There are very few things in the world of technology that are as financially important and frustratingly arcane as the allocation and use of radio spectrum. Permission to use a slice of radio frequencies is at the heart of the broadcast (and satellite) television industries, and the mobile phone industry, and the radio industry, not to mention many smaller businesses ranging from paging services to alarm monitoring companies.

In the US, as in the UK, the government decided over a decade ago that it would begin auctioning off spectrum when it became available rather than simply give it away, and the resulting contests have produced many billions for the treasury – and many many millions for the lawyers, investors, and game theorists who played it the best. Now the Federal Communications Commission is gearing up to auction some especially valuable spectrum that will become available in 2009, when TV broadcasters are supposed complete the transition to digital transmission and give back spectrum that had been used for old-style analogue TV. The proceeds could exceed $30 billion.

That all sounds well and good, but be prepared for barrage of impenetrable arguments about how the spectrum should best be sliced up and allocated. Police officers, firefighters and other public safety officials say there's a dire need for more radio frequencies for emergency communications, and in post-9/11 America they are likely to get a good hearing on that. The incumbent wireless companies will probably push for auction rules that are least likely to produce competitive services, though you can be sure the arguments will be dressed up as technical rather than economic ones.

As The New York Times reported this week, one group that's maneuvering for the spectrum includes John Doerr, America's pre-eminent venture capitalist, as well as veteran tech executive Jim Barksdale, former FCC chief Reed Hundt, audio entrepreneur Vanu Bose, and one of Google's first investors. They want to see the spectrum used for portable audio, video and data services.

Contests in which government bureaucrats play a major role in arbitrating competitions involving the most powerful capitalists in the world always have an odd dynamic. But with spectrum, there's another wildcard: the simple fact that even today, radio engineering is subject to a remarkably high degree of uncertainty. How exactly various kinds of complex radio transmissions will behave in large-scale, real-world applications is still very hard to know.

Consider, for example, the remarkable case of Irwin Jacobs and his company, Qualcomm. Decades ago, Jacobs developed a fundamentally different – and more efficient – method for handling mobile phone communications. But for many years a lot of well-qualified critics contended that the technology, known as code division multiple access (CDMA), simply would not work on a massive scale in the way Jacobs envisioned. The critics were wrong, and today Qualcomm is a dominant force in the mobile business.

More prosaically, when your wi-fi signal goes from full strength to nothing and back again for no apparent reason, that's the mystery of radio wave propagation at work.

The finer you slice the spectrum, and the more information you try to cram into the frequencies, and the more demanding the applications (high-speed connections that have to be maintained while in motion, for example) the more uncertainty there is about the many possible types of interference and signal failure.

So whenever new spectrum decisions are being made, be prepared for acrobatic arguments involving an alphabet soup of acronyms representing exotic new radio technologies and all the technical uncertainties inherent therein. And then the real political horse-trading will begin.

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