How the Traditional Property Rights Model Informs the Television Broadcasting Spectrum Rationalization Challenge
42 Pages Posted: 10 Nov 2011 Last revised: 13 Apr 2012
Date Written: February 2012
This paper examines the prospective role of zoning rights and eminent domain in the FCC’s challenge of reallocating underutilized television broadcast spectrum for use in significantly higher value mobile broadband applications. The government must reallocate the spectrum in an economically and legally efficient manner, balancing the interests of the politically powerful broadcasters and those of society as a whole. Recently, the government has decided to explore ways to incentivize the broadcasters to voluntarily return their spectrum licenses. From a strictly legal perspective, the broadcasters have a relatively weak claim to property rights. However, the government, has indicated it seeks an incentivized voluntary return of spectrum by the broadcasters. The government’s plan to take the broadcasters’ spectrum voluntarily, rather than involuntarily, suggests that the government intends to effectively treat the broadcasters as though they have certain property rights to their spectrum licenses – specifically the right to control possession. Given the government’s de facto recognition of elements of property rights of the broadcasters, the twin theories of zoning and eminent domain can inform a mutually acceptable solution between the government and the broadcasters. These traditional property rights theories suggest that a payment to the broadcasters, some continued retransmission guarantees and cable or satellite subscription subsidies to affected viewers, totaling of $0.10 to $0.19 per Mhz/POP would likely to be fair to all parties. In addition, the threat of “down zoning” the television broadcasters’ rights incentivizes the broadcasters to accept an equitable offer put forth by the government. The government would be able to auction the spectrum for $1.02 to $1.22 per Mhz/POP a net profit of approximately $28.5 to $38.3 billion.
Keywords: FCC, spectrum, eminent domain, communication, broadcasting, zoning
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