What lessons can be learned for spectrum policy from the management of other natural resources? Here, an expert on resource management says good governance depends on a transparent, rules-based approach that will minimise regulatory uncertainty. This stability is key to encouraging the necessary investment in networks.
On the 80th anniversary of the Communications Act, the November 2014 issue of The Review of Industrial Organization looks back at the landmark legislation and ahead to the future of broadcast regulation. The journal features an article by Thomas W. Hazlett, “The Rationality of U.S. Regulation of the Broadcast Spectrum in the 1934 Communications Act.”
Thomas W. Hazlett,
H.H. Macaulay Endowed Professor of Economics
Review of Industrial Organization
Volume 45, Issue 3 (November 2014), 203-220
© Springer Science+Business Media New York 2014
Published on-line: August 27, 2014
Hazlett’s paper is available here:
Download PDF (367 KB)
Here is the abstract:
The Federal Radio Commission regulated radio broadcasting, 1927–1934. With the passage of the Communications Act of 1934, the 1927 Radio Act (enabling the Commission) was re-enacted in whole. This congressional endorsement yields key evidence as to what policy outcomes were intended, differentiating competing theories for the origins of spectrum allocation law: Coase (J Law Econ 2(1):1–40, 1959), emphasizing policy error; Hazlett (J Law Econ 33:133–175, 1990), focusing on “franchise rents” in a public choice framework; and the “public interest” hypothesis, reconstructed by Moss and Fein (J Policy Hist 15(4):389–416, 2003). Congress’ revealed preferences prove consistent with the franchise rents theory, while contradicting the other two.