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Universal service in Thailand. What policy is best?
Peter Cramton's response to a telecommunications journalist on February 12, 2025, outlines a market-based approach to achieving universal service in the global communications market. He critiques traditional methods, such as buildout obligations or administratively allocated subsidies, and advocates for competitive procurement auctions, a system proven effective in the U.S. under the FCC’s Rural Digital Opportunity Fund (RDOF).
Cramton’s approach involves three key steps: (1) defining standard mobile and fixed broadband services (e.g., $50/month for mobile service with 10 Mbps speed and 15GB data), (2) identifying noneconomic areas where market forces fail to provide these services, and (3) conducting annual descending clock auctions to select the least-cost providers for three-year contracts. This ensures efficient resource allocation, reduces subsidies, and improves consumer services. Providers must meet service standards or face penalties and disqualification from future auctions.
Cramton defends the proposed Thailand Independent Market Operator (TIMO) model as grounded in proven economic principles. He underscores the effectiveness of price mechanisms in guiding market behavior and critiques special interests that misrepresent policies to maintain inefficiencies. Supporting materials on auction design and open-access markets are available on his website.
Supporting material is available on my webpage cramton.umd.edu/communications
“A Study on Designing IMT Multiband Auction Formats for Thailand,” prepared for NBTC. [First Workshop YouTube, Slides, 17 December 2024]
“An Open-Access Market for Global Communications” (with Erik Bohlin, Simon Brandkamp, Jason Dark, Darrell Hoy, Albert S. Kyle, David Malec, Axel Ockenfels, and Chris Wilkens) Telecommunications Policy, 48, 2024, https://doi.org/10.1016/j.telpol.2024.102820.
[Presentation, Interactive Demo, Sample Code]
“An open-access obligation is the best way to enhance competition following consolidation in mobile communications,” University of Maryland Working Paper, 2025.
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By Peter CramtonPeter Cramton's response to a telecommunications journalist on February 12, 2025, outlines a market-based approach to achieving universal service in the global communications market. He critiques traditional methods, such as buildout obligations or administratively allocated subsidies, and advocates for competitive procurement auctions, a system proven effective in the U.S. under the FCC’s Rural Digital Opportunity Fund (RDOF).
Cramton’s approach involves three key steps: (1) defining standard mobile and fixed broadband services (e.g., $50/month for mobile service with 10 Mbps speed and 15GB data), (2) identifying noneconomic areas where market forces fail to provide these services, and (3) conducting annual descending clock auctions to select the least-cost providers for three-year contracts. This ensures efficient resource allocation, reduces subsidies, and improves consumer services. Providers must meet service standards or face penalties and disqualification from future auctions.
Cramton defends the proposed Thailand Independent Market Operator (TIMO) model as grounded in proven economic principles. He underscores the effectiveness of price mechanisms in guiding market behavior and critiques special interests that misrepresent policies to maintain inefficiencies. Supporting materials on auction design and open-access markets are available on his website.
Supporting material is available on my webpage cramton.umd.edu/communications
“A Study on Designing IMT Multiband Auction Formats for Thailand,” prepared for NBTC. [First Workshop YouTube, Slides, 17 December 2024]
“An Open-Access Market for Global Communications” (with Erik Bohlin, Simon Brandkamp, Jason Dark, Darrell Hoy, Albert S. Kyle, David Malec, Axel Ockenfels, and Chris Wilkens) Telecommunications Policy, 48, 2024, https://doi.org/10.1016/j.telpol.2024.102820.
[Presentation, Interactive Demo, Sample Code]
“An open-access obligation is the best way to enhance competition following consolidation in mobile communications,” University of Maryland Working Paper, 2025.