Jesse Walker's Radio History Well then: What would the airwaves be like without licensing? Would we have Dunifer's self-regulated spectrum or the chaos described by government officials? The early 1920s, a period in which a substantial number of radio stations had gone on the air but before the Federal Radio Commission -- the FCC's predecessor -- was created by the Radio Act of 1927, provides some context.
Traditional histories of the period describe it as a time of radio gone ga-ga. The Department of Commerce handed out licenses without care for spectrum scarcity, the story goes, and the secretary of commerce (at the time, Herbert Hoover) was unable to hold the line against interference. Nineteen twenty-six ushered in what's been called the 'Breakdown of the Law' period, during which the airwaves degenerated into complete chaos. Then Congress created the Federal Radio Commission, which undertook the long-overdue task of reducing the number of licenses to fit the available spec trum.
Recent scholarship has shown this history to be almost entirely incorrect. Since Ronald Coase's classic Journal of Law and Economics article of 1959, 'The Federal Communications Commission,' most economists have recognized that a more rational solution to the problems of the 'Breakdown of the Law' period would have been to recognize property rights in the broadcast spectrum and treat interference, as Dunifer suggested to Spin, as a tort. Newer research -- notably, UC-Davis economist (and Reason contributing editor) Thomas Hazlett's 1990 article, 'The Rationality of U.S. Regulation of the Broadcast Spectrum,' also published in the Journal of Law and Economics -- has shown that such a property rights based order had in fact arisen in the '20s, without federal direction.
As soon as the Department of Commerce started handing out licenses, a 'priority in use' system of property rights spontaneously emerged, says Hazlett. Broadcasters homesteaded particular frequencies at particular times of the day (24-hour stations were rare then). Spectrum rights were freely tradable, and freely traded. Some areas adopted, without government prodding, the institution of 'silent night,' in which local broadcasters would shut down for an evening to allow listeners to tune in to long-distance signals. As the demand for licenses began to exceed supply, problems developed -- but they were being dealt with.
'Beginning in September 1921,' writes Hazlett, 'when the Commerce Department first recognized radio broadcasting as a distinct license category, the department initially allowed just a single frequency (360 meters, or 833.3 kHz) to be used for broadcasting, necessitating complicated time-sharing agreements. (What interference took place during this 192123 period was, in essence, an outcome of government control: over 500 broadcasters were 'responsibly' bunching up all at the same point on the spectrum to which they had been directed by the Commerce Department, and operations were not always perfectly synchronized.) When this single channel became scarce, Hoover denied new licenses. The Intercity decision [Hoover v. Intercity Radio Co.] in February 1923, growing out of just such a denial, determined that the secretary had no authority to withhold a license but did have the legal right to set hours of operation and frequencies.'
Meanwhile, established broadcasters, looking for protection against competition, wanted the government to limit the number of new licenses it would issue. They had a friend in Hoover. The groundwork for the 'Breakdown of the Law' was laid after the secretary decided, in November 1925, to stop issuing new licenses, arguing that the spectrum was completely filled. He invited a court challenge, and one arrived in April 1926: United States v. Zenith Radio Corp. Like Intercity, Zenith denied Hoover the right to withhold a license. Unlike Intercity, however, it denied him discretion over time and wavelength assignment.
Hoover did not appeal the case. Instead, he asked Acting Attorney General William Donovan which District Court decision to follow. On July 8, Donovan came out for Zenith and asserted that the government had no authority to define spectrum rights. 'Faced with open entry into a scarce resource pool, a classic 'tragedy of the commons' ensued,' writes Hazlett. 'Stations had to be li censed by the secretary of commerce; once licensed, they were free to roam the dial, select their own transmitting location, choose their desired amplification level, and set their own hours.' Hoover had created a crisis, and Congress quickly created the Federal Radio Commission to deal with it.
At the same time, non-regulatory solutions were ignored. In November 1926, for instance, WGN had sued the Oak Leaves Radio Station, claiming that the latter had essentially committed trespass by interfering with its signal. The court ruled in WGN's favor, explicitly basing its decision on homesteaded property rights. But the commission had no use for this approach.
Nor did it have any use for expanding the spectrum to allow more stations to broadcast. This was technically feasible but politically unpalatable to the big broadcasters, who preferred to make room by eliminating their smaller competitors. The industry defeated spectrum expansion by arguing it would require listeners to buy expensive new sets to hear the additional stations. That this might be preferable from a consumer's point of view to not being able to hear the other stations at all was not considered.
In August 1928, the commission announced General Order 40, its spectrum reallocation plan. The effect, as University of Wisconsin historian Robert McChesney argues in his 1993 book Telecommunications, Mass Media, and Democracy, was to eliminate most nonprofit stations (about a third of the 1920s radio market) and to nurture the networks. The commission favored 'general public service' stations over 'propaganda' stations, the latter defined, in McChesney's words, as broadcasters 'more interested in spreading their particular viewpoint than in reaching the [broadest] possible audience with whatever programming was most attractive.'
Inaugurating a line of thought to which the FCC still hews, the commission argued that there simply wasn't enough 'room in the broadcast band for every school of thought, religious, political, social, and economic, each to have its separate broadcasting station, its mouthpiece in the ether.' While this wasn't necessarily true, it nonetheless helped the commission fulfill the big broadcasters' agenda. The National Association of Broadcasters, the commercial stations' trade association, was effectively under the control of the two major networks (CBS and NBC), and a revolving-door relationship between the association and the commission was firmly in place. Many commissioners went on to lucrative positions at the networks or the NAB.
In short, the system of the early 1920s was not chaotic. When chaos did arrive, it was induced by government policy, not market failure. Alternatives to regulatory control were ignored. And from the very beginning, broadcast regulation did more to protect established interests and limit programming variety than it did to stave off disorder and protect consumers.
| blog | essays | quotes |
definitions |
|
Email:
www
@
bkMarcus
.
com
|
||||