Spectrum Rights in the Telecosm to Come
136 Pages Posted: 27 Jan 2004
How access to radio frequencies should be controlled and what different control structures might mean for the development of wireless communications has been the subject of intense debate. Legal scholars and economists have proposed radical reformation of the current regime of spectrum regulation, and such reform is being considered at both the FCC and in Congress. The next few years will be critical in shaping the wireless world to come.
Despite the importance and timeliness of the debate over spectrum rights, the theoretical literature has not advanced beyond first principles. Many have written, in the tradition of Coase, in favor of exclusive property rights in spectrum. More recently, several scholars have countered that spectrum should be managed as a commons in which transmission rights are broadly shared, subject only to compliance with certain technical protocols. What has received little attention is the question of how spectrum disputes should be resolved the day after the revolution in spectrum management, whatever its character. Little consideration has been given to what legal structures and rules will be necessary, and to what extent even radical change in spectrum management will relieve decisionmakers of the public interest balancing the FCC undertakes today in distributing spectrum entitlements.
I consider these questions by first developing a framework for understanding different kinds of interference disputes among wireless operators. Then, focusing on the possibility of fee simple ownership in spectrum, I apply the insights of Calabresi's and Melamed's Cathedral and follow-on literature to the resolution of these interference disputes. I conclude that a nuisance-like common law, as applied to spectrum, will require its own public interest standard. Like the FCC, decisionmakers will have to balance efficiency and fairness goals in the pursuit of a particular kind of communications environment. I show, moreover, that the development of liability standards and nuisance remedies will be difficult and costly. The costs and indeterminacy of dispute resolution could be reduced, however, with the development of a hybrid approach that combines the strengths of regulation and the common law. Such an approach might involve defining categorical nuisances in spectrum and establishing presumptions as to the appropriate entitlements in different kinds of interference disputes.
The commons alternative to property rights will not eliminate all this complexity and uncertainty. In the wireless commons, as in the wireless subdivision, the resolution of interference disputes will require choices among various efficiency and fairness goals. Here too, judicious use of the regulatory function will be necessary to implement a mature legal structure for the telecosm to come. Whether a revolution in spectrum management is at hand or still far off, the administration of spectrum rights is changing. These changes should be undertaken with an eye to the private and common property rights of the future, and the efficient and fair resolution of spectrum disputes.
Keywords: spectrum, property and liability rules, administrative law, FCC, commons, property law, nuisance, administrative law, public interest, wireless, communications law and regulation
JEL Classification: K11, K23
Suggested Citation: Suggested Citation