The Technical Basis for Spectrum Rights: Policies to Enhance Market Efficiency

Abstract

The inefficiencies inherent in the traditional command-and-control spectrum regulatory system are increasingly costly as demand for spectrum dependent services explodes. This paper describes a conceptual framework to articulate clear rights of access to spectrum in a way that fosters a market based allocation of the resource. We also offer simple rules that reasonably account for imperfect receivers and challenging physical properties of radio waves. The key features of the system we propose are:

• Regulators construct an initial partition of spectrum rights across the dimensions of space, time, frequency, and direction of propagation. Each partition is called a licensed electrospace right (LER). Regulators devolve these rights to LER owners.

• Licensees may buy, sell, aggregate, and subdivide their LERs at will.

• Licensees must keep all signals within their respective LER, including its frequency band, geographical area, angle of propagation range, and authorized time of operation. In particular, all signals must have a power level of less than a regulated limit (E0) outside the LER, with exceptions allowed with a probability no greater than an amount specified by regulators (such as one percent).

• Licensees must limit transmitter power or field strength within their LER to below a regulator-set level for the band in which they operate (Emax).

• Regulators or other parties must establish and maintain a detailed database and propagation model that facilitates transactions and enforcement. In this system, regulators set up the rights database and establish a few core parameters for each band.

Thereafter their role is limited to enforcing compliance with the simple set of rules on signal strength. Importantly, this system includes no protection of, or constraints on, receivers, so it does not directly control interference. Rather, through transactions and negotiations between LER owners, the system we outline here would induce an efficient level of interference in which the costs of controlling interference are balanced by the benefits.