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Spectrum trading


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Spectrum trading

  1. 1. Spectrum Trading <br />RajenAkalu<br />
  2. 2. Outline<br />Why trade spectrum?<br />Perspectives on ‘the market’<br />Spectrum trading UK<br />Lessons learned<br />
  3. 3. Growth in Telecommunications and use of Radio Spectrum <br />Extensive growth in commercial applications<br />-PCS<br />-3G<br />-MMS<br />-Mobile Satellite<br />GPS<br />Environment<br />-Earth exploration<br />-Imaging<br />Internet<br />-Wireless LANs<br />Broadband<br />Digital Broadcasting<br />Short range devices (RFIDs)<br />Growth in commercial usage<br />-Paging<br />-2 way radio<br />-Cellular<br />TV Colour<br />Experimental<br />Radio astronomy<br />Satellite Services<br />Aeronautical<br />Broadcasting<br />FM<br />Television B/W<br />Government<br />MilitaryNavigation<br />Commercial<br />Facsimile<br />Mobile<br />Radio<br />AM broadcast<br />Telex<br />Air to ground Microwave<br />Links<br />Telephone<br />Beacons<br />Weather reports<br />Time signals<br />Telegraph<br />Spark sets continuous wave sets<br />Transistor<br />Internet<br />Microprocessor<br />Vacuum Tube<br />1900<br />2000<br />
  4. 4. The Art of RF Management<br />
  5. 5. x<br />
  6. 6. Transactions<br />Rationing transactions: Allocation of use and Primary assignment of rights (Auctions, beauty contests, FCFS)<br />Bargaining transactions: Spectrum trading (secondary market)<br />Bargaining<br />Rationing<br />A<br />B<br />Managerial <br />
  7. 7. Market mechanisms<br />Auctions<br />Spectrum Trading<br />License transfers between undertakings<br />Administrative incentive pricing<br />
  8. 8. Two Perspectives on Markets<br />Market as objective<br />Aim of spectrum management: ‘Maximization of Output’ understood as economic efficiency<br />Market as tool/instrument<br />Aim: Depends on context – efficiency only one consideration<br />
  9. 9. Rationing transactions<br />Apportioning benefits and burdens among market participants<br />Arguments and pleadings (Consultation)<br />
  10. 10. Operational goals of Spectrum Management<br />NRA responsible for that which operators are unable to do acting individually:<br />Mitigation of interference<br />Stimulating spectrum users to adopt spectrum saving equipment when not in their economic interest to do so. <br />n.b. also excludes public interest goals<br />
  11. 11. Spectrum Trading (UK)<br />s. 168 Communications Act [transposes Art. 9(2) Framework Directive 2002]<br />Transfer Notice Registry <br />Fewer trades of licenses than expected<br />No distinction between trades and license transfers between undertakings<br />Price is not public<br />
  12. 12. Spectrum Trading (UK)<br />
  13. 13.
  14. 14. Transfer Notice Registry <br />
  15. 15. Business Radio trades by type<br />Trades<br />Business radio technologies<br />1. PMO for Public WAP<br />55.74 – 87.50 (10)<br />2. PMO public mobile data (non-voice) <br />136 – 208 MHz (119)<br />3. PMO for Public Access mobile 450 – 270 MHz (55)<br />
  16. 16. UK trade data<br />Most trades occurred for business radio <br />Trades more likely where the buyer/seller of spectrum are in the same service/industry<br />the likelihood of a trade occurring if the buyer and seller are in the same industry is 61.5%<br />
  17. 17. Why does business radio have the highest number of trades?<br />Compare traded bands with non-traded bands (e.g. satellite aeronautical bands)<br />High levels of interdependency, inter-operability and high entry costs)<br />Business radio equipment is exchangeable, low cost, well established (i.e. known interference patterns).<br />Regarded as a separate asset class of the firms core operation<br />Limits the scope for bargaining transactions to coordinate innovation as defined. <br />
  18. 18. Conclusion<br />Spectrum trading can work but under limited circumstances<br />Interdependency among users low<br />Mature technologies with a heterogeneous user base<br />Radio a separate asset class of firm’s core operations<br />