The issue of spectrum scarcity has prompted the FCC to adopt a policy of flexible spectrum allocation, resulting in auctions of reclaimed spectrum for wireless data applications. Critics contend that the solution to spectrum scarcity is in technologies like digital compression.

"As the Internet migrates from the personal computer into Web-enabled wireless devices, spectrum scarcity has emerged as a major 'gating factor' in the new economy," Kennard told the Industrial Telecommunications Association conference here. "Spectrum auctions have helped. It is pretty clear that auctions have made it possible for us to allocate spectrum much more quickly and efficiently."

As part of the auction process, the FCC has also introduced a "guard band manager" approach designed to use the best features of auctions, such as speeding the reallocation of spectrum to allow the private wireless industry to coordinate the use of frequencies.

The FCC recently completed its 700-MHz auction of so-called "guard band" frequencies designed to protect new users of channels 60 through 69 from interference from adjacent broadcasters. The auction, completed on Sept. 21, raised a total of nearly $520 million in net bids, the agency said.

So-called "guard band managers" will be able to subdivide their spectrum and lease it to third parties for commercial and private wireless uses. The approach is designed to improve spectrum management and protect public safety spectrum from interference.

"Band managers can subdivide and lease spectrum to third parties without going through Commission licensing procedures for each separate transaction. That means more efficiency," Kennard said. "The spectrum can be put to a wide range of uses, including fixed or mobile private internal communications and private common carriage."