From the WSJ Opinion Archives
THE WESTERN FRONT
Free Northpoint
Efforts to expand the radio spectrum suffer from political interference.
Washington is now battling over new media-ownership rules that would allow one company to own TV stations that reach 45% of the national audience, up from 35%. One of the latest salvos was a warning from Sen. Ted Stevens to President Bush not to veto the omnibus spending bill, which contains a provision for rolling back the new rules.
But for all the talk of how these rules spell doom for dissenting voices in the media, there's little mention of a market solution: expanding the spectrum to allow for emerging stations--or a new nationwide network--to compete with existing players.
Yet there's a company begging the Federal Communications Commission for the opportunity to do just that. Nearly a decade ago, a start-up called Northpoint Technology Ltd. developed technology that allows spectrum space to be shared. It essentially allows some of the invisible electromagnetic waves that carry TV and radio signals to be reused without interfering with existing licensed users.
So far the FCC has left Northpoint on the sidelines and is trying, instead, to auction off the new spectrum created by this new Northpoint technology. That way the Treasury can collect millions of dollars, and the regulators can pretend they've allocated a scarce resource on a "fair" and "competitive" basis. But there's an obvious problem: Northpoint is sure to be outbid by deeper pockets and thus will never have a chance to profit from its own creation. The FCC argues that the law gives it no choice, and so Northpoint has little recourse outside of an act of Congress.
Sens. Mary Landrieu (D., La.) and John Sununu (R., N.H.) have been pushing legislation to fix this by blocking the FCC's auction and have lined up 14 Senate cosponsors. They even managed to get their provision added to the omnibus spending bill, but unfortunately it was stripped out as appropriators hammered out the final details of the bill. One of the biggest opponents of this provision has been the chairman of the House Commerce Committee, Rep. Billy Tauzin of Louisiana, who sees it as a "deal breaker" for broader spectrum reform. His Senate counterpart, John McCain, has a similar view, calling the Northpoint bill a "giveaway."
Any "comprehensive spectrum management" plan--such as the one Mr. Tauzin is now working on with the FCC--will likely have to rely heavily on auctions. But it's a good idea only if it addresses the underlying problem, that we're running out of usable spectrum. In patches across the country, cell phones and other handheld devices are interfering with the radios carried by emergency responders, which may necessitate "migrating" these new technologies to a different part of the spectrum--at great expense to consumers. So why not give the market an incentive to create more of it by letting Northpoint and others profit from their innovations?
There once was such an FCC program. The Pioneers' Preference Program was killed by the Clinton administration in 1997, at the time Northpoint executives were still proving to regulators that their technology works. If Northpoint had been granted a national license and built its nationwide broadband TV network (to compete with DirecTV and others), consumers would have saved $14.6 billion over four years, estimates former FCC chief economist Thomas Hazlett (who's also done some consulting work for Northpoint).
Consumers could only be better off with another competitor in the market. Northpoint's business model calls for linking local TV stations across the country and would be able to deliver broadband to areas (Alaska) that the cable and satellite companies won't reach. This would allow for local programming, localized Amber Alerts and other emergency warnings--as well as those dissenting media voices that everybody seems so concerned about.
Mr. Miniter is assistant editor of OpinionJournal.com. His column appears Tuesdays.
