Ch 1 Why Regulate

Chapter 1 – Why Regulate
1.2 Defining Spectrum
• Spectrum- range of radio wavelengths (frequencies) currently suitable for wireless transmission.
• Spectrum as a Resource
o -Create wealth and value
o -Used in varying amounts for the same purpose
o -Costly in that any spectrum committed to one use can no longer be employed toward a different valuable end
o -Absolute amount of variable spectrum is finite, but the amount of usable spectrum can be increased with appropriate investments in technology
1.3 The Early History of Broadcast
o 1910- Ships had to carry wireless devices
o Radio Act of 1912
o -The federal Government would control broadcasting
o -Spectrum would be allocated among uses and users
o Herbert Hover and the Growth of Radio
o -Remolded the Radio Act of 1912 to foster a wider use of the newly emerged technology
o -Division between military, commercial and amateur use
o Radio Act of 1927
o -No private ownership of the airwaves
o -Senate wanted an independent regulatory commission
o Principle Features of the 927 Act
o -Central feature of the radio act was its deliberate choice to preclude private ownership of spectrum rights while licensing those rights for brief periods to private users free of charge
o The Federal Radio Commission
o -Public interest standard
o -Changed the assignments of 94% of broadcast stations that favored applicants with superior technical equipment- favored established commercial broadcasters
o The Shuler Case
o -Moralist with a dislike for prostitution and alcohol, used the station as a forum for outrageous and unfounded attacks on public officials
• Commission decided his broadcasts were sensational rather than intrusive
o The Brinkley Case- Goat Gland Doctor
o -Spoke about medical problems and would prescribe medical advice to listeners
• —-Medical question box was found NOT in the public interest
o The 1934 Act
o -Replaced the Radio Act of 1927
o -Substituted the FCC for the FRC
o -Gave federal regulation of interstate telephone and telephone and telegraph service to the FCC
1.4 Scarcity/Interference
o Interference between 2 broadcasters and from outside sources
o Supreme Court said there was excess demand for the free broadcasting licenses provided by the government
o 1.4.2- Special Interest Protectionism
o Primary motivation of the 1927 Act was not to reduce interference but to distribute monetary rewards among certain politically dominant claimants.
o 1.4.3- Consumer Preference
o -Should the broadcast marketplace respect consumer preference or use regulation to try and constrain and mold consumer choice?
• -Paternalistic Argument- consumers don’t know what is in their own best interest
• -Externality Argument- One persons consumption of broadcast content may affect another persons well being

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