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April 18, 2005

Lecture: Organizing the spectrum: As Property

Online Class Reader: The Federal Communications Commission

Coase, R. (1959). The Federal Communications Commission. Journal of Law and Economics 2: 1-40. http://web.library.uiuc.edu/ereserves/item.asp?id=46837

Assignment: BLOG POST: Against licensing

In this article, Coase outlines a justification for assigning property rights in the electromagnetic spectrum. For this, Coase is often criticized (or demonized) by those who oppose selling spectrum as property.

Coase's 1959 article makes many of the critiques of US communication policy that are still heard a half century later. Coase wrote that "franchises worth millions of dollars have been created, have been bought and sold, and have served to enrich those to whom they were first granted." (32). He complained that the FCC is beholden to "politicians and businessmen (who often use methods of dubious propriety)" (35-36), he favorably quotes Caldwell (p. 9) who describes FCC license decisions as "in spirit pure censorship." He refers to profits made from station sales as "the benefits derived from [the] free use of public property" (23) and observes that "provision of a valuable resource without charge naturally raises the income of station operators" (22).

Among other things, Coase proposes to treat spectrum in a way more analogous to land. Assess his ideas in light of the complaints listed above. Is this proposal likely to address these complaints? It might help you to refer to the previous Streeter reading or the New America Foundation chart/reading that describes the current organization of the spectrum.

Post an answer in your blog that is at least 200 words. DEADLINE: 1 p.m. -- one hour before class begins.