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Tony lavender - Plum Consulting - incorporating social value into spectrum allocation decisions

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Incorporating Social Value into Spectrum Allocation Decisions
Presentation to UK Spectrum Policy Forum - Cluster 3: Economic and Social Value of Spectrum
29 March 2018
Tony Lavender

More information on the UK Spectrum Policy Forum can be found here: https://www.techuk.org/about/uk-spectrum-policy-forum

Published in: Technology
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Tony lavender - Plum Consulting - incorporating social value into spectrum allocation decisions

  1. 1. Incorporating Social Value into Spectrum Allocation Decisions plumconsulting.co.uk SPF Cluster 3 29 March 2018 Tony Lavender
  2. 2. Agenda 2 DCMS Expert Panel on Incorporating Social Value into Spectrum Allocation Decisions – report published November 2015 • Value of spectrum using services • Government approach to social value • Spectrum allocation/reallocation decisions • Relative merits of methods considered SPF Cluster 3 29/03/2018 | © Plum Consulting 2018
  3. 3. Value of spectrum using services SPF Cluster 3 29/03/2018 | © Plum Consulting 2018 3 • Distinction between categories not necessarily clear cut • Study considered exploring methods for incorporating broader social value into spectrum allocation decisions • Generally, reallocation of spectrum between spectrum using services • Key criterion for evaluation reallocation is the expected net impact on the total value of the relevant spectrum-using services (and transition costs) Private use value Private external value Broader social value Value
  4. 4. Reallocation cases 4 Constant output case Variable output case Decisions revolve around expected net impact on their combined supply costs More complex cases where the decision will affect the quality, quantity or availability of one or both of the services as well as their supply costs Assessing the impact of a change in spectrum use is more difficult, particularly where there are significant changes in private external value or broader social value that are not reflected in market prices SPF Cluster 3 29/03/2018 | © Plum Consulting 2018
  5. 5. Revealing value 5 • Revealed preference (RP) – using market mechanisms to elicit and estimate the private use value of spectrum • Techniques for assessing total value – there is no easy way to do this and three techniques were considered in the study • Stated preference (SP) – statistically reliable results that can be expressed in monetary terms but some aspects of value, especially social value, are not commensurable with private use value and not reducible to money • Deliberative research (DR) – disadvantages of qualitative methods (lack of scalability and reliability, and concerns about some aspects of validity) but can provide insight into how the public think about issues and tradeoffs • Subjective Wellbeing (SW) - like SP but not DR – offer statistically reliable results based on large samples but data needs to be available that reflects spectrum using services SPF Cluster 3 29/03/2018 | © Plum Consulting 2018
  6. 6. Government approach to social value 6 • Treasury Green Book • Appraisal and evaluation should take account of non-market impacts (private external value and broader social value) in CBA • Non-market impacts can include a variety of factors including time saving, health benefits, prevented fatalities, design quality, environment • Stated preference and other techniques can be used to provide an indication of how much people would be willing to pay or accept for a given benefit Assess whether impacts can be measured and prices determined by market data Use ‘Willingness to Pay’ Observing consumer behaviour Or a survey of “Willingness to pay or “Willingness to accept” Use of qualitative/ deliberative methods as a check on potential for market failures due to social value “Revealed Preference” “Stated Preference” Key problem: how to deal with the ‘broader social value’ – e.g. that provided by public service broadcasting? NO Determined by Source: Treasury SPF Cluster 3 29/03/2018 | © Plum Consulting 2018
  7. 7. Spectrum allocation/reallocation decisions 7 Less likely in practice – lack of examples? Fro example MOD sharing with other public sector users For example PSSRP spectrum – 2.3/3.4 GHz release For example 700 MHz change of use DTT to mobile Source Publicsector Commercial Recipient Public sector Commercial The key criterion for spectrum allocation decisions is the net impact on the aggregate total value of the services using the relevant spectrum. SPF Cluster 3 29/03/2018 | © Plum Consulting 2018
  8. 8. Relative merits of methods considered 8 RP SP SWB Deliberative Theory of value Preference satisfaction Preference satisfaction Mental state Flexible (Including rights based and rules based) Measurement approach Choice in actual market. e.g. demand estimation ,hedonic pricing Choice in hypothetical market. e.g. CV survey method Regression of Self-report wellbeing survey data with outcomes. Deliberative research elicit informed views e.g. deliberative workshops Most useful for measuring Captures private value to users of service. Does not capture private external value or BSV In principle can measure all aspects of total value In principle can measure all aspects of total value, but application to non-use values usually limited by data Insight into citizens’ views on policy choices esp. initial Identification of potential sources of BSV Key advantages Market-based approach rather than survey Well-established method that is highly flexible .Applicable to future changes No reliance on hypothetical survey and does not assume rationality Allows respondents to provide considered and well-informed view on complex issues Key problems Limited applicability, esp., to future changes due to lack of existing markets Does not capture non-use or social value Hypothetical, framing, focusing bias Preference instability Limited applicability to future changes Inability to identify impact of policy on SWB Questionable measure of money equivalent of a change in SWB Limited scalability. Subjectivity, ‘leading the witness’ SPF Cluster 3 29/03/2018 | © Plum Consulting 2018

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