Re: Abstract forms of property

Hal Finney (
Fri, 8 Jan 1999 13:47:43 -0800

Suppose you set up a radio system on your property, just for personal use, such that not much radio energy leaks onto your neighbors. But the guy next door is trying to build a radio telescope, and his equipment is so sensitive that your low power transmissions interfere with his observations.

He ought to be able to come to you and pay you not to emit radio waves of a frequency and power level which will interfere with your observations. I'm sure that we will all agree that this would be a legitimate contract.

Furthermore, so that he does not face the risk that a new owner of your property will disrupt his work, he would like to make this contract pass on to future owners. It can be a restrictive covenant in the property deed, so that any future owner is bound by the same restriction. Such covenants are commonly used and should not be objectionable.

Another way to think of this is that you have sold him the right to use this part of the EM spectrum in this way on your property. This view of the transaction is compatible with the contractual approach, I think.

However the property-based perspective offers more flexibility. It suggests the possibility of further selling the EM emission rights, or packaging rights purchased from a group of people so that they can be sold for greater value.

It seems that the view of the EM spectrum as property is consistent with the view that people have the right to do what they want on their own property, as long as you set up the initial allocations correctly. Start off with the rights in the hands of individuals, and let them sell them as they wish.

After a short startup period, you'll end up with the same situation you'd have today if the FCC auctioned off the spectrum, to a first approximation. The spectrum would be bought and sold on the basis of economic value rather than political influence, and you'd get the benefits of increased efficiency.