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Hazlett FCC Proposal Cited in New York Times Article

A detailed proposal on the potential benefits of television spectrum auction made to the Federal Communications Commission (FCC) by Professor Thomas Hazlett was the topic of a New York Times Economic View article.

Hazlett calculates that selling off this highly valuable portion of the spectrum could raise a minimum of $100 billion for the government and create roughly $1 trillion worth of value to users of the resulting services, which would include ultrahigh-speed wireless Internet access, improved cell phone coverage, and fewer cell towers. Hazlett also maintains that the increased spectrum availability would spur technological advances as yet unimagined.

Over-the-air television broadcasts utilize only 17 percent of the spectrum allocated to them because of the need to prevent interference among stations, thereby resulting in significant "white space" that has only minimal use for short-range applications like wireless microphones. In addition, currently 91 percent of households get their television service through cable or satellite, an indication that viewers are for the most part opting out of the traditional "free" television program delivery.

Hazlett proposes that the FCC could require cable and satellite providers to offer a low cost service carrying only local channels, while providing vouchers to connect to the service for those who have not had recent subscriptions to cable or satellite. The cost of doing so would be far outweighed by the benefits of selling off the spectrum. Another alternative would be to reduce the number of channels available in a community from 49 to 5 or so.

The Buried Treasure in Your TV Dial, The New York Times, February 28, 2010. By Richard H. Thaler.

Excerpt:
"The problem is that the usable radio spectrum is limited and used inefficiently. Think of it as a 100-lane highway with various lanes set aside for particular uses, including AM and FM radio, TV and wireless computer technology. The government -- specifically, the Federal Communications Commission -- is in charge of deciding which devices use which lanes.

"Because we can't create additional spectrum, we must make better use of the existing space. And the target that looks most promising in this regard is the spectrum used for over-the-air television broadcasts.

"These frequencies are very attractive on technological grounds. People in the industry refer to them as 'beachfront property' because these low-frequency radio waves have desirable properties: they travel long distances and permeate walls. We have already allocated parts of this spectrum for mobile wireless, and the F.C.C. recently auctioned other parts for $19 billion. That has left 49 channels for over-the-air television."

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