Online spectrum marketplace operator Spectrum Bridge yesterday announced the creation of the SpecEx Spectrum Index, which is designed to help buyers and sellers of radio frequencies determine valuation trends in the spectrum marketplace.

"With this index, we can help licensees determine whether spectrum is worth more or less than it was when they purchased it," said Rick Rotondo, vice president of marketing for Spectrum Bridge. "Just like any other index, it doesn't reflect the value of an individual license, but it does indicate general trends."

As an online marketplace for wireless spectrum with more than $750 million in listings, Spectrum Bridge expects to have access to considerable valuations regarding spectrum sold on the secondary marketplace, Rotondo said. To date, no transactions have been completed via Spectrum Bridge, but several are pending at the FCC, he said.

Information from these deals are combined with other key components — including values paid at FCC auctions and the capitalization of large publicly traded spectrum holders — in a formula to determine the value of the spectrum index. By looking at the index for a given time period, spectrum holders and those seeking to purchase spectrum have free access to information that "gives people a sense of the marketplace," Rotondo said.

"The idea is to make the secondary market more transparent, more liquid and more efficient," he said.

A spectrum index is needed in today's marketplace, particularly in times between FCC auctions, said Coleman Bazelon, economist and principal at The Brattle Group, an economic, financial and regulatory consulting firm.

"The SpecEx Index plugs a long-standing hole in the spectrum-valuation tool kit," Bazelon said in a prepared statement. "Previously, analysts could only use historical FCC auction and incomplete private transaction data to estimate market perceptions of spectrum values. This index can supplement that information by providing a view to market trends and fill in the gap in market perceptions.

"This ability to view current market sentiment is even more important in times when public information about spectrum prices and transactions is scarce, as it has been in recent months."

However, Rotondo emphasized that buyers and sellers should use the SpecEx Index only as a general guideline reflecting the overall valuation trends of all spectrum. Detailed valuation to be used for the purchase or sale of spectrum is available for a fee from Spectrum Bridge or other market professionals, he said.

"Just because the Dow Jones may go down, a particular stock may go up," Rotondo said. "The same thing is true with spectrum — a particular market or a particular band may be valued differently from the overall marketplace."

Separately, Rotondo said Spectrum Bridge's first online auction of spectrum — Part 22 spectrum in Nevada and Florida that can be used for Part 90 applications such as public-safety LMR — is expected to be conducted at the end of July.