Top Law Journals Publish Articles Detailing the Quasi-Property Rights of Television Broadcasters in their FCC Licenses and the Impact on the Spectrum Reallocation Process

Share Article

Two Leading law journals recently published academic papers concerning property rights in FCC spectrum license rights written by Summit Ridge Group, LLC president and founder J. Armand Musey. The papers address the significant issue of the quasi-property rights television broadcasters hold in their spectrum licenses and how that impacts the FCC’s options for reallocating that spectrum. They are important reading for professional working on spectrum auction related issues.

The upcoming voluntary incentive auction process for television broadcasters’ spectrum seeks to reallocate currently licensed TV broadcast spectrum to mobile broadband use. In the process, it has launched a showdown between television broadcasters and the government. The FCC is working through the rules for the auction and has recently released a Notice of Rulemaking Proposal but many details remain to be finalized.

The critical, but often unspoken issue at the heart of the spectrum reallocation process is the question of whether, and to what extent, television broadcasters ultimately possess rights to licensed spectrum. What type of compensation, if any, they would be owed - for legal or practical reasons - if the FCC ultimately takes their spectrum licenses involuntarily? If the auction fails, what other options does the government have for reallocating the spectrum?

Armand Musey’s two academic papers addressing these issues have recently been published in the Columbia Science and Technology Law Review and in the Hastings Communications and Entertainment Law Journal (Com/Ent). Mr. Musey indicates, “The papers cover a highly topical issue and have received positive feedback from both academics and legal practitioners.” He has presented his papers at the 2012 Association for Law, Property and Society Annual Meeting at Georgetown University Law Center and will be speaking about them later this month at Columbia University Law School.

His first paper, “Broadcasting Licenses: Ownership Rights and the Spectrum Rationalization Challenge” provides a detailed analysis of the nature and the limits of the “quasi-property rights” of FCC spectrum license holders. It finds that that broadcasters have a very weak property rights claim over their spectrum licenses. However, broadcasters may be entitled to due process before their licenses can be taken involuntarily; they are almost certainly entitled to seek judicial review of any adverse FCC decisions.

Such review would extend the already lengthy FCC rulemaking and adjudication process, and further delay spectrum reassignment. For practical political reasons, including maximizing revenue from future spectrum auctions, the most expedient way to reallocate spectrum is to incentivize the broadcasters to voluntarily participate in a reallocation plan by providing compensation beyond the legally required minimum. For these reasons, the FCC’s announced incentive auction process is a reasonable approach to the situation.

Mr. Musey’s second paper, "How the Traditional Property Rights Model Informs the Spectrum Rationalization Challenge,” finds that eminent domain may be a reallocation approach that provides a viable framework for negotiating a buyout price for the television broadcasters.“ At the same time, the threat of uncompensated rezoning the broadcaster’s spectrum to deprive it from broadcasting use gives the government with a “‘stick’ to encourage the broadcasters to agree to reasonable terms to vacate their spectrum.”

Although the FCC may not explicitly threaten eminent domain or re-zoning, the ultimate availability of these options should the auction process fail are likely to “inform the negotiations and help provide an equitable outcome for the broadcasters and the U.S. Government.”

Together, these papers provide an extensive background of the historical and practical basis by which not only television broadcasters, but also other FCC license holders, have rights in their licenses. They also provide perspective on the extent of those rights and implications for the government’s reallocation process. They are valuable reading for a variety of business and legal wireless spectrum professionals, particularly those who may be involved in the incentive auction process.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Press Administrator
Follow us on
Visit website