Results for “satellite radio” 33 found
The High Cost of Free TV
Despite the fact that 91 percent of American households get their television via cable or satellite huge chunks of radio-spectrum are locked up in the dead technology of over-the-air television. In his Economic View column today Richard Thaler features the work of our GMU colleague Tom Hazlett who argues that auctioning off the spectrum to the high value users would generate at least $100 billion for the government and generate a trillion dollars of value to consumers. Thaler writes:
I KNOW that this proposal sounds too good to be true, but I think the opportunity is real. And unlike some gimmicks from state and local governments, like selling off proceeds from the state lottery to a private company, this doesn’t solve current problems simply by borrowing from future generations. Instead, by allowing scarce resources to be devoted to more productive uses, we can create real value for the economy.
Why isn’t your cell phone service better?
Matt Yglesias offers part of the answer:
One major impediment to better wireless service — be it for cell phones or broadband internet — is that right now we have television broadcasters squatting on two different swathes of the radio spectrum. One is used for digital television broadcasts and one for analog broadcasts. This came about as part of an ill-advised congressional giveaway in the mid-1990s. The good news is that half of that spectrum is scheduled to revert back to the federal government which will then auction some of it off and let the rest operate as "unlicensed" spectrum, like the spectrum block that current WiFi application sit on.
The bad news is that if you do that, the approximately 13 percent of households that currently rely on over-the-air (OTA) analog television suddenly can’t get any channels. That’s not going to sit well with the voters. So there’s an impulse in congress to push the transition date backwards and hope more people switch to cable, satellite, or HDTV by then. The problem here is that the spectrum in question would be really, really useful to wireless providers and would let them build various cool and awesome things for people to buy. Even better, the spectrum is so useful that the government will be able to get a lot of money auctioning it off. Way more than enough money, in fact, to give OTA households free conversion boxes to ensure that their TVs still work and still have money left over for something else. For reasons that aren’t clear to me, however, congressional Republicans don’t seem to like this idea and are therefore delaying the advent of better wireless.
As long as we are complaining, most other countries are on a compatible (GSM) system for international cell phones but the U.S. is not (addendum: Many of you have written to note that Cingular is one exception to this claim). I can buy a cell phone and sim card in Dubai and use it in Australia or New Zealand but not in Peoria.
Candidate Public Good
A colleague of mine at CMC is valiantly continuing his crusade against the notion of public goods (A public good is not rival in consumption; my using it does not diminish your use of the good and not excludable). My colleague has two issues. First, he has never come across a good that fits the description well enough to deserve the label and second, almost any discussion of public goods inevitably leads to a discussion of the need for government provision. I find his argument persuasive. It doesn’t take long in government to hear about countless public goods crying out for government provision.
Thus it is with some trepidation that I mention a candidate for the textbook public good. The Global Positioning System, GPS, which provides location information for both military and civilian uses, is currently provided by the US government at no direct cost to users. GPS was constructed to be non-rival and non-excludable. The way the GPS system works is that a series of signals allow a receiver to triangulate the user’s location without the user needing to communicate back to the satellite. The military nature of the system means that users do not actually want to be found; hence GPS is designed for passive use only. It also makes it very difficult to charge end users for using the signals.
The US government has picked up the cost of providing the system and, according to the Economist
“…after spending $20 billion, the Pentagon has built a global system that is a key ingredient of NATO defense. But it is also an essential prop to countless civil applications: for every military user, there are now 100 civilian users. GPS provides not only satellite-navigation systems in cars and boats; it is used by internet service providers, by banks and by surveyors. One day it might be used by air traffic control systems to permit “free flight”, in which pilots of commercial aircraft find their own route and stay clear of other aircraft, without the cumbersome business of radio telephone contact with controllers on the ground.”
So is this a lighthouse or not? The debate is currently more than academic. The Economist details the European Union’s solution to the provision of position navigation and timing services. The EU’s proposed system,
“…will be in part a commercial system. A concessionaire will get the right to operate the system for a fixed period in return for plunking down two-thirds of the deployment costs–around $2.8 billion.”
I look forward to the day when a Principles of Economics textbook uses GPS as an example of public good. Whether Pigou or Coase wins this one I cannot predict.