Broadcast Spectrum Bill Raises Property Rights Concerns

Published May 31, 2016

U.S. Sen. John D. Rockefeller (D-WV) has introduced a bill that would direct the Federal Communications Commission to proceed with its plans to auction off unused broadcast spectrum. The plan would free up 10 megahertz the FCC says it needs to implement a national public safety network.
Rockefeller’s Public Safety Spectrum and Wireless Innovation Act seeks to allay concerns expressed by broadcasters earlier this year when FCC Chairman Julius Genachowski introduced the commission’s National Broadband Plan. Broadcasters feared the plan would empower the FCC to seize spectrum in much the same way governments employ eminent domain to take land on which to build highways and bridges.
Although Rockefeller’s bill specifically prevents the FCC from taking such actions, industry analyst Ryan Radia  of the Competitive Enterprise Institute expressed his concern the bill nonetheless usurps private property rights of broadcasters.
“Normally, property is sold, leased, and transferred,” Radia said. “But in the case of spectrum, we are still treating it the same way we did in the 1950s when TV broadcasting was brand-new. We need property rights in spectrum rather than government control.”
Bad Track Record
The bill would allow current broadcast owners voluntarily to give spectrum to the FCC in exchange for a portion of the proceeds from revenues generated by the auction. The remainder of the auction proceeds would be applied to buildout of the public safety network.
The bill, introduced in August, also allows public safety officers to lease unused portions of the bandwidth back to private companies such as AT&T and Verizon. That raises a red flag for Radia.
“I am concerned about the bill because it would stop the FCC from auctioning 10 megahertz of spectrum to a company, instead giving that spectrum to public safety,” said Radia. “Based on the track record of government agencies using spectrum, we should be very concerned when the FCC significantly allows them more spectrum than they already have. Government agencies at all levels occupy far too much a share of spectrum already, and unlike the private sector, they don’t have to bear the economic costs of using that spectrum.”

Radia argues the government is inherently incapable of operating broadcast spectrum effectively and that it should find solutions by encouraging free enterprise. “A better way would be for public agencies to purchase service from companies offering it. Police buy police cars from Ford and Chevy and walkie-talkies. Why can’t they buy their communications platforms from companies that have licensed spectrums? That is a way to ensure public safety officials have enough spectrum to do their jobs.”
‘Need to Downsize’ FCC Role
Radia says the Rockefeller bill and proposed auction would hurt “wireless companies like T-Mobile that might otherwise be bidding on this spectrum. Politicians talk all the time about improving competition on broadband and the wireless space, but what Rockefeller is proposing has the opposite effect.”
Radia says spectrum ought to be viewed as property, following the Constitution’s property precedents. “These battles over spectrum should not be occurring in Washington,” he said. “They should be occurring in cities across the country where firms are competing to deliver the most vital services to consumers.
“We need to downsize the FCC’s role in overseeing spectrum allocation beyond enforcing private arrangements. There is little role for government in managing the spectrum, because the task could be better performed by competing firms which have the incentive to maximize consumer welfare and services consumers demand.”
Krystle Russin ([email protected]) writes from Texas.