Spectrum Allocation without Market
Abstract
The growing demand for spectrum-communication frequencies-has once more come to outstrip its supply. Electrical interference, congestion, and resultant spectrum scarcities threaten to make air, ground, and sea travel slower and less safe; construction, distribution, mining, and manufacturing more costly; data transmission and information processing networks harder to develop for wide use; and some potential advances in education, law enforcement, and national security difficult to realize. This silent crisis seems due at least as much to deficiencies in our allocational practices as to any inherent characteristics of the radio spectrum resource. Today, rights are awarded gratis by the Federal Communications Commission and the President's Office of Telecommunications Management. With right-holders prohibited from selling any portion, they lack incentives to economize use today, to withhold current use if greater future value will result, or to transfer rights to others who may value them more highly. Large portions of spectrum are allocated to different services with no chance for interservice transfers despite the sometimes permissive policies that govern intraservice usage [24, p. 271. Some consequences of this centralized nonprice system have been aptly described by the President's Task Force on Communications Policy:
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