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Business and Politics

Editor-in-Chief: Aggarwal, Vinod K.

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Digital Television and the Quid Pro Quo

Thomas W. Hazlett1 / Matthew L. Spitzer2

1American Enterprise Institute

2Caltech and University of Southern California

Citation Information: Business and Politics. Volume 2, Issue 2, ISSN (Online) 1469-3569, DOI: 10.2202/1469-3569.1006, August 2000

Publication History

Published Online:
2000-08-01

The recent zero-priced award of $11-70 billion in digital TV (DTV) licenses by the federal government occurred when auctions had been initiated for non-broadcast licenses and when the seven decade-old regime of 'public trusteeship' in broadcasting had become famous for licensee reneging on promised obligations. Policymakers nonetheless declined to auction DTV licenses when enacting the Telecommunications Act of 1996, rejecting a plea from the Senate Majority Leader. This paper provides an overview of the episode and investigates three basic questions. (1) Why does Congress continue a regulatory system that routinely fails to provide the benefits it is supposed to generate? (2) Why did the National Association of Broadcasters propose high definition television as a way of keeping land mobile operators off an unused spectrum? (3) Why did Congress delegate to the FCC the decision to award licenses for digital television broadcasting?

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