The case for killing the FCC and selling off spectrum.

A classic example of FCC overprotection was the subject of my column yesterday: The FCC issued rules in 2000 that limited the number of potential lower-power FM stations to 2,300 when, according to Hazlett's calculations (PDF), the dial could accommodate 98,000 under the existing interference rules. (Congress overruled the FCC and passed a law that essentially limited the number of LPFM stations to about 1,300 and locked them out of the top 50 urban markets.)

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.

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The best sustained argument for the abolishment of the FCC can be found in Peter Huber's Law and Disorder in Cyberspace, which can be picked up for a song on Amazon. The piece you just read draws heavily from Huber, so I'm a little embarrassed I don't actually quote him anywhere. For the abolishment of Jack Shafer, send e-mail detailing your request to the Shafer regulators at slate.pressbox@gmail.com. They'll get back to you in a couple of years. (E-mail may be quoted by name unless the writer stipulates otherwise. Permanent disclosure: Slate is owned by the Washington Post Co.)

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