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Spectrum Management

Spectrum Economics

When a particular allocation of a spectrum resource maximises surplus (by way perhaps of super-normal profits in a network operator) we say that the allocation exhibits efficiency. Put slightly differently, the allocation maximises benefit to all members of society. Economists make the link between the two forms, indicating that in a market economy surplus and societal benefit are one in the same.

The prevailing view across the world is that it is generally efficient to make use of what are known as 'market mechanisms' to allocate spectrum. Market mechanisms, as the name implies, embraces the use of the markets or the use of a regulator who makes use of methods of allocation that would mimic competitive markets in making allocation decisions. The ideas of supply and demand and market competition are all excellent principles to model the various services that might make use of the spectrum. In turn, they give guidance on what should be done and enhance understanding of policy decisions.

Not all spectrum lends itself to market mechanisms. Sometimes there is a need to provide spectrum for common use, perhaps without interference protection or with equipment capacity to avoid other uses. When market mechanisms and spectrum commons are aggregated, there is spectrum for all users and  applications.

InterConnect Communications has undertaken consulting projects with deliverables that have included fee calculation for all spectrum products in many scenarios. In addition, it has used spectrum and market economics to develop policy to balance the amounts of spectrum made available under commons, cost recovery and opportunity cost-based fees.