Sharing incentivization through flexible spectrum licensing

Recent developments in radio access technologies are radically changing the management of the spectrum, progressing from exclusive licensing with static conditions towards more flexible licensing schemes which allow dynamic spectrum assignment. In this context, spectrum transactions between participating actors should generate mutual benefits. However, the fact that spectrum sharing increases the interference between users requires a clear definition of this interference and any associated mutual benefits. This paper proposes a contract structure between a primary and a secondary operator, which considers different service requirements in the context of spectrum transactions. The simulated contracts and transactions suggest that (i) the optimal level of interference is usually positive, and (ii) given a spectrum size, an increase in the demand results in additional gains in a scheme which allows voluntary transactions with respect to a scheme, which do not allow or minimize the interference.