Demands on the communications spectrum have increased sharply because of the growth in radio communication services, the large bandwidths now required, and the rapid increases in world population. The problem will be exacerbated by the requirements of high definition television and the enormous amounts of information that will be transmitted by radio. The electromagnetic spectrum is a finite natural resource of great value used for emergency communications and military operations as well as for commercial purposes. Both government and the marketplace have proper roles in the allocation of its resources. There are no viable alternatives to international organizations such as the International Telecommunication Union or to agencies such as the Federal Communications Commission for the regulation of radio communication and the assignment of spectrum to essential public services. Although government auctions of spectrum are justifiable where there is no way to distinguish among commercial entities seeking to use the same bands for similar services, the practice is inherently inequitable and discourages development of new uses for the spectrum by removing investment protection. Recommended alternatives to auctions are: (1) lotteries, which keep assets and proceeds in the economy; and (2) ongoing charges for current as well as new users of the spectrum.