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Letter to FCC On Creation of Trust Fund for Public Media

Today, Policy Integrity sent a letter to the Federal Communications Commission (FCC) on Obama’s plan for voluntary incentive auctions of noncommercial broadcast television spectrum. This plan would permit the FCC to conduct incentive-based auctions of unused broadband spectrum, making more airwaves available for wireless broadband services to prevent network congestion amid shooting demand for services such as mobile web surfing.

The letter urges the FCC to consider putting aside a substantial portion of the revenues from the auctions into a trust fund for public media. Dedicating these proceeds to fund multi-platform content development for public media would be consistent with the original purpose for which the spectrum was allocated: non-profit educational media such as NPR and PBS.

Government provision of public media is vital because of the “public good” nature of information, which creates a “free rider” problem whereby informational content produced is easily repackaged and redistributed, robbing the original creator of the ability to capture a benefit commensurate with the value of their programming. Further, externalities inherent in the marketplace mean that private actors do not have the necessary financial incentive to produce the amount and type of informational content necessary to maximize social welfare.

The establishment of a trust fund would not only correct this market failure but could also pre-empt counterproductive interference from the political process while ensuring a beneficial support system for an extremely valuable public good.