Channeling Diversity in the Public Spectrum

Over the last decade, the FCC has licensed the use of the public spectrum with an online auction system. Has this auction system, which requires potential licensees to first apply to qualify as bidders, increased the diversity of ownership, and, if not, why? Analyzing data on 28,354 applicants for 16,383 licenses, we find that while one in ten applicant businesses were minority-owned, only one in thirteen qualified bidders and fewer than one in fourteen bid winners were minority-owned. Controlling for other factors, minority-owned businesses and first-time applicants are much more likely to be interested in a media broadcast license than a license to operate other communications services on the public spectrum. Businesses that are minority-owned or woman-owned, or first-time applicants, are less likely than other types of businesses to successfully qualify to bid.