Entities seeking additional spectrum and spectrum holders with underutilized spectrum will have new options to address their respective needs during the third quarter of this year, when startup Spectrum Bridge plans to go live with an online marketplace for exchanging wireless spectrum.

With the end of the 700 MHz auction, the FCC is not expected to allocate more licensed spectrum for some time. However, as the almost $19.6 billion in high bids in the auction underscore, licensed wireless spectrum is a valued commodity.

While virtually the entire spectrum has been allocated, not all of it is being used. In the “sweet spot” for mobile broadband — between 200 MHz and 5 GHz — only 10% to 16% of all allocated spectrum is used at any given time and location, said Rick Rotondo, vice president of marketing and communications for Spectrum Bridge, which emerged from a year of stealth mode in March.

“There's a big spectrum paradox — all of it has been allocated, yet most of it sits unused,” Rotondo said. “Clearly you have spectrum holders sitting on spectrum assets that are not generating revenue for them.”

Spectrum Bridge plans to establish a secondary marketplace for spectrum holders to sell access to their airwaves under myriad conditions instead of the current model of owning licenses outright, Rotondo said. He added that spectrum holders can “disaggregate” their spectrum holdings for sale by frequency, time or geography — or some combination thereof — in a manner similar to the way multiple listing services market available real estate.

For example, a commercial carrier with a license for a large region might want to deploy networks in urban areas immediately but not address the rural areas for five or 10 years. Through Spectrum Bridge, a rural enterprise could lease the unused spectrum for its own network, providing it with needed airwaves and providing the spectrum holder with a new revenue source.

In addition, users could request to lease spectrum for as little as a few hours in a given location, or an enterprise could secure spectrum license rights for its campus location. In addition, the notion that the FCC could use this strategy to disburse spectrum in the TV white spaces is “very, very interesting,” Rotondo said, adding that Spectrum Bridge would beta-test its online marketplace during the second quarter of this year.

Driving the exchange is set of software tools that make it “easy” for spectrum holders to disaggregate airwaves and for potential buyers to lease spectrum without being a wireless expert, Rotondo said. These tools have value outside the spectrum-exchange arena, he added.

Public safety entities potentially are both buyers and sellers of spectrum, but Rotondo said he believes they would want to reserve the right to use their spectrum in emergencies.

“If a public safety entity says, ‘We want to lease our spectrum because we need revenue. We want it back when we need it. We want to potentially get more spectrum when we need it. How do we do that?’ — we'll work with them and do it,” Rotondo said.

Craig Mathias, a principal with Farpoint Group, called the Spectrum Bridge marketplace concept “the future of radio bandwidth” in a statement included in the company's press release. But other industry analysts were considerably less enamored with the concept.

“The idea is a still-born child — it's dead,” said Roger Entner, vice president of communications for IAG Research. “When you look at cellular service, it takes at least 20 years to break even on the investment in network and marketing. Are they going to have 20-year leases or 99-year leases when the licenses only have a 10-year term [from the FCC]? Nobody will lease spectrum that can disappear again from a competitor.”

Wireless consultant Andrew Seybold called the Spectrum Bridge model “an interesting concept” that he believes will be more realistic commercially when frequency-agile radios are commonplace next decade. However, Seybold said it could be much longer before a spectrum holder with mission-critical responsibility would lease its spectrum to other users.

“I think they're dreaming,” Seybold said of Spectrum Bridge's hopes that mission-critical entities would be willing to lease their underutilized spectrum. “There's spectrum set aside for the Secret Service detail for the president of the United States — it's nationwide spectrum, but it's only used where the president is and where the advance teams are. So I could say, ‘I know where the president is for the next 30 days, and he's not going to be on the West Coast, so that spectrum ought to be available.’ Do you think the Secret Service is going to let that happen?”