A secondary market for the trading of spectrum: promoting market liquidity

Mark Bykowsky

Telecommunications Policy, 2003, vol. 27, issue 7, 533-541

Abstract: The development of a successful secondary market for the trading of spectrum is not a foregone conclusion. The multi-dimensional nature of radio spectrum, which requires that a bid to buy and an offer to sell conform across the multiple dimensions, suggests that the market may be very "thin." In addition, existing commercial users of spectrum have little incentive to sell excess spectrum if such spectrum will be employed by the buyer to provide a service that competes with the service provider by the seller. This paper discusses several steps to enhance market liquidity. One approach involves obtaining participation from federal spectrum users. Another step involves developing a market that both enhances market liquidity and provides participants the opportunity to incorporate a call option in the traded asset.

Keywords: Spectrum; management; Spectrum; trading; Market; liquidity; Call; option (search for similar items in EconPapers)
Date: 2003
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