Spectrum allocated for broadband data services can be generally classified as licensed for exclusive use or unlicensed (open access). We consider a scenario in which new spectrum is added to an existing set of licensed bands.
We compare the social welfare obtained from this new spectrum
when designated as unlicensed or licensed, assuming different market structures for the licensed service providers, i.e., monopoly, oligopoly, and perfect competition (many competing providers). Conditions on demand and congestion (latency) functions are given for which adding a small amount of unlicensed spectrum {em decreases} the total welfare. For example, this occurs for linear latency and concave decreasing demand functions. Our results build on prior work on competition with congestible resources.