Assigning Spectrum Fairly : Managing Spectrum Using Long-Term Nationwide and Short-Term Local Spectrum Licenses

A new method is proposed to divide upcoming spectrum band allocations into two different spectrum license/management right types. The first, a spectrum license, would allow successful auction bidders to rollout mobile radio networks on a long-term nationwide scale as normal. The second is a new concept called a licensed spectrum park (LSP) and would allow smaller operators to rollout specialized mobile radio networks on a short-term local site by site basis. LSPs would be assigned by applying for a license based on a site specific, fixed base station location for a small timeframe that could be renewed periodically. Traditionally spectrum for mobile radio use has been auctioned to operators in discrete blocks as a management right over large geographical areas and for long timeframes. These auctions have made it expensive for new entrants to enter the mobile radio market, and some operators look to spectrum sharing as an option to efficiently use this resource and share the costs. There are many different models describing the methods to share spectrum. These include: increasing the spectrum allocated for unlicensed bands; combining spectrum from licensed band operators; cognitive radio use; and geographical databases used to track areas where spectrum is unused. In this paper we propose an LSP model, assigned by regulators, as a novel and improved method to assign adjacent sub-band spectrum for mobile radio use for specialised networks. It has been noted that the key purpose of spectrum management is to maximise the value that society gains from the radio spectrum by allowing as many efficient users as possible while ensuring that the interference between different users remains manageable. The creation of LSPs means there is a net social benefit for two reasons. The first is that the use of LSPs allows specialist networks to be formed, effectively opening up the spectrum to more users and to potentially create more competition in the mobile radio market. The second is the fact that an LSP is licensed which creates a method to control interference between different users and allows interference to be managed. The administration of LSP use could be managed by existing radio spectrum management. A regulator faces the issue of whether to allocate a fixed amount of spectrum for LSP use before auctioning the remaining spectrum, or alternatively auctioning the total spectrum and allocating any unsold spectrum to LSPs, if any is available. Non-cooperative game models are used to first analyse an operator’s strategy in response to the regulator’s announcement of allocating a pre-auction fixed amount of spectrum for LSP use. A second model is similarly used to analyse strategy when the total amount of available spectrum is up for auction, and any unsold spectrum is assigned for LSP use. An efficiency analysis follows in which the efficiency of equilibria from both models are compared. Finally, to demonstrate how this theory would work in practice, we discuss several illustrative examples and discuss how LSP licences may be priced. In particular our analysis considers the population covered by the proposed base station, the amount of spectrum requested and length of the management right, against the normalised cost of the spectrum, for a given population and bandwidth, under the spectrum license auctions. The resulting equation means that LSP licences in urban environments with high spectrum requirements and populations, for example, would be more expensive as compared smaller amounts of spectrum in rural environments. Our analysis offers an important contribution for both spectrum regulators and private spectrum managers, and provides the framework for spectrum allocation to new market entrants enabling more competition in the mobile radio market