Original URL: http://www.theregister.co.uk/2009/05/14/spectrum_index/
Index wants to play Nasdaq with spectrum
The value of arbitrary delineations of intangibles can go down, as well as up
A new index tracking the value of US radio spectrum was launched yesterday, and now stands at 253.17 - though without a historical context that's not very useful.
The index comes from Spectrum Bridge; the world's first (and still only) trading market for radio spectrum. It is based on its analysis of spectrum valuations gleaned from company reports and available trade information, along with weighting based on owners' assets and any restrictions placed on spectrum usage.
Spectrum Bridge took a date; January 1st 2005, and set that as a baseline valuation of 100. This means that by their reckoning, the value of radio spectrum has more than doubled since then, which is nice. Now they're hoping that their Index will be used alongside the FTSE and Dow Jones as a bellwether on the state of the (wireless) economy:
Except it's not actually that useful yet - a stock-market index instantly reflects trading conditions, but the spectrum market isn't that busy, so the index will be updated daily by Spectrum Bridge staff based on their research - and analysis that can't be replicated by anyone else based on the raw data.
The Spectrum Index is more than a shameless promotion of Spectrum Bridge - it will be the only way to get a general idea of how the airwaves around us are valued, and companies can look at what they paid and when, to get a rough idea of what their assets are now worth - even if the information won't be very accurate until the number of trades increases. ®