The cost structure of personal communication services

The costs of constructing and operating personal communications service (PCS) systems are examined to assess the potential spectrum requirements of these services. The cost model developed for this task estimated the costs of building and operating a new PCS network, as well as the costs of providing PCSs using existing infrastructure such as the telephone, cable television, and cellular telephone networks. Based on these estimates, this study finds economies in using each of these infrastructures. Moreover, no justification exists, based on the characteristics of the cost functions, for limiting the number of licenses to the PCS market for licensing of 20 MHz of spectrum or more, and 20 MHz may be a sufficient spectrum allocation for implementing low-cost PCS systems.<>