Balancing Income and User Utility in Spectrum Allocation

To match wireless users' soaring traffic demand, spectrum regulators are considering allocating additional spectrum to the wireless market. There are two major directions for the spectrum allocation: licensed (e.g., 4G cellular service) and unlicensed services (e.g., Super Wi-Fi service). The 4G service provides a ubiquitous coverage, has a higher spectrum efficiency, and often charges users a high service price. The Super Wi-Fi service has a limited coverage, a lower spectrum efficiency, but often charges users a low service price. The spectrum regulator now simply allocates the spectrum to maximize its income, but such an income-centric allocation does not ensure the best spectrum utilization by the users. This motivates us to design a new spectrum allocation scheme which jointly considers the spectrum regulator's income and the users' aggregate utility by investigating three market tiers: the spectrum regulator, 4G and Super Wi-Fi operator coalitions, and all the wireless users. We formulate it as a three-stage game and derive the unique subgame perfect equilibrium. Compared with the traditional income-centric allocation, we prove that the proposed scheme significantly improves users' aggregate utility with a limited spectrum regulator's income loss.