Tragedy T.V.: Rights Fragmentation and the Junk Band Problem

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53 Ariz. L. Rev. 83 (2011).  Thomas W. Hazlett, Director, Information Economy Project, Professor of Law & Economics, George Mason University School of Law

Tragedy of the anticommons occurs when property rules fail to enable efficient social coordination. In radio spectrum, rights issued to airwave users have traditionally been severely truncated, leaving gains from trade unexploited. The social losses that Ronald Coase2 asserted, appealing to basic theories of resource allocation, are now revealed via intense under-utilization of the TV Band. Following the end of analog TV transmissions in June 2009, vast spectrum continues to be allocated to terrestrial broadcasting despite the fact that broadcast video delivery could inexpensively shift to cable and satellite. Making the TV Band (forty-nine channels spanning 294 MHz) available for new services is worth $107 billion to service providers (at 2008 auction prices) and at least ten times that in consumer welfare. Instead, U.S. regulators treat TV airwaves as a “junk band.” Analogizing to Wi-Fi radios accessing frequencies not allocated to exclusive licenses, the FCC seeks to permit government-approved devices to transmit in unoccupied TV Band “white spaces.” No radios have been approved, however, in eight years of rule makings, reflecting regulatory difficulty in weighing economic trade-offs.

 

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