Allocation of licenses for the mobile broad band access by means of various market designs

The study is motivated by the Russian 4G spectrum license allocations in July 2012. A specific feature of the setting is that most radiofrequencies that were to be allocated previously were used by the federal government for other purposes, and therefore had to be converted from prior government use. The other objective stated by the Russian government was development of telecommunications infrastructure. The Russian government used an open contest non-market procedure to allocate four national licenses, and the winners were determined based on pre-announced criteria. This paper compares different alternative market designs that could be used in order to enhance efficiency of allocation of radiofrequencies and improve cash collection in favor of the federal budget. The main market instruments that investigated in the paper are the various versions of auctions. Administrative and market designs are compared with the use of methods of experimental economics.