Allocation of Orbit and Spectrum Resources for Regional Communications: What's At Stake?

Contentious debate surrounds allocation of the geostationary orbit and electromagnetic spectrum, two resources used by communications satellites. An extensive economics literature alleges that the nonmarket administrative allocative procedures now in place are highly inefficient, but no research has empirically estimated the welfare loss. This article develops a conceptual framework and a computerized model to estimate the economic value of the resources, the size and distribution of welfare costs associated with the present regulatory regime, and the potential gains from more market-like allocation. Copyright 1998 by the University of Chicago.