to private parties. New auction developments could go further in reassigning spectrum on a long-term or spot basis. Net neutrality policy can be justified based on externality arguments that go beyond mere discrimination. The resulting regulations, however, should be light.