UNDERSTANDING WI-FI 2.0: FROM THE ECONOMICAL PERSPECTIVE OF WIRELESS SERVICE PROVIDERS

Abstract

Wi-Fi 2.0 refers to Wi-Fi-like Internet access operating on whitespaces in the licensed spectrum using cognitive radio technology. Wi-Fi 2.0 is expected to provide better performance and larger coverage than today's Wi-Fi, thanks to the good propagation characteristics of the legacy spectrum such as TV bands. Wi-Fi 2.0 is modeled as a network consisting of an access point (called CR hotspot) and end-user terminals (CR devices) operated by a CR wireless service provider. In this article we focus on the economical perspective of Wi-Fi 2.0 and discuss various aspects in profit management of Wi-Fi 2.0 WSPs. In particular, we consider profit-maximizing optimal strategies in terms of customer admission/eviction control and inter-WSP market competition. We first show that Wi-Fi 2.0 operates on time-varying spectrum availability due to the ON-OFF channel usage of legacy users, and advocate the necessity of customer eviction control upon appearance of legacy users. We also identify two types of WSP-WSP market competition in leasing the limited spectrum resources from the licensees and in enticing end customers with a competitive price. Then we enumerate the key factors affecting the profit of collocated WSPs, such as channel leasing cost, service tariff, QoS provisioning, and coexistence with legacy services. By examining Wi-Fi 2.0 from an economic point of view, we show its commercial value in developing next-generation CR applications that benefit both legacy and CR users.