● The Federal Communication Commission (FCC) plans to shift airwaves from TV broadcast to wireless use to respond to shifts in airwave demand.
● In 2016, the FCC held a two-phase auction. In the first phase, TV broadcasters determined the lowest acceptable selling price. In the second phase, wireless data companies determined the highest acceptable purchase price. Taxpayers kept the difference which can be used to cover the cost of license reassignment.
● However, simulations show that the FCC’s auction rules don’t maximize taxpayer value. When one company owns multiple TV broadcast licenses, it’s possible for that company to increase the selling price by limiting the supply of licenses available on the auction. Therefore, companies with multiple licenses can shift wealth from taxpayers to themselves.