Advantages of License-Exempt Spectrum : Allocation Versus Auctions for Upper 6Ghz Spectrum

This paper examines the relative advantages of allocating spectrum by auction or without licensing. The debate over how to allocate the spectrum will at times rest fundamentally on the challenges of choosing between alternative technologies. This paper notes that economic benefits of a highly distributed and non-excludable technology, like Wi-Fi, may be higher than for an excludable technology, like mobile data, but that the bidding capacities of each technology can easily sway towards an excludable technology due to a highly distributed technology’s inability to appropriate gains and thus to reflect its underlying social gains in bids. This argument is developed specifically with respect to the upper 6 GHz band of spectrum. The paper argues that reserving this band as unlicensed spectrum would plausibly deliver higher social surplus, higher economic value to government and reduced user costs compared to allocating the band via auction