Sea of Noise

Thu, 03 Jun 2004

The Economics of Connectivity

Kevin Werbach writes at WirelessUnleashed about the economics of spectrum allocation:

Governments engaging in spectrum allocation like to calculate the economic returns of their actions. Auctioning licenses to the highest bidder generates an immediate financial windfall for the government, and sets the "value" of the spectrum concretely. But what's the value of spectrum dedicated to unlicensed uses? No one pays for a license, and most of the money spent to use the capacity is divided among large numbers of end-users. The value of the market increases over time as usage expands, but there is no single revenue number (like TV ad spending) to point to.

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