TPRC 2024: The 52nd Research Conference on Communications, Information and Inter

Link to paper

Abstract:
The Federal Communications Commission (“FCC”) and its counterparts globally keep a keen eye on spectrum concentration. This is because concentration in input markets is conjectured to have the effect of driving anticompetitive behavior in the relevant output markets. Spectrum is a necessity for the provision of mobile wireless services, and by accumulating spectrum holdings mobile carriers could wield their spectrum portfolios to obtain market advantages over competitors. For example, simply preventing spectrum to fall in the hands of your competitors increases deployment costs for them going forward, making them less competitive and in turn allowing the carrier that has accumulated the spectrum to compete less fiercely for customers. More spectrum, however, lowers your own production costs. In this paper, we develop theory describing the pro and anti-competitive incentives of spectrum accumulation and evaluate to what extent these theoretical findings can be empirically supported in the US market for mobile services. Generally, it should be expected that more concentrated markets exhibit lower product quality than less concentrated markets. To empirically test the theory, we will examine a combination of FCC Measuring Broadband America data and Universal Licensing System data to detect any econometrically significant relationships between mobile service quality and spectrum concentration.