Economics and computer science of a radio spectrum reallocation

Abstract

The recent “incentive auction” of the US Federal Communications Commission was the first auction to reallocate radio frequencies between two different kinds of uses: from broadcast television to wireless Internet access. The design challenge was not just to choose market rules to govern a fixed set of potential trades but also, to determine the broadcasters’ property rights, the goods to be exchanged, the quantities to be traded, the computational procedures, and even some of the performance objectives. An essential and unusual challenge was to make the auction simple enough for human participants while still ensuring that the computations would be tractable and capable of delivering nearly efficient outcomes.