Market Impacts of Relaxed Incumbent Protection in Spectrum Sharing

Spectrum sharing approaches such as that adopted in the Citizens Broadband Radio Service (CBRS) provide strong protection to incumbent users of the spectrum. This can lower the value of such spectrum for commercial service providers (SPs). This paper considers the impact of relaxing this protection on the market for secondary spectrum services. We assume that SPs must reduce their traffic when the incumbent is present. We find that consumers always benefit from relaxing incumbent protection but SPs' revenue and social welfare exhibit subtle behavior. Depending on the extent of relaxation, the market might respond negatively implying that regulators need to carefully choose such policies.