18 January 2007

Spectrum ad Absurdum

Slate's "Press Box" columnist Jack Shafer pokes a few holes in the concept of spectrum scarcity which underlies the authority of the Federal Communications Commission (FCC) and makes the case for abolishing the agency:
Although today's FCC is nowhere near as controlling as earlier FCCs, it still treats the radio spectrum like a scarce resource that its bureaucrats must manage for the "public good," even though the government's scarcity argument has been a joke for half a century or longer. The almost uniformly accepted modern view is that information-carrying capacity of the airwaves isn't static, that capacity is a function of technology and design architecture that inventors and entrepreneurs throw at spectrum.

. . . .

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.

As I noted a couple of years back, the FCC itself has been steadily moving away from the concept of scarcity as a justification for some of its authority. Since the FCC v. Pacifica Foundation decision, the growing disconnect between traditional concepts of spectrum scarcity and the technical realities that many observers, Slate's Shafer included, have recognized have become apparent to many within the legal community.

The context of my earlier post was that the FCC's traditional "morality police" authority over broadcasters should not be extended to cable, satellite, and other types of broadcasting. I noted that these broadcasters make little use of the "scarce" spectrum and the opt-in nature of their service contrasts with the "pervasive" broadcasts the FCC has traditionally sought to control. Shafer takes that argument further, by questioning whether the Commission's existing authority is still justified. Ultimately, if spectrum scarcity was a somewhat dubious concept in 1934 and crumbled considerably over the past few decades, I believe that he (and others) may be right to suggest now that the FCC's entire raison d'ĂȘtre has essentially ceased to exist at all. Although Shafer's focus was somewhat different, we're on the same side of the argument.

What is most problematic about the FCC and similar "alphabet soup" agencies is that these tend to take on lives of their own and outlive the circumstances which led to their creations. It's worthwhile, then, to consider not just the origin of their authority but also the justification for that power, which may and often will change over time.

In the FCC's particular case, the basis for its authority is legislative -- it was established by the Communications Act of 1934 and empowered by Congress to administer a particular sphere of authority. The justification for its authority has changed, however. Its power to regulate new technologies and the broadcast industry flow from its authority to grant and revoke licenses, and authority allowed it by Congress because of the perceived scarcity of the spectrum. The Commission's authority over programming content is more tenuous and, as Pacifica and other changes made scarcity increasingly problematic as a basis for rule-making, the "pervasiveness" argument became the FCC's standard justification. Regardless, the legal basis for content regulation, as for technology oversight and broadcast controls, has its roots in the outdated concept of spectrum scarcity.

If spectrum scarcity is no longer a sufficient concern to maintain the current bureaucracy, where do we go from here? Shafer suggests privatization, to which I'm generally predisposed. Others might favor a drastically-revamped and reduced federal agency, but if so, what would that agency do? Take away spectrum regulation and the FCC is essentially just a mother hen for broadcast content; if that was an agency's sole function, would we support its mission?

Some communities are more concerned about and controlling of communications content, but as a nation, we've been generally cool toward the idea of a national morality overseer. Whether an agency could exercise that type of authority in isolation from another, more legitimate function like licensing of a scarce resource is questionable on First Amendment grounds, regardless whether it would be politically tenable.

Without a firm foundation in spectrum scarcity, the FCC as it currently exists is on shaky ground.

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