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Real-Time Secondary Markets for Spectrum

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journal contribution
posted on 01.05.2004 by Jon Peha, Sooskan Panichpapiboon

Spectrum licensing enables quality of service guarantees, but often leads to inefficient use of spectrum. Unlicensed spectrum promotes efficiency through sharing, but quality of service cannot be guaranteed, which is a serious problem for some applications. Such applications may be better served by a real-time secondary market, where secondary users ask the license-holder for temporary access to spectrum as needed. Access is granted when and only when quality of service requirements can be met for both license-holder and secondary users. This paper quantitatively assesses real-time secondary markets for the special case of a cellular license-holder. It demonstrates that many secondary users can access spectrum with little impact on the primary cellular customers, and that cellular carriers profit even if the price for secondary access is quite low. Finally, it addresses the challenges of transferring funds from secondary user to license-holder.