Mobile Broadband Growth, Spectrum Scarcity, and Sustainable Competition

36 Pages Posted: 26 Jan 2012

See all articles by John Chapin

John Chapin

MIT RLE

William Lehr

Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL)

Date Written: September 25, 2011

Abstract

The explosive growth in mobile broadband traffic, driven by smart phones and tablets that significantly increase traffic per subscriber, has accentuated the spectrum shortage for Commercial Mobile Radio Services (CMRS). The spectrum shortage is driving up the costs of deploying competitive 4G mobile broadband networks and is fueling pressure for industry consolidation, and thus poses a threat to competition. The simple solution of allocating sufficient spectrum to maintain the current level of competition appears infeasible due to the high amount of spectrum required and competing political/economic claims on that spectrum. This paper considers how to sustain competition in mobile broadband services under conditions of spectrum scarcity. We observe that the key leverage available at the system architecture level is to reduce cell size. Smaller cells increase capacity in a given amount of available spectrum, enable use of higher frequencies where new allocations are easier to provide, and for technical reasons explained in the paper, enable increased spectrum sharing which is critical for higher efficiency. The primary barriers to reducing cell size are economic. We examine how to foster inter-provider infrastructure sharing for cost sharing while mitigating the risk of cartelization. A novel feature of our analysis is that we consider spectrum congestion and economic barriers to cell-size reduction as two aspects of a single challenge. We identify several complementary approaches that simultaneously address the technical, economic and policy issues associated with this challenge.

Suggested Citation

Chapin, John and Lehr, William, Mobile Broadband Growth, Spectrum Scarcity, and Sustainable Competition (September 25, 2011). TPRC 2011. Available at SSRN: https://ssrn.com/abstract=1992423

John Chapin (Contact Author)

MIT RLE ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

William Lehr

Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL) ( email )

Stata Center
Cambridge, MA 02142
United States

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