Recurring spectrum fees

This paper considers the impact of recurring spectrum fees. It concludes that fees in relation to mobile use do not promote the optimal use of spectrum since operators face their own use opportunity cost, irrespective of fees, in terms of the trade-off between meeting data demand growth through more intensive use of existing spectrum (including investing in mobile sites) and the purchase of additional spectrum in future. Further, given the ongoing reallocation of spectrum for mobile use, mobile use has higher value than alternative use at the margin. Mobile operators therefore face the opportunity cost of spectrum absent fees, whilst fees may harm investment.