The Demise of Property Rights Has Been Greatly Exaggerated …

Josh Wright —  23 July 2008

My colleague Tom Hazlett (George Mason University) has a characteristically thoughtful and provocative column in the Financial Times on the recent Clearwire joint venture and what it tells us about the “innovation commons” and current public policy debates such as network neutrality, spectrum property rights, and municipal wi-fi. Here’s an excerpt:

Clearwire-Sprint-Intel-Google-Comcast-TimeWarner-McCaw blasts away barriers to broadband and a flock of public policy myths. Stories about the coming era of municipal wi-fi, the obsolescence of property rights to radio spectrum and the desperate need for “net neutrality” fall to pieces. For years these tales were spun from the triumphal assertion that the “innovation commons” of the post-internet economy changed everything. The “Chicago School” tools to prosperity – establish property rights, deregulate, let market competition rip – were dusty relics of a bygone era.

So broadband was a crummy cable-DSL duopoly, and local governments’ wireless networks would fix that. Mobile telephony was a crummy oligopoly, and more unlicensed spectrum – as used for wi-fi and cordless phones – would fix that. And to protect it all, the internet’s “open end-to-end” environment needed some regulatory muscle: rules prohibiting discrimination by internet service providers, control freaks who, left to their grabby impulses, would increasingly squeeze customer choices. Network neutrality rules would fix that.

But here’s “New Clearwire”. The chief advocates of muni networks are shelling out to build private networks, instead; the lobbyists for more unlicensed spectrum are paying to purchase licensed spectrum; the champions of net neutrality are getting preferential non-neutral customer access by buying the internet service provider…. New Clearwire tells us that a “fully-open, third pipe” has arrived in the broadband market – and their corporate network, crafted with exclusive spectrum and preferential access, and gobs of private capital — will deliver it. That, truly, is a great leap forward. Thank goodness for the “innovation commons”. The Chicago School could not have said it better.