All About Coase (and sidewalks, apparently)
Lawrence Lessig and
Thomas Hazlett organized a
conference on Spectrum Policy, which was last weekend. The conference focused on whether spectrum should be auctioned off as property or instead opened up as a commons (like the 2.4GHz spectrum that is used for microwaves, cordless phones, and, most importantly, WiFi).
I would have loved to have been there, but at least was able to read Cory Doctorow's
great blogging live from the conference,
all day long.
And on,
and on,
and...
I recommend reading it all if you have the time and interest, and especially the
Moot Court, which was focused around "What Would Coase Have Done?" and whose judges included
Vernon Smith, my
favorite economist.
It's a very complex issue with no easy answers. At this point, I think I have to side with
Yochai Benkler, who
suggests trying both for ten years (split the spectrum, make half a commons and half property, maybe with 10 year leases) and then re-evaluate.
There appears to have been widespread agreement that we need to get the FCC out of the business of regulating speech ASAP. This is good news. Of course, ultimately Congress needs to be convinced as well, and the broadcasters, etc. are a bit more focused on Congress than on the conference participants.
One analogy that came up and was repeated a few times was the necessity of commons to make private property valuable. The specific example was that free sidewalks and roads are necessary for private homes to be valuable (actually it was phrased as "privatize the sidewalks and roads and private home ownership becomes untenable.").
I disagree with this statement not only in theory but also in practice - there are increasingly large numbers of private developments where the roads and sidewalks are privately owned, perhaps by the home owners, perhaps not. In many areas, this seems to increase the value of the homes.
Now, spectrum, as Lessig emphasizes in the moot court, is not comparable to a house or to any sort of physical private property. Therefore, the success of privatization in this area does not necessarily indicate anything one way or the other about what would be the optimal system for spectrum allocation, particularly considering the speech implications of spectrum policy. But the home/sidewalk/road analogy should be discarded.
Posted by Stephen Bronstein at March 6, 2003 04:01 PM