Techno-Economics of Licensed Shared Access with Mobile Network Operators Leasing Spectrum to PMSE Users
35 Pages Posted: 16 Mar 2018 Last revised: 16 Aug 2018
Date Written: March 15, 2018
Licensed shared access (LSA) has been adopted as a new paradigm by several different regulatory and industrial stakeholders. The European LSA two-tier approach opens the possibility to lease the spectrum more dynamically among network operators implementing different wireless technologies. The initial use cases considered mobile network operators (MNOs) leasing spectrum from other technologies. However, recent initiatives emphasized an important symmetric use case, where programme making and special events (PMSE) users could lease spectrum from MNOs short-term for concerts, conferences, etc. In this market, the MNOs should first have economic incentives to temporarily lease the spectrum that they do not fully use to PMSE users. The goal of this work is to address the relevance of economic aspects for spectrum sharing under LSA. Importantly, this is also of broader regulatory interest, since spectrum could be utilized more efficiently using LSA-like schemes only if this is techno-economically attractive in practice. To this end we present an extensive techno-economic study, analysing the interactions between the MNO and a number of PMSE users. For the MNO, the key challenge is to determine the pricing policy that maximizes its revenue for scenarios where users belong to two distinct quality-of-service (QoS) classes, suitable for different audio applications. Our contributions are as follows. From a technical perspective, we perform extensive simulations in ns-3 for several deployment scenarios, whereby we estimate the maximum number of supported PMSE users. We consider the effect of target QoS throughput, carrier frequency, base station (BS) transmit power, bandwidth, and propagation environment. From an economic perspective, we propose three QoS-aware pricing policies for the MNO that correspond to applications of second and third degree of price discrimination, compute the corresponding revenue, and compare them with the baseline policy of no price discrimination, as currently adopted by the UK regulator Ofcom. Our analysis highlights the importance of the purchasing power of the users, in particular the ones that belong to the low QoS class. Whenever all of them can afford a fixed price set by the regulator, similar to the one suggested by Ofcom, we expect that, in almost all technical configuration settings, the market will operate at a region where it is more profitable for the MNO to support only these low-QoS PMSE users. Therefore, there is no need for price discrimination. On the contrary, whenever the MNO needs to reduce the face value (i.e. the initial price) for some of them, QoS-aware pricing schemes can generate higher revenue. For these cases, price discrimination should be the de facto policy and scenarios with users with high QoS, as well as mixed QoS scenarios, can be supported. Our results show that there is a strong interplay between economic and technical conditions, which ought to be considered when designing regulatory measures for encouraging spectrum sharing in such markets.
Keywords: LSA, PMSE, MNO, techno-economic analysis
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