Government policy and the comparative merits of alternative governance regimes for wireless services

This paper investigates the effects of policy instruments (entry restrictions, power limits and device robustness requirements) on welfare for two types of wireless networks (with and without backbone relay) through economic modeling. The study finds that (1) robustness requirements are undesirable; (2) the potential welfare improvement associated with power limits increases with the number of firms in the market; (3) when set inadequately, all three policy instruments can cause significant welfare loss; (4) comparison of a prototype property rights regime and a prototype commons regime suggests, given the same power restrictions, the property rights regime tends to outperform the commons regime as long as the number of firms is not significantly smaller (in relative terms) than the optimal number of firms, which itself is a small fraction of the open commons equilibrium number of firms