Conference Agenda

In the United States, large portions of prime spectrum are assigned to federal users. While these federal uses provide substantial public value, current spectrum governance structures provide limited mechanisms for measuring or comparing that value with the economic value generated by commercial wireless services. As demand for mid-band and low-band spectrum intensifies with the expansion of 5G and future wireless technologies, policymakers increasingly face difficult tradeoffs between maintaining federal assignments and enabling commercial access. This paper examines how federal spectrum can be valued in a way that supports transparent and efficient policy decisions.

The need for more systematic methods of evaluating federal spectrum use has been reflected in recent policy, including the requirement in the 2025 budget reconciliation bill (H.R.1) for the Commerce Department to “publish a biennial report, with the last report to be published not later than June 30, 2034, on the value of all spectrum used by Federal entities (as defined in section 113(l)of the National Telecommunications and Information Administration Organization Act (47 U.S.C. 923(l))), that assesses the value of bands of frequencies in increments of not more than 100 megahertz.”

Likewise, the 2024 National Spectrum Strategy Implementation Plan called for a “value-based model to inform spectrum policy decisions” (NTIA 2024, p. 12). The recognition of the importance of “value” in managing federal spectrum is not new. For example, it also was featured in a 1991 NTIA spectrum policy study (NTIA 1991).

The central challenge is that federal spectrum assignments occur through administrative processes rather than market mechanisms (Beard et al., 2013). Federal agencies receive spectrum authorizations based on operational needs perceived by regulators, assignments cannot be traded, and terms for use may persist indefinitely. Unlike many commercial wireless licenses– often assigned through auctions that reveal market valuations —federal spectrum holdings rarely generate price signals. As a result, policymakers lack information key to comparing costs and benefits across rival deployments. This absence of valuation mechanisms typically leads to inefficient spectrum utilizations.

The economic rationale for valuing spectrum derives from the insight that spectrum, like other scarce resources, carries an opportunity cost (Coase, 1959, Hazzlet & Honig, 2016). Even when federal agencies do not pay directly for the spectrum they occupy, their use prevents alternative activities yielding social value. Estimating this opportunity cost is therefore essential for policy choices that maximize social welfare.

This paper develops a framework for valuing federal spectrum based on economic principles as well as methods to estimate the costs and feasibility of relocating federal systems or implementing spectrum-sharing arrangements. These costs include equipment replacement, system redesign, operational constraints, and transition timelines. The framework also incorporates qualitative and quantitative assessments of the public benefits associated with federal spectrum uses, including national security, public safety, scientific research, and environmental monitoring. Quantitative estimates should take into account budgets allocated for the services along with the feasibility of substituting current spectrum inputs with alternatives.

Building on these elements, the paper proposes an opportunity-cost approach to federal spectrum management. Under this approach, federal spectrum assignments would be periodically evaluated using a structured comparison between the estimated economic value of alternative uses and the benefits of continued federal operations. Such evaluations could provide a transparent basis for determining whether spectrum access rights should remain under exclusive federal control, or be repurposed to enable commercial deployment.

The paper also explores institutional mechanisms that could operationalize federal spectrum valuation. One option is to expand incentive-based relocation funds (such as the Spectrum Reallocation Fund (SRF) (47 U.S.C. § 928)) that allow agencies to retain a portion of auction proceeds when they vacate or share spectrum bands. Another is the introduction of internal spectrum accounting systems that assign shadow prices to federal spectrum holdings, encouraging agencies to consider opportunity costs in planning and procurement decisions (an idea that also appeared in (NTIA 1991)). Advances in dynamic spectrum sharing technologies—as in the CBRS system—may further enable hybrid models in which federal and commercial users coexist within the same bands but lead to different opportunity costs that need to be accounted for (Berry et al., 2023).

Valuing federal spectrum has important implications for economic growth, innovation, and public finance. Wireless networks are central to the digital economy, enabling productivity gains across industries and supporting emerging technologies.. At the same time, federal agencies depend on reliable spectrum access to fulfill critical missions. Developing transparent and analytically rigorous approaches to spectrum valuation can help reconcile these objectives by enabling policymakers to identify allocations that maximize overall social welfare.