An Empirical Study on the Spectrum License Fee and Consumer Surplus

초록

The future broadcasting and telecommunications environment will require a wider frequency spectrum. The proper use of limited frequency resources will influence not only the development of related industries but also consumer surplus. This study is aimed at empirically analyzing the relationship between spectrum license fees and related service prices. The results of this study may be summarized as follows. First, the relationship between the spectrum license fee and pricing of telecommunications services is statistically significant: when the spectrum license fee increases by 1%, the price of telecommunication services may rise by 0.13 to 0.18%. Second, the number of service providers in the market may be a more important variable than market concentration, which reflects the way market competition affects the pricing of telecommunications services. Lastly, when looking at the development of the future telecommunications and broadcasting environment, and the trend of frequency utilization, the spectrum license fee might become an important issue, mainly as a means of achieving the policy goal of increasing the consumer surplus by lowering telecommunications service prices. Based on the results of this study, we might add the frequency management policy to the core of the market competition policy as a means of determining telecommunications service pricing. That is, the mixing of a wider range of policy-means will work toward inducing telecommunications service pricing.

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