Paper Info
Title
The Cost of Free Spectrum
Abstract
AbstractThere has been growing interest in increasing the amount of radio spectrum available for unlicensed broadband wireless access. That includes “prime” spectrum at lower frequencies, which is also suitable for wide area coverage by licensed cellular providers. While additional unlicensed spectrum would allow for market expansion, it could influence competition among providers and increase congestion (interference) among consumers of wireless services. We study the value (social welfare and consumer surplus) obtained by adding unlicensed spectrum to an existing allocation of licensed spectrum among incumbent service providers. We assume a population of customers who choose a provider based on the minimum delivered price, given by the weighted sum of the price of the service and a congestion cost, which depends on the number of subscribers in a band. We consider models in which this weighting is uniform across the customer population and where the weighting is high or low, reflecting different sensitivities to latency. For the models considered, we find that the social welfare depends on the amount of additional unlicensed spectrum, and can actually decrease over a significant range of unlicensed bandwidths. Furthermore, with nonuniform weighting, introducing unlicensed spectrum can also reduce consumer welfare.
Year
DOI
Venue
2015
10.1287/opre.2016.1525
Periodicals
Keywords
Field
DocType
wireless service competition,network pricing,spectrum policy
Population,Weighting,Spectrum management,Telecommunications,Wireless broadband,Open spectrum,Service provider,Economic surplus,Radio spectrum,Mathematics
Journal
Volume
Issue
ISSN
64
6
0030-364X
Citations 
PageRank 
References 
2
0.39
12
Authors
5
Name
Order
Citations
PageRank
Thanh Nguyen134529.81
Hang Zhou2184.08
Randall A. Berry3106696.64
Michael L. Honig42971411.29
Rakesh V. Vohra561977.90