Real-Time Secondary Markets for Spectrum

16 Pages Posted: 28 Mar 2016

See all articles by Jon M. Peha

Jon M. Peha

Carnegie Mellon University

Sooksan Panichpapiboon

King Mongkut’s University of Technology

Date Written: September 2003


Spectrum licensing is one effective way to guarantee adequate quality of service for license-holders, because they can have exclusive access to spectrum. However, exclusivity also leads to inefficient use of spectrum, which contributes to today’s shortage of spectrum. Unlicensed spectrum is a valuable way to increase sharing, and potentially achieve much greater spectral efficiency, but guaranteed quality of service is not available in unlicensed spectrum, which is a serious problem for some applications. This paper explores a regulatory alternative where license-holder and secondary spectrum users share spectrum, thereby increasing spectrum efficiency and alleviating spectrum scarcity, and where quality of service can be guaranteed. This is a real-time secondary market, where secondary users ask the license-holder for temporary access to spectrum as needed. The license-holder permits this sharing when and only when it determines that quality of service requirements can still be met for both license-holder and secondary users. In this paper, we quantitatively assess the costs and benefits of a real-time secondary market for the special case where the license-holder happens to be a GSM-based cellular carrier. We demonstrate that the license-holder can let many secondary users share spectrum with little impact on the capacity available to cellular customers. We further show that the cellular carrier profits from this arrangement even if the price for secondary access is quite low, making this an attractive scheme for both license-holder and secondary users. Finally, we address the challenges of transferring funds from secondary user to license-holder, and show that solutions to these challenges do exist.

Keywords: spectrum sharing, real-time spectrum market, cooperative sharing, secondary spectrum use, unlicensed

Suggested Citation

Peha, Jon M. and Panichpapiboon, Sooksan, Real-Time Secondary Markets for Spectrum (September 2003). Telecommunications Policy Research Conference (TPRC). Available at SSRN:

Jon M. Peha (Contact Author)

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

Sooksan Panichpapiboon

King Mongkut’s University of Technology ( email )


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