Sharing of unlicensed spectrum by strategic operators

Facing the challenge of providing sufficient network capacity for wireless data, the industry is currently debating how to take advantage of hundreds of megahertz of unlicensed spectrum. One specific proposal being considered by the 3GPP is to retool and deploy Long Term Evolution (LTE) technologies in unlicensed bands. This paper studies the fundamental questions of whether and how the unlicensed spectrum can be shared by intrinsically selfish operators. Because the operators can be strategic, the questions are studied in a game theoretic setting. A mechanism is proposed for operators to share the spectrum in a given area and reach a subgame perfect Nash equilibrium. The entry game is also studied, where it is shown that the number of strategic operators willing to invest is limited due to entry barriers and externalities. These results suggest spectrum sharing mechanisms for the deployment of LTE in unlicensed bands.