Money Out of Thin Air: The Nationwide Narrowband PCS Auction
"Money Out of Thin Air: The Nationwide Narrowband PCS Auction," Journal of Economics and Management Strategy, 4, 267–343, 1995.
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The Federal Communications Commission held its first auction of radio spectrum at the Nationwide Narrowband PCS Auction in July 1994. The simultaneous multiple-round auction, which lasted five days, was an ascending bid auction in which all licenses were offered simultaneously. This paper describes the auction rules and how bidders prepared for the auction. The full history of bidding is presented. Several questions for auction theory are discussed. In the end, the government collected $617 million for ten licenses. The auction was viewed by all as a huge success—an excellent example of bringing economic theory to bear on practical problems of allocating scarce resources.