Anti-competitive behaviour in spectrum markets: Analysis and response

Abstract

The introduction of spectrum trading creates opportunities for operators, singly or jointly, to foreclose entry into downstream markets by accumulating unneeded spectrum holdings. After considering how these issues are treated under administrative methods of spectrum management, the paper examines the degree of substitutability of frequencies with or without regulatory constraints, concluding that the latter are a major source of limitations on substitutability. This may create a case for intervention in the transition to a spectrum market. Alternative forms of intervention are considered, including caps on spectrum holdings or on the acquisition of spectrum at any award.