Hazlett in The Hill: Market Protects Consumers Better than Regulation

In an op-ed for The Hill's Congress Blog, Professor Thomas Hazlett makes a case for re-allocating the radio spectrum set aside for television broadcasting for alternative uses, like mobile voice and data applications.

Hazlett points out that only 9% of households rely on over-the-air TV to receive their video signals. "With the great majority of Americans opting out of terrestrial broadcasts, the last 10 million 'broadcast-only' homes could be easily served, at extremely modest cost, by existing (non-broadcast) video delivery platforms," he explains.

Hazlett cites three powerful factors driving changes in economic realities: the emergence of wireless broadband services and the “smart phone wars” have triggered a mobile data tsunami, competition between video platforms has intensified, and linear network TV line-ups are being challenged by video delivered via the Internet.

"The market is in flux, as existing business models give way to more efficient innovations," says Hazlett. "Legacy regulations can go gracefully, or put up a fight."

Television for the 21st Century, The Hill, June 13, 2011. By Thomas W. Hazlett.

"Television signals traveled the path then efficient: terrestrial broadcasting. That drew in regulators to supervise airwave use. They seized the opportunity to police not simply the mundane conflicts of overlapping emissions, but to design the market. The TV Allocation Table of 1952 defined a paradox: huge bandwidth was set aside for broadcasting, but very few licenses were issued. Competitive forces were quashed. Indeed, when a fledgling fourth national broadcast network - DuMont - challenged NBC, CBS and ABC, it was extinguished by 1955. Cause of death: regulation.  

"By the early 1960s cable TV systems saw an opportunity to expand viewer choice. They began constructing a 'Wired Nation.' That project abruptly ended, as the Federal Communications Commission moved aggressively to block cable TV. The rationale: the new competitors would 'siphon' broadcast audiences, harming TV stations.

"The 'deregulation wave' of the 1970s reversed many of these rules. Wired conduits soon delivered popular new programs, and entire networks were created devoted to news, sports, movies, music or documentaries. By 1988,  most U.S. households subscribed to cable TV. By 1996, two national satellite TV systems operated. By 2000, telephone carriers had begun building video networks. Today, broadband data networks, fixed and mobile, offer additional delivery pathways bringing video to viewers."

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