Review of Industrial Organization

, Volume 45, Issue 3, pp 203–220 | Cite as

The Rationality of U.S. Regulation of the Broadcast Spectrum in the 1934 Communications Act

Article

Abstract

The Federal Radio Commission regulated radio broadcasting, 1927–1934. With the passage of the Communications Act of 1934, the 1927 Radio Act (enabling the Commission) was re-enacted in whole. This congressional endorsement yields key evidence as to what policy outcomes were intended, differentiating competing theories for the origins of spectrum allocation law: Coase (J Law Econ 2(1):1–40, 1959), emphasizing policy error; Hazlett (J Law Econ 33:133–175, 1990), focusing on “franchise rents” in a public choice framework; and the “public interest” hypothesis, reconstructed by Moss and Fein (J Policy Hist 15(4):389–416, 2003). Congress’ revealed preferences prove consistent with the franchise rents theory, while contradicting the other two.

Keywords

Political economy Spectrum allocation Rent-seeking Public interest 

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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.H.H. Macaulay Endowed Professor of EconomicsClemson UniversityClemsonUSA

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