Trading Wireless Capacity Through Spectrum Virtualization Using LTE-A

Abstract

Markets for spectrum were first proposed by Ronald Coase [1] as a way to efficiently allocate this resource. It took another forty years for primary markets to be developed (in the form of spectrum auctions) as the mechanism for assigning spectrum licenses to users. It is not a secret that secondary markets would be necessary to fully realize the benefits of economic allocation of spectrum. But this is easier said than done, since spectrum is a complex, multi-dimensional product with relatively few buyers and sellers (at least for commercial mobile services), so liquid secondary markets have not emerged, even though spectrum trading through brokers is commonplace.In this paper, we find that liquidity for spectrum markets can be improved over "naked" spectrum markets [2, 3] when a standardized commodity can be traded that uses the principles of spectrum virtualization [4]. We utilize the Physical Resource Blocks (PRBs) of LTE-Advanced as the traded commodity and modify the SPEC-TRAD model developed in [5] accordingly. Though much remains to be done, we find that this is a promising approach to finally realizing liquid secondary markets in radio spectrum.

Improving Liquidity in Secondary Spectrum Markets: Virtualizing Spectrum for Fungibility

“…That is, we require a technical means to bypass some of the physical constraints of electromagnetic spectrum while maintaining its capabilities for service provision. In [35], we explore the opportunities that could be derived from wireless network and resource virtualization and further applied to our market scenario. Essentially, we analyze the possibility of developing a market in which the traded commodity is no longer "naked" spectrum, but instead, units of virtualized spectrum.…”

“…Through this type of virtualization, we could expect the rise of networks that can foster a greater number of spectrum users due to increased opportunities for using, sharing, accessing and assigning the existing resources [35]. In turn, operators could obtain the required capabilities for expanding or shrinking their networks, as needed and without incurring in prohibitive costs [39].…”

Wireless Network Virtualization: Opportunities for Spectrum Sharing in the 3.5GHz Band

“…With the adequate application of virtualization technologies, we would be able to devise improved alternatives for the use, sharing and assignment of existing resources [8]. This could provide a degree of flexibility that would aid in maximizing the spectrum access and management options on the operator side.…”