The historical practice in spectrum policy has been for regulatory authorities around the world to assign rights to specific radio frequencies to applications according to theirjudgment regarding the “best and highest use” of each frequency. This system enabled regulators to harmonize assignments around the world, an important imperative given the fact that radio waves don’t recognize international borders. It worked well until all of the most useful frequencies were assigned.
Technology never stops progressing, however. We’re now in a situation where many of the initial assignments of spectrum are obsolete, so the task of spectrum regulation has become one of reassigning already utilized spectrum to new uses that have more social and economic utility than old ones. Spectrum incentive auctions are a quick and practical means of reassigning spectrum, so it’s important that Congress expeditiously grants the FCC liberal authority to conduct them.
Spectrum reassignment should not be viewed as a one-time event. Spectrum reassignment will become the normal activity of spectrum regulators for years to come, as we can expect that the uses we currently regard as “best and highest” today will be less attractive in the future as the menu of spectrum usage choices expands. In the ultimate future, advances in technology may make regulatory spectrum allocation unnecessary; systems may evolve that will enable broad scale self-regulation, negotiation, and inter-regulation of spectrum use; “smart radios” would be one major component of such as system. These systems don’t exist yet, so policymakers must become adept at the practical means of spectrum reassignment.
Administrative agencies are not effective at evaluating competing demands for a single resource such as spectrum. U.S. policy has recognized since the mid ‘90s that market mechanisms such as spectrum auctions are better, more effective means. Incentive auctions that effectuate the transfer of particular blocks of spectrum from one application and rights holder to another are the best and most practical tool currently available for