The hinges of destiny: A decision analysis of spectrum users´ choices

Dynamic spectrum access (DSA) has been a technological approach that has received considerable research attention over the past decade. At the same time, the relative paucity of deployed systems using some of these technologies speaks to either a mismatch between research priorities and practical needs, regulatory immaturity, technology immaturity, or a combination of these. In this paper, we examine the business decision that a spectrum entrant must take with regard to technology choice. We use a simple decision-analytic framework using standard Net Present Value (NPV) calculations to analyze that decision. Our conclusion is that, the spectrum decision is time dependent. Exclusive use offers a higher NPV than the alternatives in the long run, but it takes time for exclusive use to become the dominant choice. Cooperative sharing provides the second highest NPV when the spectrum market is liquid, followed by opportunistic sharing under optimistic spectrum availability and contention assumptions. If our assumptions are relatively close to reality, it is therefore not surprising that we do not see greater adoption of DSA technologies - it is not the top choice for spectrum entrants with a long term view. The second choice, cooperative sharing, does occur, but in the form of MVNO agreements. The last option for a spectrum entrant is opportunistic sharing. Why should an entrant settle for the third best approach?