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. From Shouldn’t FCC Rules Over Indecency Just Grow Up? Reflections on Free Speech and Converging Media

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. From Shouldn’t FCC Rules Over Indecency Just Grow Up? Reflections on Free Speech and Converging Media

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

Event Details:

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 iep.gmu@gmail.com

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

William Webb, Head of Research and Development at OFCOM, to speak about ‘The Theory, Practice, Politics and Problems of Spectrum Reform’ on November 12

ARLINGTON, VA., October 23 – With the transition to digital television in the United States less than four months away, disputes about the airwaves used by broadcasters are raging here and around the globe.  A world-class expert will soon weigh in on how one country, the United Kingdom, views the challenges of bringing radio spectrum allocation into the 21st Century.

On Wednesday, November 12, 2008, the Information Economy Project at the George Mason University School of Law 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, “The Theory, Practice, Politics and Problems of Spectrum Reform,” will offer a timely progress report for the American audience.

Webb’s lecture will be the sixth in a prestigious series that has included Nobel Laureate Vernon Smith and noted economist David Porter on how FCC license auctions have worked; Martin Cooper, the “father of the cellphone,” on spectrum allocation; Brian Lamb, founder and CEO of C-SPAN, on the policies that enabled the cable network to launch;  former Federal Communications Commission Chairman Dennis Patrick, on the decision to abolish the “Fairness Doctrine” in 1987; and University of Minnesota Professor Andrew Odlyzko, on financial bubbles in high-technology industries.

Dr. Webb’s Lecture will review the century-long history of radio spectrum regulation. For almost all of that century, the policy-maker has micro-managed spectrum use, defining services, technologies and business models deployed by wireless operators. The inefficiencies embedded in this approach have triggered calls for liberalization since the pioneering work of economist Ronald Coase in the 1950s.

While efforts to relax administrative control have generally met great political resistance, some substantial progress has been made with the emergence of mobile telephone networks over the past two decades.  Policy makers in some nations are now seeking to achieve bolder changes. The regulator in the United Kingdom, OFCOM, has emerged as a leader in this campaign.

After the Labour Government commissioned a landmark 2002 study authored by economist Martin Cave, OFCOM moved aggressively to assist the emergence of property rights in frequencies, the institutional switch enabling market allocation of radio spectrum.

This lecture, delivered by a key OFCOM policy official and a noted spectrum technology expert in his own right, dissects the liberalization process in Great Britain and offers lessons learned. This experience promises great insight for the U.S. and other countries struggling to enact pro-consumer policy reforms.

More information about the lecture, and about the Information Economy Project, is available at http://iep.gmu.edu

Event Details:

Where: George Mason University School of Law, Room 120, 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 iep.gmu@gmail.com

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

Over at DrewClark.com, earlier today I reported today that television networks – which in recent years have had a strained relationship with local broadcasters on a variety of fronts – joined with the National Association of Broadcasters in calling for a time out on the politically simmering issue of “white spaces.” Here’s the start of the story, and you can read the full post at DrewClark.com

WASHINGTON, October 23 – The top executives of the four major broadcast networks on Thursday urged the head of the Federal Communications Commission to delay a vote on a politically simmering issue that pits broadcasters against Google and high-tech executives.

In the letter, the CEOs of CBS Corp., NBC Universal and Walt Disney, and the chief operating officer of News Corp., urge that the FCC exercise caution before taking irreparable action with regard to the vacant television channels known as “white spaces.”

Google and the other technology executives, including Microsoft, Motorola, Philips and others, want the FCC to authorize electronic devices that capable of transmitting internet signals over vacant television bands.

The network executives – CBS’s Leslie Moonves, Disney’s Robert Iger, NBC’s Jeffrey Zucker and Peter Chernin of News Corp. – want a time out.

They join their local broadcasting colleagues, as well as manufacturers and users of wireless microphones, like the National Football League and Boadway theater owners, who have been actively lobbying the issue.

[…]

Read the rest of the story at my blog, DrewClark.com – The Politics of Telecom, Media and Technology

Note: Here’s a second post I just put live at DrewClark.com. It refers to an upcoming conference, on Friday, October 3, sponsored by the Information Economy Project at George Mason University School of Law. It will be held at 8:30 a.m. at the National Press Club. Registration details are below.

In the United States, the regulation of broadcast radio and television has always been done under a different standard than the regulation of the print medium.

As Secretary of Commerce in the administration of President Calvin Coolidge, Herbert Hoover declared: “The ether is a public medium, and its use must be for a public benefit,” he said at the Fourth National Radio Conference, in 1925. “The dominant element for consideration in the radio field is, and always will be, the great body of the listening public, millions in number, country-wide in distribution.”

When Congress created the Federal Radio Commission in 1927, it decreed that broadcasting was to serve the “public interest, convenience and necessity,” and this standard was re-affirmed in the Communications Act of 1934. Several Supreme Court decisions — albeit decisions that have been much criticized — affirmed that broadcasting could and should be treated differently than the traditional “press.”

This differential treatment for broadcasting — versus the print medium, and also cable television — was underscored by the decisions in Red Lion Broadcasting Co. v. FCC (1969), which upheld the “Fairness Doctrine,” and also FCC v. Pacifica Foundation (1978), which upheld indecency rules for over-the-air broadcast television. The Fairness Doctrine required broadcasters to grant reply time to those who said their views were criticized.

The Fairness Doctrine upheld in Red Lion was premised on the notion that electromagnetic frequencies, being “scarce,” needed to be rationed through a government-granted license. (It took economist Ronald Coase to note that airwaves are no more scarce than pulp and printing presses.) Station owners were thus periodically licensed as “public trustees” and obligated to either air different points of view, or return their spectrum.

Hence the nascent broadcasting medium was never allowed to develop with the full panoply of First Amendment protections for opinion, commentary, and outright partisanship, as were newspapers. The Pacifica decision underscored this result, holding that George Carlin’s “Filthy Words” monologue, even though not obscene, could be banned by the Federal Communications Commission.

President Ronald Reagan took a dim view of broadcasting’s “specialness.” In the memorable words of his FCC Chairman, Mark Fowler, television is “just another appliance — it’s a toaster with pictures.” Fowler and his successor, Dennis Patrick, worked together with the D.C. Circuit Court of Appeals and finally killed the Fairness Doctrine in 1987. They argued that it chilled free speech, and the appeals court agreed that the agency was entitled to drop the doctrine. Notwithstanding two congressional pushes to overturn the FCC — vetoed by Presidents Reagan and the first President Bush — the Fairness Doctrine was never re-instituted.

But the issue of what else, specifically, broadcasters were required to do to fulfill their public interest obligations came to a head under President Clinton and FCC Chairman Reed Hundt. Hundt pushed for the imposition of a mandatory three hours a week of children’s television – a requirement contemplated by the Children’s Television Act of 1990.

The rise of digital television also complicated this inquiry. As I discussed in my blog post earlier today, “Do TV Broadcasters Have Obligations to the Public,” Congress chartered an advisory committee to consider this question. As part of the Telecom Act of 1996, Congress paved the way for a new allocation of radio-frequencies so that broadcasters could also transmit their signals digitally. But it also specifically inserted language in the act, stating:

Nothing in this section shall be construed as relieving a television broadcasting station from its obligation to serve the public interest, convenience, and necessity. In the [FCC’s] review of any application for renewal of a broadcast license for a television station that provides ancillary or supplementary services, the television licensee shall establish that all of its program services on the existing or advanced television spectrum are in the public interest.

But it would take a commission — specifically, the Advisory Committee on the Public Interest Obligations of Digital Television Broadcasters (“Gore Commission”) — to sort through and analyze those specific obligations.

Next post: What Were the Gore Commission’s Findings, and How Do they Apply to the Video Future?

Resources:

• “Charting the Digital Broadcasting Future,” the final report of the Advisory Committee on the Public Interest Obligations of Digital Television Broadcasters” [PDF]
• “Citizen’s Guide to the Public Interest Obligations of Digital Television Broadcasters“, Benton Foundation.

Conference Program:

A mini-conference • Friday, October 3, 2008, 8:30 a.m.The Gore Commission, 10 Years Later: Th e Public Interest Obligations of Digital TV Broadcasters in Perfect Hindsight

A mini-conference • Friday, October 3, 2008, 8:30 a.m. National Press Club, 529 14th St. NW, 13th Floor, Washington, DC

Note: Here’s a post I just put live at DrewClark.com. It refers to an upcoming conference that might be of interest to Tech Liberation readers. Make sure to follow the link to the bottom of the post for registration information for this FREE conference, to be held tomorrow, Friday, October 3, at 8:30 a.m.

If all goes according to plan, on February 17, 2009, television broadcasters will power down their analog transmitters. They will be broadcasting their signal only digitally.

After more than 20 years in the long transition to digital television, this might be considered progress. Now, millions of Americans are collecting vouchers from the Commerce Department to subsidize their purchase of converter boxes. These are the electronic devices that take the digital signals — and convert them back to analog — so that viewers without high-definition televisions can watch broadcast TV on their old sets.

What about the bigger questions? Is there any benefit to the public, or to consumers, from the transition to digital television? What about the vaunted visions of hundreds of broadcast channels, through multi-casting? What would be the new public-interest obligations, if any, of broadcasters? This question has definitely not been resolved.

It may come back to this question: what was the point of making this move to digital and high-definition television? I recounted some of this history in “Spectrum Wars,” a 2005 article in National Journal magazine:

[The National Association of Broadcasters] seized upon a new technology out of Japan called high-definition TV. Compared with the 45-year-old U.S. standard, the sharper, high-resolution images used twice as many lines on a television screen, and broadcasting a program required two television channels instead of one. For broadcasters, that was just the point: High-definition gave them a way to fend off the FCC’s effort to grab frequencies back and turn them over to other uses. The broadcasters lobbied the agency to postpone the spectrum reallocation [currently being considered for cellular telephones] and to study the new technology. The NAB worked its magic on Capitol Hill, inviting Japanese broadcaster NHK to Washington and rolling big-screen Sony TVs into a hearing in the Senate Caucus Room. Fear of Japanese competition was at fever pitch in Washington. Congress was stunned by the picture quality and frenzied at the prospect that the Japanese would outflank American manufacturers of televisions, just as they had done to the makers of videocassette recorders. Rep. Ed Markey, D-Mass., then-chairman of the House Commerce Telecommunications Subcommittee, took up their cause, and Congress pressured the FCC to leave the spectrum assignments alone on the condition that broadcasters develop HDTV. […] But there was still a problem. Existing TV broadcasting equipment could not send digital signals, and existing analog television sets couldn’t receive digital signals. Broadcasters would have to invest in new television cameras and towers for digital signals, and consumers would have to spend thousands of dollars apiece on new sets. During the transitional period, each broadcaster would need two channels, one for analog and one for digital. Broadcasters turned to Congress, now in Republican hands, and lobbied for a new compact: We’ll give you HDTV if you give us a second channel, for free, until Americans have made the switch. “It was understood that the channels would be loaned for a period of years to prevent consumers from losing television,” said Robert Seidel, vice president of engineering for CBS Broadcasting.

Congress initially approved a transition to digital in 1997, setting year-end 2006 as the target transition date. But a loophole rendered the 2006 irrelevant until congress revisited the issue and, on February 1, 2006, fixed February 2009 as the end-date for the transition.

In the intervening decade, the question of broadcasters’ public interest obligations has been intermittently revived. Most significantly, as a result of the 1996 Telecommunications Act, an Advisory Committee on Public Interest Obligations of Digital Television Broadcasters was created. It became popularly known as the “Gore Commission.”

Unlike other modes of communications, broadcasters are regulated as a “public trustee.” This means that they must meet certain obligations — by airing children’s television, or by including coverage of civic and political events, for example — that are not required of their counterparts on cable or the print medium.

At the time of the Gore Commission, one voice in the debate was Henry Geller, a former FCC general counsel who has continued to work on broadband matters as a private citizen. He was an FCC attorney before rising to general counsel in 1964-1970, later serving as an assistant to FCC Chairman Dean Burch, from 1970-1974, and then becoming the head of the National Telecommunications and Information Administration under President Carter, from 1978-1981.

In a 2000 hearing on the subject before Congress, Geller suggested the following (reprinted in Current magazine):

I urge you to consider the following: Scrap the public trustee content scheme, and treat broadcasting like its main rival, cable, which pays up to 5 percent of gross revenues for use of the public streets for cable rights-of-way (significantly, the public makes little or no distinction between cable and broadcast channels). By taking some modest fee from commercial broadcasters for their use of the public spectrum in lieu of the public trustee obligation, noncommercial television could be adequately funded to deliver high-quality public service programming. The objective is to obtain such programming, but since the government soundly cannot review for quality, we are dependent upon the broadcaster to present the high-quality public service programs. The noncommercial system has demonstrated that it will strive to do so; the commercial system, under fierce and growing competition, has no such history or incentive.

Geller instead suggested a 1 percent spectrum fee on gross advertising revenues, netting about $250 million at the time, and going to fund educational programming on public television

Geller also argued, with respect to political content:

There is one other recommendation to Congress—affording free time to candidates as an important part of campaign finance reform. The details of such an effort are of course to be fashioned by Congress. Since it would obligate broadcasters to allocate a relatively large amount of air time every two years (or perhaps issue vouchers for purchase of that air time), the free time provision, along with the above 1 percent figure in the educational field, would constitute the full broadcaster contribution in lieu of its present public trustee obligation. This would be a meritorious conclusion, because an educated and informed electorate is so vital to the proper functioning of our democracy.

Geller, together with two officials involved in the Gore Commission — Norman Ornstein and Gigi Sohn — will present their reflections at a forum TOMORROW, on Friday, October 3: “The Gore Commission, 10 Years Later: The Public Interest Obligations of Digital TV Broadcasters in Perfect Hindsight.” The event, to be held beginning at 8:30 a.m. at the National Press Club, will feature is sponsored by the Information Economy Project at George Mason University School of Law, of which I am the assistant director. The full program is available at http://iep.gmu.edu. Admission to the event is free and open to the public. To reserve your spot, please email Drew Clark at: iep.gmu@gmail.com.

Later today, I’ll be returning to this theme with two more blog entries in this spot:

• What Did the Gore Commission Accomplish?
• How Do the Gore Commission’s Finding Apply to Our Video Future?

Conference Program:

A mini-conference • Friday, October 3, 2008, 8:30 a.m.The Gore Commission, 10 Years Later: Th e Public Interest Obligations of Digital TV Broadcasters in Perfect Hindsight

A mini-conference • Friday, October 3, 2008, 8:30 a.m. National Press Club, 529 14th St. NW, 13th Floor, Washington, DC