The dental school of spectrum regulation

Tom Hazlett explains how regulators, vested interests, and misguided consumer advocates conspire to block innovation and competition in the spectrum markets, ushering in the "dental school" of spectrum regulation. This is a case in which those wary of government regulation and those wary of excessive corporate power should unite--but alas few will stand up for the would be entrepreneur.

Excerpt:

Take satellite radio, where one of two US operators (XM) has patented a means to simultaneously use assigned frequencies for ground-level communications without degrading the 100 channels beamed from orbit coast-to-coast. The breakthrough has triggered an industry firestorm, as the new system - if deployed - would permit satellite radio programmers to offer custom content in each of the 269 local radio markets, unleashing thousands of new radio stations.

It will not be allowed. For radio station owners, no local satellite news is good news. Satellite licence restrictions, espoused in the "public interest" by industry incumbents and regulators, render the competitive threat moot. Ironically, these barriers are now buttressed by the "dental school" of spectrum regulation. When maximum revenue extraction becomes the aim of public policy, upstarts (like satellite radio in local markets) are simply unable to afford the toll.