The case for eliminating FCC control of broadcast licenses

The case for eliminating the FCC and federal control of broadcast licenses

(This argument is not new. It has been made before by Ayn Rand and Thomas Sowell and others who understand economics, but I will attempt to distill it into a quick argument.)

Broadcast frequencies are a limited (economically "scare") resource. This is also true of land in Manhattan or beachfront property.

Long ago, big government argued the following: Broadcast signals interfere with if each other if two stations use the same frequency. Therefore, Hoover and others said the government must hand out and manage the licenses. They also stated that the FCC should have the opportunity to "monitor" licensees' content and take those privileges away if the FCC is displeased.

Using this system, broadcasters must please the FCC to keep their license. Since the license has no "fair market value" the broadcaster is insulated from the need to please their audience (they public) fully. Sure, they want larger audiences because that means more profits, but by eliminating markets from quantifying the true cost of having a frequency, it eliminates much of the pressure for the station to use these scarce resources in the BEST way.

If licenses were sold to owners and then made to be the property of the buyer, the license's value would rise or fall depending on the size of the audience attracted by that owner. So not only would advertising revenue follow quality, but so would the market value of the license. Licensees would be no longer under pressure not to lick the boots of the FCC. This would eliminate an opportunity for big government to extract bribes and favors. The public wins under this system. Big government, lobbyists and mooching bureaucrats lose.

In other words, making the license private property creates an incentive to high quality broadcasting by driving up the value of a broadcast license, based on the opinions of the public rather than a capricious FCC.

Courts of law would settle disputes over license infringement (just as the constitution calls for them to do for all other property rights), freeing up many FCC workers to do more productive work somewhere else in the economy.