Competitive Spectrum Pricing under Centralized Dynamic Spectrum Allocation

Dynamic Spectrum Allocation (DSA) has been viewed as a promising approach to improving spectrum efficiency. With DSA, Wireless Service Providers (WSPs) that operate in fixed spectrum bands allocated through static allocation can solve their short-term spectrum shortage problems resulting from the bursty nature of wireless traffic. Such DSA mechanisms should be coupled with dynamic pricing schemes to achieve the most efficient allocation. This chapter models the DSA problem where a centralized spectrum broker manages “white space” in the spectrum of TV broadcasters and sells the vacant spectrum bands to multiple WSPs, as a multi-stage non-cooperative dynamic game. Furthermore, an economic framework for DSA is presented and a centralized spectrum allocation mechanism is proposed. The simulation results show that the centralized spectrum allocation mechanism with dynamic pricing achieves a DSA implementation that is responsive to market conditions as well as enabling efficient utilization of the available spectrum.