NeTS: Small: Collaborative Research: Network Economics for Secondary Spectrum Ecosystems

Auburn University, Auburn AL

Investigators

Abstract

The emerging cognitive radio (CR) technology provides new solutions to the wireless service business. A CR-capable service provider can acquire spectrum on demand from the secondary spectrum market to avoid paying the huge spectrum licensing fees, significantly lowering the threshold of entry to the wireless business. As a result, it is foreseeable that small and local secondary wireless service providers (SSPs) will flourish, transforming the wireless business from one dictated by few giant carriers to a much more competitive marketplace. Existing secondary spectrum market models mainly consider a market comprised by big SSPs, where every SSP is assumed to have sufficient secondary radio resource and coverage to independently service end users. In practice, however, these models inevitably exclude the large number of small and local SSPs that do not have enough resource and coverage to independently satisfy the demand of end users (e.g., for high-rate access or long-range routing) from the market, leading to reduced market competitiveness, and henceforth compromised market efficiency. This project will investigate a novel competition-and-collaboration spectrum market framework, whereby small and local SSPs will collaborate in providing service to retain more market shares, better profitability, stronger market competitiveness, and higher market efficiency. This project, if successful, will significantly advance our understanding on the network economics of the secondary spectrum ecosystem comprised by primary spectrum sellers, SSPs, end users, and human, and will contribute to the real-world deployment of economically feasible and sustainable spectrum market. The proposed research will follow three thrusts. (1) For short-term services, assuming perfect rationality for every player in the market, the secondary spectrum market is first modeled as a spot market. A truthful procurement auction model is proposed to study the optimal market mechanisms and their strategy proofness under a variety of market conditions. (2) For long-term services, the project will study the potential and implication of the futures market, in which service predictability in the time domain is exploited to improve market efficiency, using methods such as option pricing and hedging. (3) The rational-player assumption is released and the project will study the impact of irrationality and human factors on market efficiency using methods from Behavioral Economics. This project will also carry out a comprehensive educational plan to broaden its impact, including integrating research with undergraduate and graduate education, recruiting and outreaching to minority and under-represented students, and efficient dissemination and outreaching to the general public.