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Path and speed of spectrum management reform under uncertain costs and benefits

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2018
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Instituto Complutense de Estudios Internacionales (ICEI)
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The unsolved question in spectrum management is no longer if a reform is necessary to enable higher market participation but the optimal path and speed of reform. We offer an expression to determine when to choose a gradual or big bang reform depending on current and expected technology and an expression to determine whether to wait or not for new technology. Gradual is better if the technological advance coefficient is high, the reversibility of the reforms is costly, the duration of the second reform is long, the probability of an outcome lower than expected is considerable or the reforms are not too complementary.
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In some cases the establishment of ex-ante regulation such as the definition of spectrum caps might be required to achieve effective competition. Spectrum caps are limits to the maximum amount of spectrum that a firm is allowed to use to provide a service. In other occasions ex-post measures might be enough. A complementary explanation is that digital radio receivers are still expensive, and the use of analogue devices is highly extended. Examples of infrastructure involved in high sunk costs are the deployment of satellite networks or undersea cables. Profit generated on account of the allocated spectrum. A list of Federal Spectrum uses elaborated by NTIA (National Telecommunications and Information Administration) can be found at https://www.ntia.doc.gov/files/ntia/publications/spectrum_use_summary_master-07142014.pdf Roaming is the possibility to continue receiving a service when travelling abroad. Roaming can be enjoyed either because a frequency band is harmonized or because user´s terminal can operate in the different frequency bands used in each country. This includes reusing infrastructure like telecommunication towers, the electric feeding system, communication devices and also rights of way and site leasing. There are three types of interference: geographical, out of band and in the band itself. Licenses would establish the maximum interference from the adjacent channel and the maximum out of band interference (Cave and Webb, 2003). The same radio communication device can work as a transmitter and receiver. For example, a mobile terminal is able to transmit and receive. Unwanted energy can also be the result of a combination of emissions, e.g. intermodulation products, or inductions upon reception. For example the use of transmission power control techniques intended to increase mobile phones battery life increases the probability of harmful interference to other systems http://www.erodocdb.dk/docs/doc98/official/pdf/ECCRep138.pdf Transmission devices send part of the power emitted outside their transmission band. The amount of power sent out of band depends on the features of the transmitter´s output filter. Furthermore, due to the existence of intermodulation products, interferences can be produced on frequencies different to those emitted, due to the emission of a mixture of frequencies taking place in the transmitter. There also exists interference caused by the accumulation of out-of-band signals from multiple nearby transmitters. When the transmitter of a new service is located at the coverage edge of the existing services the probability of interference increases. Services with similar typical power tend to share the same or nearby sites thus, reducing the possibility of coverage holes. A receiver can be blocked in the presence of a nearby high power signal. Under such condition the receiver is unable to receive any signal. The existence of guard bands may be necessary even to expand the allocation of a service to adjacent bands. For example, the expansion of mobile broadband to adjacent frequency bands requires creating a guard band of unused spectrum. For example, freeing up the so called digital dividend frequencies required to simulcast new and old television channels during a period of time to let people adapt building reception facilities.