A new study from the GSMA and Deloitte examined the impacts of sharing licensed spectrum and concluded that shared spectrum can complement exclusive spectrum licenses, but doesn’t replace the need for sole access to provide mobile broadband.
The report concluded that requiring the sharing of spectrum reduces the overall value of the spectrum in the economy — sometimes radically.
“Governments and regulators around the world are working to bring more spectrum to market for the mobile industry, but are grappling with how to identify enough viable spectrum that can be exclusively licensed in the time-frame to meet the anticipated demand offset by the burgeoning usage of mobile broadband,” said Craig Wigginton, who is vice chairman of Deloitte LLP and its U.S. telecom sector leader, in a statement. “While ongoing technology developments are opening new opportunities to viably share a common spectrum band, the restrictions and complexities inherent in sharing reduce the economic value of the spectrum compared to exclusive use, and indicate that shared spectrum may be better viewed as a complement to, rather than a replacement of, exclusively licensed spectrum.”
The study was based on a model assessing prospective value of two possible scenarios: the release of 100 MHz in the 3.5 GHz band in the U.S. from 2016, and of 50 MHz in the European Union in the 2.3 GHz band from 2020. In the U.S. scenario, Deloitte found that exclusive spectrum licensing would add $260 billion to the U.S. economy from 2016-2030; but if sharing terms were added, the value tumbled to anywhere from a mere $7 billion to $210 billion.
In the EU, Deloitte estimated that exclusive licenses would add $116 billion to the economy, while shared licenses would sharply reduce the value to between $6.7 billion and $95 billion, “due to a lack of common approach in spectrum allocation across the member states, combined with significant geographic and timing exclusions as well as potential contracting limitations.”
Spectrum sharing is being explored by the U.S. federal government, among others. A 2012 report from Rysavy Research said that the factors driving the interest in spectrum sharing include the need to get more spectrum into the hands of wireless broadband providers; technological advances that can support spectrum-sharing; and the awareness that licensed bands held by the U.S. government are often underutilized at certain times or certain places, but that complete reallocation of the spectrum is limited by the time and expense involved.
“What must be understood is that spectrum-sharing approaches range from simple to extremely complex, from readily achievable and in use today to extremely difficult with technologies yet to be developed,” noted Rysavy. “The ones being used today solve relatively simple problems, e.g., geographic sharing or sharing between two types of fixed systems. More complex problems, such as how a carrier class mobile technology could share with multiple government systems will take many years to develop, test, and implement in an economically rational manner.”
In the U.S., the H-block spectrum auction continues and has raised more than $1.2 billion in bids so far. Follow RCR’s spectrum coverage.
