A spectrum sensing method for cognitive radio to detect spectrum holes in an environment of bandwidth scarcity. The method comprises first receiving a wireless signal at a cognitive radio user, and then discovering the frequency edges of allocated frequency bands by using wavelet transform coefficients to detect discontinuities in the power spectral density of the received signal. After determining the allocated frequency bands, the method determines frequency band availability by detecting the in band energy using a bi-threshold energy detector, where the energy detector makes hard decisions and soft decisions. Finally, a fusion center combines hard and soft decisions collected from a cooperative spectrum sensing network of cognitive radio users and makes a final decision using a hybrid of data fusion and decision fusion to determine the final decision regarding spectrum availability.