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

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  • Thomas Hazlett

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. Copyright Springer Science+Business Media New York 2014

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  • Thomas Hazlett, 2014. "The Rationality of U.S. Regulation of the Broadcast Spectrum in the 1934 Communications Act," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 45(3), pages 203-220, November.
    • Handle: RePEc:kap:revind:v:45:y:2014:i:3:p:203-220
    DOI: 10.1007/s11151-014-9429-9
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    References listed on IDEAS

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    1. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    2. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    3. Hazlett, Thomas W, 1990. "The Rationality of U.S. Regulation of the Broadcast Spectrum," Journal of Law and Economics, University of Chicago Press, vol. 33(1), pages 133-175, April.
    4. Lueck, Dean, 1995. "The Rule of First Possession and the Design of the Law," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 393-436, October.
    5. Thomas W. Hazlett & David Porter & Vernon Smith, 2011. "Radio Spectrum and the Disruptive Clarity of Ronald Coase," Journal of Law and Economics, University of Chicago Press, vol. 54(S4), pages 125-165.
    6. Hazlett, Thomas W, 1998. "Assigning Property Rights to Radio Spectrum Users: Why Did FCC License Auctions Take 67 Years?," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 529-575, October.
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