Spectrum Auction Theory and Spectrum Price Model

Radio spectrum is scarce and invaluable telecommunication resource. Spectrum auction should determine spectrum price as consistent to its actual value. In order to ensure spectrum is efficiently assigned, spectrum is priced to reflect the value it can add to help promote economic and technical efficiency with users who have bid for it. Putting a price on spectrum not only ensures spectrum management efficiency, but can add revenue for the government which will in turn cover the cost of spectrum. This paper presents a radio spectrum valuation method and describes how to calculate reserve price of the spectrum. The contributions in this paper could assist telecom policy makers to gain more understanding in development of radio spectrum valuation.