Spectrum Concentration and Performance of the U.S. Wireless Industry

Autor: Glenn A. Woroch
Rok vydání: 2019
Předmět:
Zdroj: Review of Industrial Organization, vol 56, iss 1
Woroch, Glenn A. (2019). Spectrum Concentration and Performance of the U.S. Wireless Industry. Review of Industrial Organization. doi: 10.1007/s11151-019-09695-5. UC Berkeley: Retrieved from: http://www.escholarship.org/uc/item/8vv381jt
ISSN: 1573-7160
0889-938X
DOI: 10.1007/s11151-019-09695-5
Popis: © 2019, Springer Science+Business Media, LLC, part of Springer Nature. This paper estimates the empirical relationship between concentration in mobile carriers’ holdings of radio spectrum and the performance of the U.S. wireless industry. Reduced-form regressions that use a 2012–2013 cross-section of approximately 700 Cellular Market Areas reveal a robust inverted-U relationship between spectrum HHIs and subscriber penetration rates—a measure of consumer welfare. The marginal effect of spectrum concentration is positive throughout the range of sampled markets—contrary to the conventional concentration-performance hypothesis. This pattern persists when spectrum concentration is separately measured for bands below 1 GHz and for rural areas. It is also shown not to be biased by the potential endogeneity of spectrum HHIs. This paper is distinguished by relating subscriber penetration rates to the quality and coverage of operator networks that supports efficiency explanations for operator size, and hence the benefits of structural concentration. These findings cast doubt on federal policies adopted as early as the 1927 Radio Act that attempt to equalize ownership of spectrum. Instead, our empirical results recommend measures that promote investment in wireless infrastructure and other non-spectrum factors.
Databáze: OpenAIRE
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