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1、Wireless Communications* by Joshua S. Gans, Stephen P. King and Julian Wright1. Introduction In 1895, Guglielmo Marconi opened the way for modern wireless communications by transmitting the three-dot Morse code for the letter S over a distance of three kilometers using electromagnetic waves. From th
2、is beginning, wireless communications has developed into a key element of modern society. From satellite transmission, radio and television broadcasting to the now ubiquitous mobile telephone, wireless communications has revolutionized the way societies function. This chapter surveys the economics l
3、iterature on wireless communications. Wireless communications and the economic goods and services that utilise it have some special characteristics that have motivated specialised studies. First, wireless communications relies on a scarce resource namely, radio spectrum the property rights for which
4、 were traditionally vested with the state. In order to foster the development of wireless communications (including telephony and broadcasting) those assets were privatised. Second, use of spectrum for wireless communications required the development of key complementary technologies; especially tho
5、se that allowed higher frequencies to be utilised more efficiently. Finally, because of its special nature, the efficient use of spectrum required the coordinated development of standards. Those standards in turn played a critical role in the diffusion of technologies that relied on spectrum use. In
6、 large part our chapter focuses on wireless telephony rather than broadcasting and other uses of spectrum (e.g., telemetry and biomedical services). Specifically, the economics literature on that industry has focused on factors driving the diffusion of wireless telecommunication technologies and on
7、the nature of network pricing regulation and competition in the industry. By focusing on the economic literature, this chapter complements other surveys in this Handbook. Hausman (2002) focuses on technological and policy developments in mobile telephony rather than economic research per se. Cramton
8、 (2002) provides a survey of the theory and practice of spectrum auctions used for privatisation. Armstrong (2002a) and Noam (2002) consider general issues regarding network interconnection and access pricing while Woroch (2002) investigates the potential for wireless technologies as a substitute fo
9、r local fixed line telephony. Finally, Liebowitz and Margolis (2002) provide a general survey of the economics literature on network effects. In contrast, we focus here solely on the economic literature on the mobile telephony industry. The outline for this chapter is as follows. The next section pr
10、ovides background information regarding the adoption of wireless communication technologies. Section 3 then considers the economic issues associated with mobile telephony including spectrum allocation and standards. Section 4 surveys recent economic studies of the diffusion of mobile telephony. Fina
11、lly, section 5 reviews issues of regulation and competition; in particular, the need for and principles behind access pricing for mobile phone networks. 2. Background Marconis pioneering work quickly led to variety of commercial and government (particularly military) developments and innovations. In
12、 the early 1900s, voice and then music was transmitted and modern radio was born. By 1920, commercial radio had been established with Detroit station WWJ and KDKA in Pittsburgh. Wireless telegraphy was first used by the British military in South Africa in 1900 during the Anglo-Boer war. The British
13、navy used equipment supplied by Marconi to communicate between ships in Delagoa Bay. Shipping was a major early client for wireless telegraphy and wireless was standard for shipping by the time the Titanic issued its radio distress calls in 1912.1Early on, it was quickly recognized that internationa
14、l coordination was required for wireless communication to be effective. This coordination involved two features. First, the potential for interference in radio transmissions meant that at least local coordination was needed to avoid the transmission of conflicting signals. Secondly, with spectrum to
15、 be used for international communications and areas such as maritime safety and navigation, coordination was necessary between countries to guarantee consistency in approach to these services. This drove government intervention to ensure the coordinated allocation of radio spectrum. 2.1 Spectrum All
16、ocation Radio transmission involves the use of part of the electromagnetic spectrum. Electromagnetic energy is transmitted in different frequencies and the properties of the energy depend on the frequency. For example, visible light has a frequency between 41014 and 7.51014 Hz.2 Ultra violet radiation, X-rays and gamma rays have higher frequencies (or equivalently a shorter wave length) while infrared radiation, microwaves and radio wave
