What’s the right way to allocate the airwaves? For years and years and years, the governing policy of federal communications was that the electro-magnetic spectrum was too “scarce” to be left to the devices of the marketplace. This kind of reasoning has always lacked substance. As I wrote in a piece occoccasioned by the rise of indecency enforcement:
Congress began regulating broadcasters in 1927 on the grounds of scarcity. In return for free and exclusive use of a given wavelength, broadcasters agreed to serve the “public interest, convenience, and necessity” — or at least to do what Congress and the FCC ordered. One element of this agreement was a ban on obscene, indecent and profane language.
This scarcity theory has always lacked substance. Nobel Prize-winning economist Ronald Coase’s reputation is based, in part, on a notable paper he wrote in 1959 that criticized the rationale behind the FCC’s command and control regime of licensing broadcasters. “It is a commonplace of economics that almost all resources in the economic system (and not simply radio and television frequencies) are limited in amount and scarce, in that people would like to use more than exists,” Coase argued in his seminal essay.
The FCC eventually came to realize that it could endow electromagnetic frequencies with property rights-like characteristics. In 1993, under Bill Clinton and a Democratic congress, the United States finally moved to such a system — at least in those frequencies used by cell-phone operators. As in so many other ways, broadcasters have remained immune from historical trends.
This backdrop is important to understand our current moment in wireless policy. Tomorrow, on Wednesday, November 12, at 4 p.m., those near Washington will be able to gain insight into how other nations have approached radio frequency regulation. The Information Economy Project at the George Mason University School of Law (Disclosure: I’m the Assistant Director at the Information Economy Project, a part-time position that I currently hold) will host its next “Big Ideas About Information Lecture” featuring an address by Dr. William Webb, a top policy maker at OFCOM, the U.K. telecommunications regulator.
OFCOM’s ambitious liberalization strategy, announced in 2004, permits the large majority of valuable frequencies to be used freely by competitive licensees, offering an exciting and informative experiment in public policy. Dr. Webb’s lecture, “Spectrum Reform: A U.K. Regulator’s Perspective,” will offer a timely progress report for the American audience.
Returning to my piece about the oddity of broadcast regulation for a moment:
But now technology has created new electromagnetic spectrum. Higher wavelengths than those used by traditional radio and television systems have been pressed into service for digital cellular telephones, wireless data connections, and satellite television and radios. The XM and Sirius satellite radio companies each offer hundreds of channels with less spectrum than all FM radio broadcasters combined. And cellular carriers now pack thousands of conversations on a channel that once served a single voice conversation.
Nonetheless, “scarcity” remains the foundation of a bifurcated jurisprudence. Newspapers, magazines, books and the Internet enjoy expansive First Amendment protections. Radio and broadcast television, defined as “public” properties, do not.
The Supreme Court accepted the scarcity theory in a 1943 case, when it upheld the FCC’s power to grant or deny privileges to electronic speakers. In 1969, the court went further, ruling in Red Lion v. FCC that scarcity required a Pennsylvania radio station to give free reply time to an author whose book was criticized over the air. Thus, the “Fairness Doctrine” was affirmed.
Although “Fairness Doctrine” is dead, the legal rationale for regulating broadcasting differently from newspapers, magazines, books and the internet lives on.
Most people involved in this debate see that the “scarcity doctrine” was always a fallacy. But should something else take its place? Are there other reasons that government should refuse to license airwaves as private property — such as, for example, a perceived need to devote them to “white spaces” for wireless communications devices? This important debate is by no means settled, and I hope that all who are interested in the subject will RSVP and attend tomorrow’s event.
More information about the lecture, and about the Information Economy Project, is available at http://iep.gmu.edu
Where: George Mason University School of Law, Room 121, 3301 Fairfax Drive, Arlington, VA 22201 (Orange Line: Virginia Square-GMU Metro).
When: Wednesday, November 12, 2008, 4 – 5:30 p.m., reception to follow.
Admission is free, but seating is limited. Because of construction, parking is tight. See http://www.law.gmu.edu/geninfo/parking.
The event is free and open to the public, but reservations are requested. To reserve a spot, please e-mail Drew Clark at firstname.lastname@example.org
About the Information Economy Project:
The Information Economy Project at George Mason University sits at the intersection of academic research and public policy, producing peer-reviewed scholarly research, as well as hosting conferences and lectures with prominent thinkers in the Information Economy. The project brings the discipline of law and economics to telecommunications policy. More information about the project is available at http://iep.gmu.edu