Enabling efficient wireless communications: The role of secondary spectrum markets

Despite the potentially critical nature of secondary markets in maintaining efficient spectrum and wireless markets, research has to date has focused primarily on the Federal Communication Commission's rules for initial distribution of spectrum. To redress this lacuna, we first examine the evolution of conceptual and policy developments directed toward secondary spectrum markets. Then, we seek to move beyond those efforts to empirically document the development of secondary spectrum activity in the United States and the relationship of that development to the evolving policy toward such markets. We categorize and explore different types of secondary spectrum markets. Then, by drawing on a database of every spectrum license transaction since 1994, we explore the depth and breadth of spectrum trading in secondary markets. We find that the FCC has radically reduced the time it takes to approve trades, making the system more akin to notification than to approval. We also find that a large amount of spectrum changes hands each year. While these conclusions do not necessarily imply that secondary markets work efficiently, they do show that policy efforts to facilitate and energize the growth of secondary spectrum markets are bearing considerable fruit.