The Wall Street Journal-20080123-Eagle Should Follow Kiwi In Spectrum Allocation
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Eagle Should Follow Kiwi In Spectrum Allocation
Your editorial "Martin's Frontline Folly" (Jan. 14) succinctly explains the problems faced by a bureaucratic FCC's attempt to regulate increasingly valuable airwaves. Although many public-private partnerships disappoint, they hardly ever fail as spectacularly as Frontline did. The airwaves are too scarce a commodity to be so consistently mishandled.
The FCC centrally plans and allocates airwaves, pandering to bureaucrats instead of consumers. The result of this is the Frontline debacle. New Zealand largely removed bureaucratic controls when it auctioned off the airwaves in 1989, and the effects were dramatic. The U.S. can improve upon the Kiwis by auctioning off not just management rights, but full transferable property rights for the airwaves.
Ronald Coase, Nobel laureate in economics, argued that auctioning the airwaves is not only easy and profitable, but the only rational way to allocate scarce spectrum to its most highly valued uses. He was mocked then, but he eventually proved his detractors wrong. To our detriment, the FCC still mocks Mr. Coase.
Alex Nowrasteh
Research Associate
Competitive Enterprise Institute
Washington
