Homesteaders Beware
I already wrote on the egregious FTC proposals to begin the government takeover of journalism. But I missed this part, via South Bend Seven, which caught my eye in their post:
Tax on broadcast spectrum. They argue "commercial radio and television broadcasters are given monopoly rights to extremely lucrative spectrum at no charge," and this is a massive public subsidy. They therefore suggest the revenues generated by that spectrum be taxed at a rate of 7 percent, which should result in a fund of between $3 and $6 billion. In exchange, commercial broadcasters would be relieved of any obligations to engage in "public-interest programming," which the broadcasters claim costs them $10 billion annually.
Much of the TV and radio spectrum was indeed "given away," in exactly the same process that the Homestead Act (and I believe the Northwest Ordinance before that) "gave away" land to Americans who were willing to develop it. These acts gave land away to pioneers who were willing to take the risk and effort to develop what was essentially value-less land into a productive asset (the land had potential value, but until someone tilled it and put up structures and built rail and road to it, it was worthless). When TV and Radio broadcasters first started using the spectrum, it was worthless -- and we were even less confident in its potential value than we were of the land in the Homestead Act. The spectrum did not have value until private broadcasters demonstrated it had value through their investment, development, and experimentation.
So is Congress next going to tell everyone who lives on homesteaded land that they received a massive public subsidy and that their land is now going to be taxed? The current landowner would likely argue that they didn't get the land for free - they bought it for a substantial price from the previous owners, who bought if from someone else, who bought it from the original homesteader. But the situation is no different in the broadcast spectrum. Clear Channel did not get the spectrum for free -- it did not even exist for decades after the spectrum was homesteaded -- it paid a full market price for the spectrum it controls.
Postscript: However, I am happy to see even the leftish Obama Administration admit that public-interest programming is a questionable requirement. Because broadcasters only make money if they broadcast things people want to see or hear, everything they do is "public-interest." What is meant in practice by the term "public-interest" should actually be called "political-interest" programming, because this programming tends to be uninteresting to the great majority of the public (have you ever listened to the garbage at 5am on Sunday morning on radio?) but is supported by small niche groups that have disproportionate political influence. Let's remove these requirements as stupid without holding up broadcasters for more taxes in exchange.
