Theoretical works that explain the dynamics of the regulatory institutions and their decisions related to spectrum management are in abundance. However, quantitative scrutiny is scarce. We try to fill the gap through empirical research. This research empirically ascertains first, the impact of the institutional environment on the regulatory choices and second, the impact of these choices on the marketplace. The dataset used has information regarding 3G mobile telephony spectrum management decisions: spectrum auction, band mandate for 3G and having provisions for multiple technology standards for 3G. We perform separate estimations for each of the decisions.
A spectrum management scheme is a set of policies and procedures that enables national regulatory authorities to select which band of spectrum is to be assigned to which operator for what use. Among various regulatory decisions, the most crucial are: the choice of spectrum band, the decision regarding technology standards and the method of awarding licenses. In most cases, the regulators make available a new specific band of spectrum for the introduction of newer technology or to respond to spectrum need. This decision depends on various technical and policy oriented issues such as channel interference, competition, and social needs. Based on these criteria the regulators may award operators a new spectrum band or allow them to reuse their existing licensed spectrum for a new generation.
Our estimations find that in the telecommunications sector, it is not the over all political conditions but the construct of the regulatory structure-independence and scope that enables the regulators to take decisions in favor of paradigm technologies and interventions. We find that the decisions related to spectrum management, have positive impact on diffusion. However, the ‘one size fit all solution’ does not work well as in terms of consumer price and GDP growth, influence of these interventions affect the countries of different economic level and geo-political locations differently. We also find evidence that, whilst the institutions impact various regulatory decisions which in turn impact the diffusion of technologies, the variables of the institutions do not have direct influence on the diffusion process.