Economics at the Federal Communications Commission

Abstract

Abstract. This article reviews several issues confronted by the Federal Communications Commission (FCC) over the past year and discusses some of the economic analysis employed by the FCC in examining these issues. The article also identifies areas in which future academic research would be valuable to the agency.

Economics at the FCC: 2007–2008

“…6 With anonymous bidding, the FCC announced only the amount of each bid during the auction, without identifying the associated bidders. 7 As discussed in Marx (2006), a considerable body of theoretical economic research supports the view that anonymous bidding inhibits either tacit or explicit collusion among bidders and/or retaliatory bidding to punish a bidder who violates an agreement (Brusco and Lopomo 2002;Marshall and Marx 2007). 8 On the other hand, knowledge of bidder identities may promote economic efficiency -for example, by providing information about the technologies that others are likely to deploy on the band.…”

“…2 Froeb et al (2008) discuss the tradeoffs between a functional and divisional organization for economists within policy organizations. 3 Much of this background section borrows extensively from Marx (2006) and Connolly and Kwerel's (2007). public. The FCC has tried to implement this goal by designing auctions that specify and assign licenses quickly and efficiently, are robust to strategic behavior by bidders, raise significant revenue, and are perceived to be fair, transparent, and objective.…”

“…In the two previous survey articles on "Economics at the FCC", Marx (2006) and Connolly and Kwerel's (2007) highlighted several issues of interest to economists in the area of auction design, including auctions with endogenous license characteristics, anonymous bidding, and package bidding. The latter two were implemented in the recently concluded 700 MHz auction.…”

“…Irrespective of these changes in market developments, cable prices continue to rise. Marx (2006), in her survey of the industry two years ago, described the patterns in industry prices reported in the Commission's annual Cable Price Reports. Figure 3, from Marx (2006), documents the increase in prices for a variety of communications services between 1995 and 2005.…”

“…Marx (2006), in her survey of the industry two years ago, described the patterns in industry prices reported in the Commission's annual Cable Price Reports. Figure 3, from Marx (2006), documents the increase in prices for a variety of communications services between 1995 and 2005. It reports the average price of overall, long-distance, international, and wireless telephone services, the average price of Expanded Basic cable services, and (for comparison purposes) the U.S. Consumer Price Index (CPI).…”