The Public Interest, Spectrum Markets and the American Experience with Radio Regulation: Historical and Comparative Lessons for the European Union

Michael R. Fein Ph.D., Johnson & Wales University - Providence

This paper appears in the Internationalization of Infrastructures, Proceedings of the 12th Annual International Conference on the Economics of Infrastructures, Edited by Jean-François Auger, Jan Jaap Bouma and Rolf Künneke.


This chapter reflects on radio spectrum management in the United States, with the aim of identifying useful historical and comparative lessons for European Union policy makers as they contemplate the adoption of pan-European market mechanisms to allocate radio frequencies. It explores the history of American radio regulation and the impact of conflicting interpretations of that history on contemporary policy debates surrounding the liberalization of spectrum markets. The public interest theory of policy making has long been critiqued as inappropriate to spectrum management by economists following the lead of Ronald Coase. But the American experience with radio regulation suggests that economic efficiency, consumer welfare and the promotion of technical innovation are better understood as variants of the public interest, and ought to be weighed against other public interest dimensions of broadcast regulation, including the importance of preserving localism and diversity on the airwaves.