SNEP: A Spectrum Solution

In Setting National Economic Priorities, the three problem areas are

1. Impediments to labor supply and demand
2. Anachronistic regulatory environment relative to technological change
3. Unsustainable fiscal path

Under (2), there is the problem of the FCC and spectrum. Many years ago, Coase argued that spectrum could be allocated using property rights, rather than command and control. The path of technology since then has made his ideas both more feasible and increasingly desirable.

I view the FCC as both structurally and culturally unable to move decisively away from command and control. Accordingly, my proposal would be to take spectrum regulation out of the hands of the FCC. Instead, I would transfer responsibility to a new agency, which might be called the Spectrum Property Rights Resolution Authority. All spectrum licenses would immediately convert to property rights. The owners of a particular band in a particular location could determine its use. The Resolution Authority would define these property rights more precisely. It also would provide mechanisms for settling conflicts among spectrum rights owners and resolving disputes between spectrum rights owners and device manufacturers.

Another problem is that some spectrum bands are reserved for government agencies, which proceed to waste spectrum by holding onto more than they need or by using obsolete equipment. I would propose privatizing this spectrum, and then having the government lease back what it needs. A Government Spectrum Leasing Corporation should be chartered for that purpose. This is similar to the Government Services Administration, which leases government buildings. The spectrum leasing corporation would be encouraged to upgrade the equipment used by government agencies, in order to economize on spectrum leasing.

Neither of these proposals is particularly original, by the way.

5 thoughts on “SNEP: A Spectrum Solution

  1. Why not auction off property rights to bits of the spectrum at the expiration of current licenses? Seems fairer and better for the public purse than just converting licenses into property rights without compensation.

  2. Can there be such a concept as SNEP without there being an accompanying (if not preceding) something like Setting National Social Objectives?

    If we turn to that course of SNSO what is the likely impact on individual freedom in setting personal objectives?

  3. I blame the FCC for the great depression actually. From Wiki:

    “Prior to 1927, radio was regulated by the United States Department of Commerce. Commerce Secretary Herbert Hoover played a strong role in shaping radio. His powers were limited by federal court decisions, however; in particular, he was not allowed to deny broadcasting licenses to anyone who wanted one. The result was that many people perceived the airwaves to suffer from “chaos,” with too many stations trying to be heard on too few frequencies. Others believed the government simply wanted to control content. (Initially only two frequencies were available for broadcasting with one of these being reserved for “Crop reports and weather forecasts.”) After several failed attempts to rectify this situation, Congress finally passed the Radio Act of 1927, which transferred most of the responsibility for radio to a newly created Federal Radio Commission. (Some technical duties remained the responsibility of the Radio Division of the Department of Commerce.)”
    ——–

    This caused the great depression. Broadcasting need chaos for another few years. Once Hoover made this blunder, the network broadcasters agglomeratated and transportation was no match, downtowns everywhere clogged immediately after the big networks set up shop.

  4. I’m sympathetic, but note that spectrum is permanently finite. If a monopolist buys all the spectrum, then the price of spectrum will sky rocket, but nobody will be able to step in and meet that demand. I would think this is a case where anti-trust activity by the FCC really does make sense.

    Improved technology can make the spectrum go further, but you can only change the protocols on a given band of spectrum if everyone on that spectrum agrees to the change. Thus again, there seems to be a helpful role for a regulator: to specify the allowable protocols on each band of spectrum.

    • I agree with the need for antitrust activity, but that is not what the FCC is for

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