Spectrum use and carrier costs: a critical trade-off

In making spectrum allocation and assignment decisions, national officials may wish to consider how these decisions will affect the costs experienced by licensees and the prices ultimately paid by customers. With low tier wireless systems as an illustration, this paper uses an engineering-economic model to describe the relationship between the amount of spectrum allocated and the per subscriber investment required of carriers/licensees. This relationship is explored under a variety of assumptions relating to service provision. The paper concludes with the public policy implications of the work and recommendations for policymakers and regulators involved with spectrum allocation. The analysis presented here seems particularly appropriate for extending service to unserved areas.