Design of a Secondary Market for Fractional Spectrum Sub-leasing in Three-Tier Spectrum Sharing

Abstract

The growing shortage in available wireless spectrum has resulted in opening of new frequency bands by the FCC. Some bands that have previously been underutilized are now opened for public usage under the 3-tier spectrum sharing framework. Spectrum access is regulated by a Spectrum Access System (SAS). The three user tiers are incumbent users - military, federal and satellite operators, Priority Access License (PAL) holders - operators which have purchased a license for exclusive access to the spectrum when not used by incumbents, and General Authorized Access (GAA) users who may only use it opportunistically. The SAS coordinates access to the spectrum, and can grant access to lower tier users when it is not being utilized by any users in higher tiers. Because spectrum licenses are granted for large geographic regions - counties, in ten year increments, service providers are highly motivated to obtain PALs as soon as possible to avoid being locked out of a market. This may lead to a sub-optimal utilization of the spectrum by the PAL holder in cases where licenses are obtained before the network is deployed in the entire county. The unused portions of the area represent a loss to the PAL holder, as they will end up being used by the third tier users without any compensation to the license holder. The second tier operator can choose to sub-lease the license in these areas. This paper proposes a market model for sub-leasing with short-term license allocation in smaller areas. The model assumes that interested parties periodically make bids for sub-leased licenses in the small area defined by the bid. The sub-leased licenses are allocated by the SAS in a way that maximizes the financial gain to the PAL holder. This paper shows a basic sub-lease allocation model and two improved hypergraph based models. The improved models result in the financial gain increase between 15 and 35% over the base model, depending on the geographical distribution of the sub-lease bid regions.