Economic versus technical approaches to frequency management

While telecom markets have been liberalized, the institutional framework for spectrum management has largely remained unchanged. In particular, the process of allocation of the spectrum to different applications is still based on technical rather than economic criteria. This paper contrasts economic and technical approaches to frequency management, with an examination of spectrum management challenges and the current regulatory framework as the starting point. The benefits and limitations of the free market approach are discussed, and an economic evaluation of the Danish spectrum is used to demonstrate how regulators could incorporate an economic dimension into frequency allocation. The paper concludes that a free market approach is still not possible for some parts of the frequency management process; in the short term, regulators must therefore continue to prioritize between applications.