Spectrum license terms affect service provider willingness to invest in networks, it is worth noting. Consider supplier behavior for fixed-term licenses.
In November 2000, Ofcom auctioned 28-GHz spectrum for fixed wireless applications, with 15-year terms.
During the first few years, at least some operators invested heavily. As you might guess, investment tends to weaken as license expiration nears. Rational actors will limit such investment as they are not assured the licenses will be renewed, leading to uncertainty about the return on investment.
In a more recent Ofcom spectrum auction in February 2008, 10 GHz, more 28 GHz, 32 GHz and 40 GHz spectrum access licenses were auctioned on an “indefinite term”.
Following this auction, the majority of 28-GHz licenses auctioned in November 2000 also were revised to “indefinite term.”
That allows service providers to make additional investments with some certainty about continued access to their spectrum.
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