certain purposes. Their effect is therefore not so much to regulate a re-
source (spectrum) as it is to determine who has the rights to engage in cer-
tain kinds of businesses, where. To say that company X has an FCC license
is to say that the government has given company X the right to engage in a
certain kind of business (say, radio broadcasting) using certain equipment
tuned to certain radio frequencies.[12-1]

The manner in which this allocation of rights to use spectrum is made
has changed, and it changes still. As Eli Noam describes, in the first era of
spectrum use, spectrum was allocated on a first come, first served basis. This
was before the federal government entered the field. After 1912, Noam's
"second era," it was the government that chose who got what spectrum. This
invited predictable biases: existing owners bought the favor of regulators,
and regulators in turn protected them. The examples are many, and extraor-
dinary (at least to those who live outside D.C.): Hazlett has cataloged the
cases where favored interests have succeeded in using their power over regu-
lators to resist new technologies;[12-2] as Noam writes, "[I]n the early 1950s, only
newspaper companies that had editorially endorsed Eisenhower for Presi-
dent had a chance at getting a TV license."[12-3]

In the third era (now), the right to use spectrum is increasingly allocated
through auctions. The government sells the right to the highest bidder
(subject to a scad of typically governmentlike, mainly silly, conditions).
That bidder uses the spectrum as the auction specifies or, in a small set of
cases, the bidder is then free to reassign the right to others.

Politicians from the Left and the Right just love auctions. For the Left,
auctions promise more money for the government to spend; for the Right,
auctions sound like markets, and markets are always good.

But as we saw in Chapter 5, both auctions and government assignments
ignore a fundamentally different way to "allocate" spectrum -- namely, not
allocating it or, more realistically, not allocating all of it. Rather than as-
signing rights to use the spectrum resource ex ante, this alternative would
allow users to share the resource when the need to use it arose. This sharing
would be policed either by a market (in Noam's conception) or by other
technological devices designed to deal with congestion.[12-4] Like the Internet,
on this latter model, the system would find a technological means to deal
with undercapacity. Spectrum could then be shared, and a range of differ-
ent technologies says how.

How much? How completely? Could shared spectrum govern every-
where?

The optimists in this story say that shared spectrum could service all of

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v?