Economics of Spectrum Sharing, Valuation, and Secondary Markets

The emergence of robust markets for spectrum sharing will change the economics of wireless with both predictable and, as yet, uncertain implications for how spectrum is valued. This chapter explores how the emergence of secondary spectrum sharing markets will impact wireless industry economics and the valuation of spectrum resources. It focuses on understanding what the advances in information, computing and telecommunications technologies, leading us toward 5G, imply for the economics and future of spectrum management. The chapter reviews the basic economics of spectrum as a resource and explains how regulatory and technical trends have increased both the need and opportunities for sharing spectrum more intensively. It provides a review of the different ways in which spectrum may be valued in dollar terms, the challenges to using such estimates, and the factors that contribute to making some spectrum usage rights more valuable than others.