Volume 2016 — Issue 1

The FCC is in the midst of a rulemaking to create a novel tripartite sharing regime in the 3.5GHz band. This has the potential to be a watershed event in the decades long transition toward more flexible and dynamic, market-based management of the radio frequency spectrum. As part of this proceeding, Lehr (2014(b)) proposed interpreting commercial licenses to protected access as options contracts that explicitly separated the interference protection and exclusion rights as a way to endogenize market-based incentives to share spectrum. This paper builds on Lehr (2014(b)) by setting forth the larger vision implicit in the earlier proposal and expanding on the case for separating exclusion and interference protection rights. This separation will enable a licensing regime that will support more dynamic and granular assignment of access rights; is more consistent with the future of radio networks and spectrum utilization; and will expand the economic tools available to regulators for incentivizing efficient spectrum usage, which necessarily includes sharing spectrum more intensively.