The need for a TV incentive auction shows...

The need for a TV incentive auction shows a breakdown in FCC power to regulate the airwaves, Tom Hazlett, a former commission chief economist, suggests in a white paper released Friday (See related story). The FCC has under the Communications Act “full authority to allocate spectrum according to ‘public interest, convenience or necessity,'” he said. “It does not exercise such powers in fact. The agency vested with issuing and renewing (on a seven-year cycle for TV stations) all wireless licenses has revealed that it must -- to carry out its legal mandate to promote the public interest -- buy back FCC licenses from the private parties it has assigned them to (and would use its discretion to otherwise renew).” But Hazlett said in part the FCC is recognizing reality. “Compelling evidence supports the FCC in its judgment that TV Band spectrum is efficiently substituted from TV to mobile services, and the Commission’s belief that it would be hamstrung -- by litigation, congressional backlash, or both -- if it were to uproot existing broadcasting stations (i.e., deny license renewals) under its ‘public interest’ authority,” he said (http://bit.ly/1kdcLRI). “The crucial insight is that regulation, as judged by the regulators, is too unwieldy a tool as to remedy the errors made in previous regulatory choices, such that using market mechanisms -- reverse auctions, in this instance -- will lower the cost and speed the delivery of efficient substitutions.” Hazlett is a professor at Clemson University, on leave from George Mason University.