Spectrum Auctions and Competition in Telecommunications

by Gerhard Illing and Ulrich Klüh (Eds.)

• ISBN13: 9780262090377
• ISBN10: 0262090376
• Format: Hardcover
• Copyright: 2004-01-01
• Publisher: Mit Pr

Summary

In 2000 and 2001, several European countries carried out auctions for third generation technologies or universal mobile telephone services (UMTS) communication licenses. These "spectrum auctions" inaugurated yet another era in an industry that has already been transformed by a combination of staggering technological innovation and substantial regulatory change. Because of their spectacular but often puzzling outcomes, these spectrum auctions attracted enormous attention and invited new research on the interplay of auctions, industry dynamics, and regulation. This book collects essays on this topic by leading analysts of telecommunications and the European auction experience, all but one presented at a November 2001 CESifo conference; comments and responses are included as well, to preserve some of the controversy and atmosphere of give-and-take at the conference. The essays show the interconnectedness of two important and productive areas of modern economics, auction theory and industrial organization. Because spectrum auctions are embedded in a dynamic interaction of consumers, firms, legislation, and regulation, a multidimensional approach yields important insights. The first essays discuss strategies of stimulating new competition and the complex interplay of the political process, regulation, and competition. The later essays focus on specific spectrum auctions. Combining the empirical data these auctions provide with recent advances in microeconomic theory, they examine questions of auction design and efficiency and convincingly explain the enormous variation of revenues in different auctions.

Author Biography

Gerhard Illing is Professor and Ulrich Kluh is Assistant Lecturer in the Department of Economics at Ludwig Maximilian University, Munich

Table of Contents

Contributors	ix
Series Foreword	xi
1 Spectrum Auctions and Competition in Telecommunications: An Introduction	1	(16)
Gerhard Tiling and Ulrich Klüh
I Setting the Stage: (New) Competition, (New) Challenges, and Regulatory Innovation	17	(78)
2 Cross-Fertilization between U.S. and European Telecommunications Regulation	19	(22)
Ingo Vogelsang
3 "Cross-Fertilization between U.S. and European Telecommunications Regulation": A Comment	41	(4)
Ray Rees
4 New Competition in Telecommunications Markets: Regulatory Pricing Principles	45	(28)
Paul de Bijl and Martin Peitz
5 Remarks on de Bijl and Peitz's "New Competition in Telecommunications Markets: Regulatory Pricing Principles"	73	(4)
Ingo Vogelsang
6 The Interplay between Regulation and Competition: The Case of Universal Service Obligations	77	(20)
Steffen H. Hoernig and Tommaso M. Valletti
II European Spectrum Auctions: A British Success Story and Continental Failures?	95	(78)
7 How (Not) to Run Auctions: The European 3G Telecom Auctions	97	(22)
Paul Klemperer
8 Rationalizing the UMTS Spectrum Bids: The Case of the U.K. Auction	119	(40)
Tilman Börgers and Christian Dustmann
9 Efficiency of the British UMTS Auction: A Comment on Borgers and Dustmann	159	(4)
Klaus M. Schmidt
10 Some Observations on the British 3G Telecom Auction: Comments on Borgers and Dustmann	163	(8)
Paul Klemperer
11 The British UMTS Auction: A Response to Klemperer and Schmidt	171	(2)
Tilman Borgers and Christian Dustmann
III The Behavioral Approach to Auctions: Further Insights from Experimental Economics?	173	(28)
12 The Behavioral Approach to the Strategic Analysis of Spectrum Auctions: The Case of the German DCS-1800 Auction	175	(26)
Klaus Abbink, Bernd Irlenbusch, Bettina Rockenbach, Abdolkarim Sadrieh, and Reinhard Selten
IV The German Auction Design	201	(60)
13 The German UMTS Design: Insights from Multi-Object Auction Theory	203	(20)
Christian Ewerhart and Benny Moldovanu
14 The Third Generation (UMTS) Spectrum Auction in Germany	223	(24)
Veronika Grimm, Frank Riedel, and Elmar Wolfstetter
15 Some Observations on the German 3G Telecom Auction: Comments on Grimm, Riedel, and Wolfstetter	247	(14)
Paul Klemperer
V Closing the Circle: The Dutch Auction and the Interplay between the Political Process, Market Structure, and Strategic Behavior in Auctions	261	(38)
16 The Dutch UMTS Auction	263	(32)
Eric van Damme
17 Comments on "The Dutch UMTS Auction" by Eric van Damme	295	(4)
Christian Ewerhart
Index	299