"Propertyzing" the Electromagnetic Spectrum: Why It's Important, and How to Begin

Abstract

The Radio Act of 1927 began a long reign -- 73 years so far -- of all-encompassing federal regulation of the electromagnetic spectrum -- "the airwaves". The Act declared that the spectrum was the property of the entire American people and that it should be managed by the Federal Government "in the public interest". The reality of that regulation has been a process in which, all too often, the Federal Communications Commission has discouraged competition, favored incumbents over entrants and innovators, delayed the development of new technologies, and generally mismanaged a scarce resource. There is a better way. That way would involve converting the use of the spectrum to a system of property and property rights, which would function much like the system of property that applies to real estate. The rights, limitations, and boundaries of spectrum ownership could be specified. All spectrum could then be bought and sold, divided or aggregated, put to any legitimate use, much like real estate, subject only to restrictions on interference (with other's use of their property) and to the application of general business laws, such as the antitrust laws. Property owners could use normal legal channels and procedures to protect their property against interference "trespass", just as is true for real estate. There would still be a role for the Federal Government in this system -- as the registrar of spectrum holdings (similar to land registries), as an owner of some of this property (parallel to the ownership by government of some real estate), and as the administrative agency that would deal with those instances of widespread interference that are not adequately handled through private enforcement (much as the Environmental Protection Agency is designed to deal with widespread "pollution" problems that involve real estate); but the principle of property would be at the center, as is true for real estate. Though one could design a perfect "starting from scratch" property system, such a startingover proposal would be unrealistic. But a good start could be made by immediately establishing property rights with respect to current spectrum allocations and then encouraging property owners to rationalize their holdings. The FCC should continue its current program of auctioning spectrum and easing restrictions on auctioned spectrum and should move aggressively to establish property rights. But Congressional action is ultimately necessary for the "propertyzing" of the spectrum.