Unnecessary Regulations and the Value of Spectrum: An Economic Evaluation of Lease Term Limits for the Educational Broadband Service

Abstract

Licensed to nonprofit educational entities, the 2500-2690 MHz band of spectrum has been plagued by overly intrusive governmental policy since its inception over forty years ago. As a consequence, this spectrum is woefully underutilized. In 2004, the Federal Communications Commission recognized that private sector investment will help fulfill the educational mission of this spectrum and took several important steps to create a "secondary market" for leases of this spectrum. However, some organizations have now proposed that the Commission limit the length of those leases to 15 years. In this BULLETIN, we find that a lease term limitation may lead to reduced private sector investment in and inefficient use of this important band of spectrum.

Keywords: Spectrum Policy, Educational Broadband Service

JEL Classification: O33, O38, L96, L98, L99