Pricing the ether [radio spectrum pricing]

We know that the radio spectrum is a limited and valuable resource; but how valuable, exactly? The authors describe an attempt to put a price on the intangible made by the UK Radiocommunications Agency (RA) and the Office of Telecommunications Regulation (Oftel) who commissioned a study to find a way of putting an economic value on bands of spectrum. The study was performed by the National Economics Research Associates (NERA) which provided the economic expertise, and Smith System Engineering, which provided the technical and user knowledge. The study was conceived against the backdrop of the RA's consultative document issued early in 1994, on market-based approaches to spectrum management, such as spectrum pricing and auctions, and in the wake of the PCS auctions in the USA, which had raised billions of dollars for the government. The authors discuss spectrum management for existing users. They then discuss the various theoretical models used in economic value estimation of the radio spectrum. The results of this evaluation are discussed.