This paper addresses the long standing spectrum policy question surrounding how much of the future of wireless innovation will depend on exclusively-licensed spectrum, allocated by auction and traded in secondary markets, relative to how much will utilize bands in which open (unlicensed, dynamic frequency sharing, license-by-rule etc.) wireless systems are permitted. I review evidence from eight wireless markets: mobile broadband; wireless healthcare; smart grid communications; inventory management; access control; mobile payments; fleet management; and secondary markets in spectrum. I find that markets are adopting open wireless strategies in mission-critical applications, in many cases more so than they are building on licensed strategies. Eighty percent of wireless healthcare; seventy percent of smart grid communications; and forty to ninety percent of mobile broadband data to smartphones and tablets use open wireless strategies. Open technologies are dominant in inventory management and access control. For mobile payments, current major applications use open wireless, and early implementations of mobile phone payments suggest no particular benefit to exclusive-license strategies.

The political economy of decision-making in this area (exhaustive auctioning) is skewed. Those who seek exclusive licensing internalize the full benefit of exhaustive auctioning. Those who support open spectrum cannot internalize more than a small portion of openness because the policy they lobby for excludes ownership by any one firm or alliance. The former will systematically out-lobby and out-bid the latter.