The Value of Sharing Intermittent Spectrum

We consider a model of Cournot competition with congestion motivated by recent initiatives in wireless spectrum policy to allow commercial use of spectrum assigned to government agencies. A key feature of such spectrum is that it may be intermittently available due to the incumbent government user’s activity. In our model, wireless Service Providers (SPs) compete for a common pool of customers using their own proprietary (exclusively licensed) bands of spectrum along with access to an additional intermittent band. When the intermittent band is unavailable, any traffic carried on that band must be shifted to the proprietary bands. Customers are sensitive to both the price they pay and the average congestion they experience across the bands of spectrum from which they receive service. We further consider two different access policies for this intermittent band: one in which it is shared by all SPs and one in which it is licensed to a single SP. We also allow the band to be divided into multiple sub-bands where each sub-band is either shared or licensed. We show that the choice of access policy and assignment of sub-bands to providers that maximize social welfare is subtle and may depend on factors such as the number of SPs in the market and the amount of proprietary bandwidth owned by each SP. Further, these decisions may be counter-intuitive. For example, in some cases, licensing the intermittent spectrum to the SP that values it the most leads to less welfare than assigning it to another SP.