Exportación de Pimiento Piquillo: el Ají Gourmet

While the concept of estates in spectrum is relatively straightforward, the mechanics by which a system of administrative licenses would be converted to a system of fee simple deeds have not been identified. Most tangible public assets that are privatized, like land and public concessions, are in the hands of the government and can simply be auctioned off. Like such public assets, spectrum usage rights are controlled by the government. Yet, unlike government property, many of these rights have already been auctioned off, in many cases for hundreds of millions of dollars. Where they have not been auctioned, they may have been purchased as part of the sale of a communications company.

In this way, most of the prime spectrum (below 3 GHz) is already occupied by stakeholders or has been made available for unlicensed use. Although licenses to use spectrum are not in fact property rights and licensees are denied the privileges of property ownership, courts have still recognized in FCC licenses some of the attributes of private property.156 _{These attributes include the reliance interests licensees may} 154. De Vany et al., supra note 3, at 1530 (writing that a spectrum registry should cover “changes in boundaries of [transmission right] areas, sales or leases of [transmission right] combinations or of any [transmission right] component, and any other transaction affecting the use of a [transmission right] combination that a potential purchaser would care to know about”); Hazlett, The Wireless Craze, supra note 3, at 544; White,supra note 3, at31 (writing that “[a] national registry of spectrum ownership would be maintained, comparable to local land registries”). A similar registry has been proposed for the United Kingdom. See MARTIN CAVE, REVIEW OF RADIO SPECTRUM MANAGEMENT: AN INDEPENDENT REVIEW FOR DEPARTMENT OF TRADE AND INDUSTRY AND HM TREASURY 13 (2002) (proposing a public “on-line database of spectrum assignments”), available at http://www.spectrumreview.radio.gov.uk/2002reveiw/2_title-42.pdf

155. See Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets, 18 F.C.C.R. 20,604 (2003) (recognizing that intensive spectrum leasing within the existing administrative regime “would require tradeoffs in multiple dimensions—e.g., time, space, geography, type of use, and technology—and that, in the absence of an effective facilitator, search costs would be high”).

156. See, e.g., In re Atl. Bus. & Cmty. Dev. Corp., 994 F.2d 1069, 1073–74 (3d Cir. 1993) (“The Communications Act itself seems to imply the existence of a limited property right in an FCC license once it is granted. Section 301 . . . implies the creation of rights akin to those created by a property interest limited only by the ‘terms, conditions and periods of the license.’”); Orange Park Fla. T.V., Inc. v. FCC, 811 F.2d 664, 674 n.19 (D.C. Cir. 1987) (holding that, while a broadcast license is not a full-

have in retaining their licenses as well as in maintaining the specific terms of their licenses.157 _{The treatment of FCC licenses as property like} any other asset in bankruptcy proceedings demonstrates the same phenomenon of quasi-propertization.158 _{Given the existence and recognition} of quasi-property rights in spectrum, it is hard to conceive of a devolution of spectrum management from public to private spheres that bypassed these existing stakeholders, who in so many ways already look like proprietors. In other words, the government is not about to “repossess” spectrum from licensees in order to auction off spectrum deeds.

Far more conceivable is a process by which the stakeholders themselves would become owners. Just as first possession has provided the starting point for initial property assignments in the real world, so too private property rights in spectrum would probably grow out of what is. In this vein, to avoid frustrating the interests of existing licensees, many of whom paid for their usage rights at auction, it has been proposed that licenses simply be converted to spectrum deeds in a “big bang” revolution in spectrum management.159

The transformation of existing licenses into fee simple deeds, whether it happened in a big bang or a slow drift, would have significant interference consequences that have not been addressed by private fledged, indefeasible property interest, “neither is it a non-protected interest, defeasible at will. Indeed, to suggest as much would, among other things, throw considerable doubt on the Commission’s well-known recognition of a renewal expectancy that leads applicants to vie for licenses which, if awarded, will require a significant expenditure of resources”); Reuters Ltd. v. FCC, 781 F.2d 946, 950 n.5 (D.C. Cir. 1986) (holding that a properly granted radio license is a “vested interest”); L.B. Wilson, Inc. v. FCC, 170 F.2d 793, 798 (D.C. Cir. 1948) (“[T]he Communications Act itself . . . recognize[s] that a broadcasting license confers a private right, although a limited and defeasible one.”).

157. See generally William L. Fishman, Property Rights, Reliance, and Retroactivity Under the Communications Act of 1934, 50 FED.COMM.L.J. 1, 6–9 (1997); Shelanski & Huber, supra note 138, at 583–95 (analyzing the property rights of broadcast spectrum licensees based on the scope of their ability to use, alienate, subdivide, or transfer their spectrum authorizations); see also Krystilyn Corbett, Note, The Rise of Private Property Rights in the Broadcast Spectrum, 46 DUKE L.J.611,634– 36(1996). These accounts of administrative entitlements as a new form of property owe much, of course, to Charles Reich’s seminal article on the administrative creation of property rights. See generally Charles A. Reich, The New Property, 73 YALE L.J. 733 (1964).

158. See FCC v. Nextwave Pers. Communications, Inc., 537 U.S. 293, 299, 308 (2003) (holding that the FCC was not permitted under federal bankruptcy law to rescind a license from a bankrupt bidder for failure to pay auction fees because the license was an asset in bankruptcy and the FCC an ordinary creditor).

159. See KWEREL &WILLIAMS, supra note 143, at 2 (proposing big-bang auctions); see also De Vany et al., supra note 3, at1529–34(supporting this proposal).

property advocates. As discussed above, with the exception of newly granted flexible use licenses, existing licenses are service based.160 Licenses not only define spectrum usage rights along three dimensions, but also dictate what services can be transmitted, perhaps also dictating what technologies can be used. The power levels designated by existing service rules are thus premised on the use of a particular architecture, certain equipment, and specialized service needs. Radio and cellular phone service, for example, use dramatically different technical architectures, and these differences are reflected in the rules governing each service.

If the property rights of licensees, as well as new entrants, were defined by the terms of existing licenses, these service rules would have to be eliminated or substantially relaxed. This is because the existing service rules prevent most of the trades spectrum owners would want to make. Under existing rules, for example, Jane would not be able to sell her radio transmission rights to Mike for Mike’s operation of a cellular phone service, even if Mike agreed to operate according to the same technical limitations (frequency, time, and power) that bind Jane. A relaxation of service rules, permitting more flexibility in the use of spectrum, would be necessary to allow efficient trades. But such relaxation—a disassociation of technical specifications and service rules—is likely to engender increased interference even if every operator kept its power emissions in check. This is true for the same reasons that increased flexibility in the current regime has increased interference concerns.161 _{The technical specifications might be rendered either over-} or under-protective, meaning that Mike’s cellular system might cause significantly more interference, or be more sensitive to interference, than Jane’s radio service. The result would be greater uncertainty about the integrity of wireless systems and greater conflict over interference.

Given the likelihood of increased conflict in an altered spectral environment, populated by property owners with substantial flexibility to change technology and network configurations, an account of private property rights in spectrum is not complete without an account of conflict resolution.