Comparing welfare for spectrum property and spectrum commons governance regimes

The rapid growth of wireless communications has spurred a spirited debate over the advantages and disadvantages of alternative spectrum governance regimes. Of central concern are the merits of establishing full property rights in spectrum compared to organizing spectrum as an open commons. So far, this discussion has largely proceeded without a unifying framework within which claims and counterclaims can be assessed more systematically. The present study is a first step toward filling this gap. It introduces a theoretical framework and modeling approach that permits evaluation of the welfare consequences of choices regarding spectrum governance regimes and the related engineering properties of wireless devices. Using this approach, a simulation exercise with specific numerical values for demand and cost parameters was conducted, allowing a first comparative assessment of prototypes of spectrum governance regimes. Within the static modeling framework, the optimal spectrum policy regime depends on the quality of information available to governments. Commons regimes are more likely to outperform spectrum property regimes the less well informed are government agents.