Markets in Experimental Licenses

Abstract

Markets for experimental licenses could provide flexibility and shorter-term spectrum licenses that currently are unavailable in the current statutory framework. I propose that private firms be permitted to register with a newly established “Special Temporary Authority Facility” to conduct auctions and collect fees for experimental special temporary authority (STAs) licenses. Under a proposed “Spectrum Exchange Act of 2024,” the FCC would be tasked with regulating the registrations of these firms. Price discovery from bids for experimental licenses would help regulators assess how valuable certain spectrum bands are, what uses are valuable, and enable greater use of unused spectrum in smaller time frames and smaller geographic areas. An intermediary approach would help the FCC find spectrum bands for the spectrum pipeline by allowing them to watch market participants iteratively discover valuable uses in smaller, more local areas. The facility would be driven by the demand-side, rather than rulemaking from the supply-side.

Keywords: radio spectrum, flexible-use license, spectrum allocation, spectrum markets

JEL Classification: K23, O38