Ask anyone about the spectrum, and you might get vague references to rubber keyboards or games on cassette tapes. Clive Sinclair's ZX Spectrum, the pioneering home computer, is so low-tech that it's become a collector's item.

The value of the radio spectrum, however, is driven by more straightforward economics and reached its apotheosis with this year's £22 billion third-generation mobile phone auction.

The unexpectedly high take from the 3G auctions in the UK and Germany (where the auction garnered £31bn) has led to a reappraisal of the value of all slivers of the radio spectrum. Indeed in some European countries there has been a scramble to ape the UK experience, mainly without success.

Similarly, the inflated cost of one section suddenly changes the economics of the rest of the spectrum. Does the technology and capacity of 3G licences justify £22 billion when the entire UK digital radio spectrum was snapped up for £50,000? Digital radio, for example, will allow text and even pictures to be downloaded at transmission speeds comparable to today's home internet experience.

With such a disparity in the cost of different segments, and given the way the media are converging, businesses could pay billions to mine every technological nook and cranny of the spectrum for alternatives and still make money.

And can governments justify auctioning mobile licences to make the 'efficient' price, while handing out licences to run TV services for practically nothing?

The Communications White Paper, expected on Tuesday, will treat the spectrum as a continuum of services from radio and TV to mobile telephony and wireless internet access.

There are five main factors to consider in assessing its value. Bandwidth capability, range, the necessity for 'line of sight', existing usage, and how that section of spectrum relates to international standards. The first three relate to the physics of the airwaves. The final two relate to government regulation.

The spectrum starts at low frequencies and increases: from short-wave radio to FM radio, then TV through to mobile phones, eventually reaching visible light. Higher-frequency waves are of higher energy and, broadly speaking, can carry more information. Until the Eighties no one thought existing mobile phone frequencies were usable.

'Over the past 20 years technology has allowed the exploitation of frequencies over 1GHz, as high as 40GHz,' says Stephen Pentland a partner at Spectrum Strategy Consultants. 'It's a bit like discovering a new oil field.'

But the increased capacity is traded off against the reach of signals. The lower the frequency the wider the reach of a signal. So, for example, because the frequency used for 3G is higher than for mobile phones, its reach is shorter, so more mobile phone masts will need to be built.

The last scientific consideration is the necessity for 'line of sight'. At frequencies above about 3GHz, signals can be received only if in a direct line from the transmitter. This is no good for mobile telephones, but works for receiving large amounts of data in a fixed place. Infra-red is of very high frequency, but requires perfect line of sight with no obstructions. Bluetooth, the successor technology, is of lower frequency and can transmit the same data around corners.

However, science is only part of the story. Existing regulations allocate existing parts of the spectrum to specific uses such as broadcasting. The division is considerably more detailed than depicted above. At the lower end, maritime frequencies are interspersed with low broadcast frequencies. At the high end, astronomers use many frequencies for radio telescopes. The entire spectrum is peppered with frequencies used by the military.

Under new Treasury accounting rules, Ministry of Defence budgets will be charged the annual cost of owning these frequencies. Together with a strategic review of military-owned spectrum, the signs point to a massive rationalisation of these frequencies.

Attractive slivers of demand are created by governments and by agreements reached by supranational organisations such as the International Telecoms Union and the EU. Indeed it was the Department of Trade and Industry that led the push for adopting the standard that has helped propel Europe to the forefront of mobile technologies.

Future technologies run hand in hand with these technological standards. In today's volatile markets investment is forthcoming only for technology that will achieve clear economies of scale by being suitable for a global market. 3G will be a global standard enabling, for example, European phones to be used in the US.

NTL, which carries a quarter of the UK's mobile traffic, 85 per cent of emergency services signals, and has been running fixed wireless services for four years, believes more spectrum should be freed up. 'In metropolitan areas a lot of this radio spectrum is full up,' says Garth Sumpter, Marketing manager at NTL Business. 'There is interference and congestion, especially at the lower end for simple everyday stuff.'

Extra bandwidth would allow taxi companies to transmit the address of a cab's next fare to a dashboard screen, or ambulance operators to transmit a patient's medical records to paramedics, says Sumpter.

The MoD rationalisation may make extra bandwidth available. The switch-off of the analogue TV signal is the other key event. This will free up a slice of spectrum double the size of that sold off in the 3G auction.

Can government keep up with this pace of technological change? If it can't, one answer would involve part-privatisation of the airwaves. For example, the spectrum could be allocated to private organisations, which could 'sublet' specific ranges. It would be a logistical nightmare to introduce, but may mark the endpoint of a process that begins with Tuesday's White Paper.