Property in Spectrum

Jack Shafer has an interesting article on Slate about using property rules to allocate broadcast spectrum.  An excerpt:

Technology alone can't bring the spectrum feast to entrepreneurs and consumers. More capitalism—not less—charts the path to abundance. Hazlett and others, going back to economist Ronald H. Coase in 1959, have advocated the establishment of spectrum property rights and would leave it to the market to reallocate the airwaves to the highest bidders. Such a price system would tend to encourage the further expansion of spectrum capacity.

Owners would be allowed to repurpose the spectrum they owned—using, say, AM radio frequencies to carry pictures—as long as they didn't interfere with the spectrum of others. Companies in control of spectrum would even be free to subdivide their frequencies and rent it out to customers by the minute for the broadcast and reception of data.

If that last example sounds too weird for words, think of it this way: You rent a chunk of subdivided spectrum every time you make or take a cell phone call.

Ben Barros

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