ABSTRACT
Few would deny that the present centralized nonprice spectrum system is economically inefficient or that it fails to further many overriding national priorities. Without markets and prices for radio frequencies, it is impossible to tell whether spectrum has been allocated optimally among alternative users and uses, whether users have struck correct balances in their mix of radio and nonradio substitutes, whether they have sufficiently developed spectrum at its intensive or extensive margins. Yet when a scarce resource is given away, as spectrum is, there is a strong presumption, supported by numerous examples, that the wrong people often use the wrong frequencies at the wrong time; and that they innovate spectrum-economizing (or spectrum-developing) equipment in the wrong places for the wrong reasons.
