A culture of co–creation is emerging in art, design, architecture (Armstrong and Stojmirovic, 2011), music, video, literature and other productive fields like manufacturing, urban agriculture and biotech. Many of the tools of production and distribution used by professionals are available to the broader public. Publics are becoming more and more productive (Jenkins, 1992; Arvidsson, 2011). The rise of these phenomena suggests that a new modality of value creation is affirming itself in the information economy (Arvidsson and Colleoni, 2012). This emerging co–creation culture and a new theory of value also affect the radiophonic medium. The combination between radio and social networks sites (SNS) brought to completion a long historical process by virtue of which the distance with the public decreases, as Walter Benjamin already understood in his work on the relation between radio and society. In this paper I will focus on the changes that the publics of radio have undergone in the last stage of this “history of distance”, since they started to use social media, in particular Facebook: change in the publicness of publics; in the value of publics (publics are participating into the production process); in the speaker–to–listener relationship (where a new form of intimacy is becoming predominant) and in the listener–to–listener one; in the role and ethic of the radio producer (which is becoming more curatorial and less productive). To do this I will have to mix two different fields of studies: the radio studies tradition and emerging studies about social media.
Introduction: Remixing Benjamin
Facebook: A dramaturgical approach
Doing radio in the age of Facebook
Introduction: Remixing Benjamin
The relation between radio and its public has always been based on a mutual act of faith: radio does not know its listeners, it never saw them and, for a long time, it never heard from them. Radio and its listeners have always been strangers to each other. Listeners never knew who the voices on the radio belonged to. The radio and its audience believe in each other without knowing each other. For a long time, until phone calls from listeners were introduced (in Italy this happened in 1969 with the programme Chiamate Roma 3131), the audience could only listen to the radio, without ever participating. Before the telephone, the only means of interaction between radio and listeners was mail: too little to speak of audience participation. From its invention, until the introduction of live telephone calls, radio has always been a top–down, push medium, from the centre to the periphery, with no space for feedback. The telephone, and subsequently mobile phones, e–mail, Internet streaming, blogs and social media progressively reversed the communication flow, re–establishing a balance in favour of the public. Finally, contemporary radio has become a potentially participative tool. With SNS (social networking sites) we are facing a paradigmatic change in the relation between radio and its audience: listeners are becoming the real content of radio. McLuhan already understood this when he claimed that “in electronic media user is content” . This has never been more true than today.
The first scholars to understand the value of radio as a social medium, rather than as a content distributor, were Brecht and Benjamin. Yet before Brecht, and even more remarkably, it was Walter Benjamin who realised radio’s radical potential as a “social medium”. Adorno and Horkheimer considered radio a tool for propaganda and to spread a stupefying kind of entertainment (Gilloch, 2002); Benjamin, having produced 90 programmes for the public radio of the Weimar Republic between 1929 and 1933, had a deeper knowledge of this means of communication, maintained, on the contrary, a positive outlook on radio. It had the ability, in Benjamin’s view, to transform the public’s relation to culture and politics (Baudouin, 2009). In his “Conversation with Ernst Schoen” (1929), Benjamin claims that radio should not be a means to circulate an outdated bourgeois culture or a mere entertainment medium: it should instead occupy a middle ground between sombre and dry educational broadcasts and the low–mindedness of vaudeville shows.
It is in Reflections on radio (1930), however, that Benjamin expresses the most fruitful ideas for our own times: “The crucial failing of [radio] has been to perpetuate the fundamental separation between practitioners and the public, a separation that is at odds with its technological basis. [...] The public has to be turned into the witnesses of interviews and conversations in which now this person and now that one has the opportunity to make himself heard” (Benjamin, 2003). The radio that Benjamin is advocating is a medium that reduces the distance between transmitter and receiver, allowing both the author/presenter and the listener to play the role of producers, who contribute to creating the radio narrative. The importance that Benjamin attributes to active reception is in stark contrast with the hypnotic effect of Nazi aesthetics  and with the allure of a radio show seen as a product to be consumed. Benjamin juxtaposes the aestheticisation of politics and art embodied by Nazism (and more in general by propaganda and consumer culture) with the politicisation of art, something which requires, in his view, a more active and participant role for the listener.
Benjamin further developed this theme in “The Author as Producer” (1934), a paper in which he pointed out the need for a new intellectual/producer figure (writer, photographer, radio drama author, film director) and the end of the distance between writer and reader due to the advent of new mechanical and electrical reproduction technologies. Benjamin noticed that more and more people had started to become “collaborators” in his own time through the rise of the newspaper, as editors created new columns according to the current tastes of their readers. These spaces were meant to make readers feel in touch with their culture, and in this sense the reader became a kind of author (Navas, 2005). Benjamin saw the reader as redefining the literary text; his example is the Russian press:
|“For as writing gains in breadth what it loses in depth, the conventional distinction between author and public, which is upheld by the bourgeois press, begins in the Soviet press to disappear. For the reader is at all times ready to become a writer that is, a describer, but also a prescriber. As an expert even if not on a subject but only on the post he occupies — he gains access to authorship.”|
A focus on the public’s feedback can also be found in another short essay from 1932, “Two Types of Popularity”, in which he assesses the role of radio as a pedagogical tool. Benjamin is convinced that the public should be respected, rather than being given content in a top–down fashion; it should also perceive that its interests are “real” and are being taken into account by the speaker. Benjamin puts the transmitter and the receiver on the same horizontal plane, way before technology was able to provide concrete means to connect these two poles in real time. Benjamin saw the seeds of the listener’s alienation in the broadcast communication (be it commercial, political, or educational) that was developing in Europe and in the rest of the world. The voicelessness and passivity typical of the broadcast model could be redeemed by a network–based idea of radio technology and by an educational approach that was horizontal rather than top–down (speaker and listeners as producers). Benjamin’s ideas are especially relevant today for their focus on listener feedback. The German philosopher grasped the distinctive quality of a fledgling electronically mediated society, namely its potential for public participation/production. Benjamin’s analysis is useful because it reminds us that social participation/production is not only a consequence of the wealth of the networks (Benkler, 2006), nor a new phenomenon rising from the spread of ICTs. The distance between media producers and their publics began to shrink with the development of new electronic media. Internet, and social network sites in particular, have finally provided the technological platform for a yet to be realised theoretical intuition. Benjamin’s frame of mind should be reassessed to thoroughly understand how the Internet is changing the relation between radio and its public. For the first time in the history of radio, its audience — once invisible, private, and passive — is being deeply transformed into public actors, visible, networked and audible, thanks to the stage offered to them by social networking sites, which we will now try to better understand using a dramaturgical approach.
Facebook: A dramaturgical approach
Social networking sites (SNS), such as Facebook, allow individuals to present themselves, manage their social networks and establish or maintain connections with others . Facebook provides a stage for people to present themselves, to show off and to indulge in “self–branding”, constructing and showing an image of themselves that they want to project (Tse, 2008), engaging in what Erving Goffman (1959) calls “impression management” and in “identity management” (DiMicco and Millen, 2007). In our view, to better understand SNS we should look at SNS users as performers and attempt to analyze SNS under a dramaturgical approach. Goffman’s so–called “dramaturgical approach” compares people’s everyday self–presentation to stage acting, where the performer plays a role for an audience in a front stage area and then retreats to a backstage where he will change back to a non–performer role. Goffman’s (1959) well–established model to analyse the performance of the self applies not only to face–to–face interaction, but also to asynchronous and real–time interaction on the Internet. According to Westlake (2008), while Goffman could not have predicted the dynamics of computer–mediated interaction, his model could work also in this new context:
|“While certain elements that Goffman defined as part of the ‘front stage’ are absent in computer–mediated interaction (visual cues such as clothing and facial expression and aural cues such as tone) they are replaced in chat and Web sites by more ‘staged’ elements such as font, photos, music, and graphics.” |
One of the reasons why self–presentation on SNS may be different from face–to–face is that online one may ‘inspect, edit and revise’  one’s self–presentation before it is made available to others; in a word, SNS users can refine and fine–tune their online image as many times as they want before acting in public. SNS provide users/performers with a refined set of strategies to control their own stage. Facebook is, as Alice Mathias (2007) writes,
|“an online community theater. We customize in a backstage makeup room — the Edit Profile page, where we can add a few Favorite Books or touch up our About Me section — we deliver our lines on the very public stage of friends’ walls or photo albums. And because every time we join a network, post a link or make another friend it’s immediately made visible to others via the News Feed, every Facebook act is a soliloquy to our anonymous audience.”|
As Crawford puts it, “On social networking platforms, users craft their self–image through a process of fabulation” . This process of fabulation is aided by the medium's asynchronicity. Asynchronicity gives people time to manage their self–presentations more strategically . Facebook users/performers employ a set of multimedia strategies to tell their story (multimedia storytelling) and to manage a self–presented image: text (status updates, personal notes and private messages), photographs (customized photo albums, homemade photos, photo tagging, profile photos), sound (audio clips such as SoundCloud songs, homemade music and sounds, links to online sound contents) video/music (YouTube music videos), video (YouTube/Vimeo/Dailymotion videos, homemade videos). The unseen audience of our SNS profiles (our friends list) works as a team in a performance where “dramaturgical cooperation”  is achieved in order to affirm each other’s performances. The phenomenon of “liking” contents posted on Facebook by our friends is an example of this dramaturgical cooperation. The activity of liking, according to a recent survey by Hampton, et al. (2011), is the most popular one among Facebook users. Twenty–six percent of all Facebook users indicate that they “like” contents contributed by another Facebook user at least once a day, with a peak of 44 percent among users who are 18–22 years old .
SNS users/performers need an audience to stage a presentation of themselves and the choice of the proper audience is based on the concept of what Goffman calls “audience segregation”. This concept refers to actions that are meant to prevent an audience presented with a specific role from witnessing another role played by the self–presenter. Goffman (1959) refers to this as “front region control.” “By keeping different targets away from one another, people can avoid the awkwardness of trying to present disparate images of themselves to two or more targets simultaneously.”  On Facebook, for example, users not only choose the proper audience by accepting or refusing a friend request, but they can also segregate their audience (their friends) into different groups and networks, making sure their posts and contents are available to different kind of audiences, i.e., making sure that different performances (notes, status updates, photos and videos) are addressed to different targets. As users are provided with a refined set of tools for “front region control” and “audience segregation”, SNS can be conceived as a tremendously effective surveillance tool: users (and brands) exploit SNS to learn more about their audience and maintain their existing relationships . Westlake calls it “performative surveillance” . The home page of Facebook is a perfect tool of surveillance and not surprisingly one of the most popular sections of the whole social network.
Drawing from this dramaturgical perspective, we might be able to better understand a useful concept coined by English sociologist Vincent Miller about communication on social media being of a ‘phatic’ nature:
|“Here (in the world of SNS) communication has been subordinated to the role of the simple maintenance of ever expanding networks and the notion of a connected presence. This has resulted in a rise of what I have called ‘phatic media’ in which communication without content has taken precedence.” |
The purpose of phatic communication is a social one, to express sociability and maintain connections or bonds . SNS are, according to Miller, a glimpse into a future media/communications world in which connection takes precedence over content . Social networking profiles push the networking practice to the forefront by giving more prominence to friends and links than to the text being produced by the author. The overall result of the rising popularity of SNS is, according to Miller, that
|“in phatic media culture, content is not king but keeping in touch is. A clear example of phatic media culture is the ‘smile’ emoticon published on her Facebook Wall by the world pop star Lady Gaga, 9 April 2012, that received 854 shares, 120,030 likes and 11,672 comments. More important than anything said, is the connection to the other that becomes significant. Thus the text message, the short call, the brief email, the short blog update or comment, becomes part of a mediated phatic sociability necessary to maintain connected presence in an ever-expanding social network.” |
In a word: the network is the message. The phatic side of communication on SNS underlined by Miller is nothing but a consequence of the use of SNS as a performative stage. On SNS, content producing is an audience–oriented activity. We need content because of our audience. Since we have an audience, we feel the need to provide it with new material. We produce content as a performative act. Producing/publishing contents (produced by others — links — or directly by ourselves) is the way we communicate ourselves on SNS. Every post — a new status, a note, a video, a link to an article or cause — says something about the person who published it.
Phatic communication on SNS shows that the core activity and the deep meaning of this kind of medium is networking. The emergence of a phatic media culture as theorised by Miller and the rising of a network society (Castells, 2000) contradict those sociologists who fear that computer–mediated communication may shape a generation of increasingly lonely individuals (Putnam, 2000; Turkle, 2011). Recent research suggests that CMC and the Internet do not replace more traditional modes of interaction; on the contrary, they strengthen traditional forms of sociability (Uslaner, 2004; Räsänen and Kouvo, 2007). Hampton, et al. (2011) recently reported survey results showing that Internet users had wider social networks than people who do not connect to the Web:
|“the more frequently someone uses the Internet, the larger his network tends to be. The average person who uses the Internet at home several times per day has a network of 732 ties, while someone who uses the Internet only once a day has a network of 616 ties. Users of MySpace (694 ties) and Facebook (648) have a statistically similar number of social ties. Users of LinkedIn (786) and Twitter (838) have significantly larger overall networks than Facebook users.” |
One recurring theme to emerge from much of this research is that most people, at least so far, are primarily using SNS to enhance their off–line relationships, not to supplant them: SNS provide a platform to put our social capital (off–line and online relationships) on stage.
Doing radio in the age of Facebook
Seventy years passed from the publication of Arnheim’s essay on radio to the invention of Facebook. In that famous book, Radio: An art of sound, Arnheim (1972) noted radio’s distinctive characteristic, the sightless nature of listening, the mutual invisibility between transmitter and receiver. As he wrote, “radio organises the world for the ear”. Arnheim was the first to praise radio specifically for its aural language, and to recognise the “blindness” of radio listening as an advantage rather than an impairment, a way to eschew the limitations of vision. A flight not from images themselves, but from the mechanisms of visual perception. Since Arnheim’s times, however, many things have changed and new inventions have been introduced: the transistor, telephone, Internet, broadband, satellites, iPod, blogs and SNS. Each one of these implants onto the radio machine’s body have generated a new hybrid and modified listening patterns. While it is still possible to tune into a radio set in the kitchen, as was the case in Arnheim’s time, this is nowadays a residual form of listening. Radio listening still maintains some elements of blindness, but the way in which we now experience this medium is no longer totally disembodied and immaterial.
The story of radio and its public could be told also as a story in which each technological stage corresponds to an increasing reduction of distance, a distance which is a function of technological innovation: at its peak in the first stage, marked by a total lack of feedback from the public, and at its lowest in the last phase, during which the public not only gives feedback but is also publicly and mutually connected. The following paragraphs are an attempt at summarizing the four stages of this “history of distance”:
First stage (1920–1945): An invisible medium for an invisible public
In this first historical phase radio, the new medium of the early twentieth century, is really, as Brecht maintained originally in 1932 (Brecht, 1964), an outdated device, used for political propaganda, for educational purposes and to spread consumer culture. In any case, no contribution on the public’s part is required, apart from the possibility of communicating with radio stations through the asynchronous medium of mail. The speakers are invisible (blindness represents the main feature of radio, according to Arnheim, 1972) and the communication model is only one: broadcasting, a one–to–many communication model. The public is also invisible and not audible. It is made up of individuals who are not linked in a network and who can only listen, without taking part in the conversation; they cannot publicly manifest their emotions or opinions to the speaker or the radio show. If they don’t like a show publics cannot express their comments, as Walter Benjamin (1931) underlined: “publics can do nothing but switch off the radio”.
The invention of focus groups (Stanton–Lazarsfeld Program Analyzer, 1937, as reported by Douglas, 2004) and of the first audience surveys makes listening habits measurable, but public sentiment remains undetected.
Second stage (1945–1994): An invisible medium for an audible public
This second stage is marked by the appearance of the transistor, which makes radio listening mobile, by the introduction of the telephone in radio’s productive practices and by the birth of underground radio (pirate radio and free radio, according to the definitions given by Hendy, 2001) in Europe during the 1960s and 1970s. Transistor, telephone and underground radio contribute significantly to blurring the lines between producers and listeners. In Paris, during the first days of May 1968, demonstrators reclaim radio strategically thanks to transistors in order to communicate and organise protests in the streets (Sullerot, 1968; Bonini, 2009); between 1959 and 1964 the pirate radio stations of baby boomers (listeners who are tired of the public stations in their countries and decide to create their own means of communication) are born in international waters off–shore from Holland, Denmark and the U.K. (Borgnino, 1997); in Italy between 1969 and 1975 (and in France between 1977 and 1981) hundreds of free radio stations (radio libere/radio libres) — unlicensed broadcasting stations — are created, shifting the balance of communication towards civil society (Lewis and Booth, 1990; Menduni, 2004). “In 1977 Felix Guattari proudly announced that the Italian free radio stations had succeded in creating the first electronic agora: the immense permanent meeting of the airwaves. The listeners were now broadcasters.”  The situationist dream of breaking down the boundary between media producers and consumers is (partly) coming true. Free radio station, as well as giving voice to sectors of society that were previously ignored, introduce a significant use of the telephone to communicate with their public. Audience participation through the telephone dates back to the mid–1940s for U.S. commercial radio stations (talk back radio format) and to the mid–1960s for European public radio, but free radios make the “talk radio/open microphone” format the distinctive feature of their communication model (Bonini, et al., 2006). The public of free radio stations is in part a productive one, it participates in a collective conversation, as Benjamin imagined in 1934. Listeners begin to take part in radio production, both by creating new radio stations and by using the telephone. The public is still not visible, but it has become audible. The opinions and emotions of listeners are becoming increasingly public, but not measurable. The possibility of connecting more than one telephone line to the radio mixer allows the presenter to speak to several listeners simultaneously, or to make them interact with each other horizontally, so that more people are involved in the radiophonic conversation (Pinseler, 2008). However a large part of the public — those not calling the radio — remains passive, private and not linked together.
Third stage (1994–2004): An invisible medium for a readable public
The technological innovations of this third phase are mobile telephones, text messaging, the World Wide Web, audio streaming, e–mail messages and subsequently blogs and podcasting. Mobile telephones further facilitate listener participation in the radio conversation. The possibility of calling the radio station from a public place with a mobile phone transforms the role of the audience: from private citizens to potential reporters, or citizen journalists. The public’s contribution to radio content production evolves and strengthens. Listeners begin producing information streams from the places in which they are calling from (traffic news, current affairs, local news, etc.). Caterpillar is a perfect example of this model: a radio programme born in 1997 and aired by Radio2 Rai, it transformed listeners living abroad as foreign correspondents.
Text and e–mail messages update the private relation between presenter and listener, until then based only on letters. The speed at which short digital texts can be transmitted thanks to text messaging and e–mail increases public feedback to radio stations. This increase in textual flows becomes an invaluable source of information for producers; the information, filtered and re–elaborated, is then transformed in new content ready to enter the radio flow. Software designed to manage e–mail and text messages enables radio stations to organise contents received by e–mail or text message in real time, to choose the most appropriate ones for the programme and to broadcast them a few seconds or minutes after receiving them. Thus both the spatial and temporal distance between producer and listener is reduced. The readability and real time access of text messaging and e–mail enhances the publicness of the public’s opinions and sentiments. The public is not only audible but also easily readable. Its emotions and opinions, however, still remain untrackable.
The invention of streaming technology (1995) and subsequently of blogs (1999) and podcasting (2004) further advance the move towards public participation in audio communication introduced by free radios in the 1960s and 1970s. Free radios were the first to shift the balance of emission from the institutions towards the individual. The encounter between radio and the Internet is another step forward in this direction, bringing this process of de–institutionalisation of communication to a completion. Netcasters, bloggers and podcasters do not limit themselves to participating in the radio flow produced by traditional broadcasters, but they create their own sound media. Web radio and podcasting are “bypass” technologies, allowing individuals to bypass the entire established radio industry (Dearman and Galloway, 2005). The radio studio has been outsourced: “radio” is wherever I can stream or record a podcast. Listeners (at least a small part of them) have become producers of themselves and online platforms like Mixcloud, Soundcloud, Audioboo, Spreaker, Jelli Radio and others perfectly embody this principle.
Fourth stage (2004–ongoing): A visible medium for a networked public
The rise of social networking sites (SNS) is the milestone of this fourth stage. SNS exist since 1997 (boyd and Ellison, 2007) but the social network that integrated better with radio has been Facebook (FB), created in 2004, followed by Twitter. The fans/friends/followers of a radio station’s or presenter’s FB or Twitter profile are a public which is very different from a traditional one: this is due to the specific characteristics of the medium and to a change in consumer culture brought about by the rise of the information economy. The traditional public of broadcasting media still fits the definition given by Gabriel de Tarde (1989), as Arvidsson underlines: “a public is a mediated association amongst strangers who are united by a however momentary affective intensity that is directed towards a common thing.” (a brand, a celebrity, a news story, a radio programme) (Arvidsson, 2013). The new public emerging from the hybridisation of broadcast and ICT technologies is more productive (Arvidsson, 2011) and networked.
Two brilliant examples of the emergence of the culture of co–creation in radio are the German feature programme Mehrspur, aired by public station SWR2, which, since 2009, asks listeners through social networks to take part into the production flow of their radio documentaries and the project Radio Ambulante, an online South American platform which produces radio documentaries through crowdsourcing tools. All these kinds of publics are networked.
Networked publics are publics that are restructured by networked technologies . These kinds of publics, according to danah boyd, all share four fundamental affordances that make them different from all the previous mediated publics: persistence, replicability, scalability and searchability . Persistence means that in SNS the public’s expressions are automatically recorded and archived. This means that feedbacks (opinions, feelings and comments) of every listener are public and since they can remain online for a long time they can also have a role in shaping the reputation of the radio station. Replicability means that the content produced in networked publics is easily replicable. Scalability in networked publics refers to the possibility of tremendous — albeit not guaranteed — visibility. This means that, for example, unique listeners commenting and talking about a radio show on its social network profile can reach a wide audience. Searchability means that content produced by networked publics can be easily accessed.
Each one of these four historical phases in the relation between radio and its listeners produces a different kind of public. To this day we can observe every day the overlapping of these different publics. The same radio listeners belong to different publics. The fourth phase, the networked publics one, is the last stage of a historical trajectory starting, according to Benjamin, with the invention of electric media. The distance between the authors of the radio message and its listeners has been increasingly reduced throughout the history of radio, almost disappearing with the emergence of networked publics. The affordances of networked publics gave rise to a series of fundamental changes in how the relation between radio and its public is conceived.
a) Change in the publicness of publics (more visible, more audible)
The presence of the public within radio programmes goes from zero grade — the telephone — which implies only the presence of a voice, invisible and disembodied, to the most advanced stage so far — Facebook — in which the public has a face, a name, a personal space for discussion (the Wall), a bio–cultural profile (the Info section), a collective intelligence (the Home Page), a General Sentiment (Arvidsson, 2011). It is the end of the public as a mass that is blind (it cannot see the source of the sound), invisible (it cannot be seen by the transmitter), passive (it cannot take part in the conversation) and insensitive (it cannot manifest its emotions towards the speaker). The implant of SNS on the body of the radio medium renders the immaterial capital made up by the listeners public and tangible. While until recently the public was invisible to radio and was confined to its private sphere except in the case of phone calls during a programme, today listeners linked to the online profile of a radio programme are no longer invisible or private (as underlined by Gazi, et al., 2011), and the same goes for their opinions and emotions. And if emotions and opinions are no longer invisible or private, they are measurable. For the first time in Radio history, listeners are not only numbers: their feelings, opinions and reputation are trackable and measurable through netnographic methods (Kozinets, 2010). To this end Arvidsson claims that “the remediation of social relations that has accompanied the rise of consumer culture has effectively managed to transform the nature of affect, from something private or at least located in small interaction systems, to something that acquires an objective existence as a value creating ‘substance’ in the public domain. Social media have taken this process one step further” (Arvidsson, 2013).
b) Change in the speaker–to–listener relation
The new communication model that derives from the short–circuit between radio and social media is a hybrid model, partly still broadcast, partly already networked. Radio is still a one–to–many means of communication. However, telephone already made it partly a one–to–one medium (phone interview) and many–to–one (open mic, phone talk radio); to this we have to add SNS, which are at once a one–to–one (chat), one–to–many (tweets, FB notes or posts), many–to–many (FB Home, Twitter hashtags), many–to–one (FB comments) kind of media. The mix between radio and SNS considerably modifies both the hierarchical/vertical relation between the speaker/presenter and the public, and the horizontal relation between each listener. Both types of relation are approaching a less hierarchical dynamic typical of peer–to–peer culture. When a programme’s presenter and one of his or her listeners become friends on FB they establish a bi–directional relation: both can navigate on each other’s profile, both can watch each other’s online performance and at the same time be an actor in it. They can both enact two types of performance, public and private: they can comment posts on each other’s walls or reply to each other’s tweets, send each other private messages or communicate by chat in real time. For the first time in the history of radio the speaker and the listener can easily communicate privately, far from the ears of other listeners, “off–air”. This gives rise to a “backstage” behaviour between presenter and listener that was previously unimaginable.
Up to now we have been talking about SNS without making any distinction between them. In the conclusion to this section it is important to highlight some differences, especially between the two currently most popular SNS, Facebook and Twitter. Business entrepreneurs Naval Ravikant and Adam Rifkin suggest that Twitter’s value is increased by the fact that Twitter is in part an interest graph, thus revealing more of the user’s behaviours than a purely friends–based social graph. Their notion of an interest graph describes a network that differs from a social graph in three important respects: it promotes one–way following rather than two–way reciprocal relationships; it is organized around shared interests, not personal relationships; it is public and not private by default. We suggest that Facebook fan pages — the most popular tool among radio makers — are a mix of an interest graph and a social graph. Listeners/fans of a radio programme on Facebook maintain quite the same communication potential as the listeners/friends of a radio programme, but radio makers cannot explore the profiles of their fans as they can do with their friends. The quality of information retrieved from the Facebook fans of a radio programme can vary from listener to listener and depends on the level of privacy set by every single listener. Moreover, private communication (backstage behaviour) between listeners/fans and radio makers is restricted to private messages, while the chat function is disabled.
c) Change in the listener–to–listener relation
At the same time, the relation between listeners is similarly changing. Fans of a radio programme can establish links online, exchange public comments on the programme’s wall, express more or less appreciation for specific contents, exchange contents on their personal walls, write each other private messages or chat with each other. The radio’s public has never been so publicised. While before SNS the concept of radio public was a purely abstract entity, which could be understood sociologically and analysed statistically, today this public is no longer only an imagined one (Anderson, 1991). People who listen frequently to a radio programme and are its fans on FB have the opportunity, for the first time, to see and recognise each other, to communicate, to create new links while bypassing the centre, in other words the radio programme itself. “The gatekeeping function of mass media is challenged as individuals use digital media to spread messages much farther and more widely than was ever historically possible” (Gurak, 2001). While a radio public is an invisible group of people who are not linked together, the SNS audience of a radio programme is instead a visible group of people/nodes in a network, connected by links of variable intensity which in some cases can produce strong links that transcend the broadcaster.
d) Change in the value of publics (SNS public: social capital = mass media public: economic capital)
This visible group of people/nodes/links is the most important new feature produced by the hybridisation between radio and SNS. A radio programme’s network of friends/fans on SNS represents its specific social capital (Bourdieu and Wacquant, 1992). While the wider (and invisible) radio public, as charted by audience rating companies, still constitutes the programme’s economic capital, the more restricted public of social media should in my view be considered the real social capital of a programme, a tangible and visible capital, the meaning of which is well explained by Bourdieu and Wacquant, when they define social capital as “the sum of the resources, actual or virtual, that accrue to an individual or a group by virtue of possessing a durable network of more or less institutionalized relationships of mutual acquaintance and recognition” .
There is however an ongoing discussion on the strength of links within online social networks. As Ellison, et al. (2007) have noted,
|“researchers have emphasized the importance of Internet–based linkages for the formation of weak ties (Granovetter, 1973), which serve as the foundation of bridging social capital, a term coined by Putnam (2000). It is possible that new forms of social capital and relationship building will occur in online social network sites. Bridging social capital might be augmented by such sites, which support loose social ties, allowing users to create and maintain larger, diffuse networks of relationships from which they could potentially draw resources (Donath and boyd, 2004; Resnick, 2001). Donath and boyd (2004) hypothesize that SNS could greatly increase the weak ties one could form and maintain, because the technology is well–suited to maintaining such ties cheaply and easily.” |
The definition of bridging social capital — a kind of capital better suited for information diffusion (Putnam, 2000) and made of weak ties which are loose connections between individuals who may provide useful information or new perspectives for one another but typically not an emotional support — seems to fit the kind of ties normally found on SNS. If we consider the networked public that forms around a radio programme its bridging social capital, we can expect this listener based network to produce, if not emotional and substantive support, then at least a certain amount of benefits in terms of news, tastes, information retrieval, cultural trends, comments and reviews. If we observe the SNS of the most popular radio programmes we will realise that this is already taking place: listeners anticipate/continue on SNS a discussion on the themes introduced by the radio show, adding comments, contents, links, references, quotations, suggestions. Moreover, the personal information and the public wall posts in the listeners’ SNS profiles can help radio producers to better understand who is hiding behind a comment or link, helping them to assess the reputation of the listeners/producers and consequently decide if they can trust them or not. The reputation (and trustability) of each single listener belonging to the network of a radio programme contributes to the general reputation of that specific networked public, and, due to the transitive property, it constitues the reputational capital of that radio programme. This reputational capital is of great value for radio producers, because, as Arvidsson (2013) puts it:
|“Reputation is the form social capital takes among strangers. The higher a person’s reputation, the easier for her to initiate processes, recruit talented co–workers. Finally reputation enhances the enjoyment of participation.”|
On the public stage of SNS reputation is conferred on an actor by the members of a public. Since on this stage radio producers and listeners can act at the same time as actors and audience, their reputation (both the producer’s and the the listener’s) is continuously being evaluated by the networked public. It is therefore in the radio producer’s interest to develop, nurture and take care of this reputational capital and to manage the establishment of a high quality and highly satisfied networked public. Ellison, Steinfield and Lampe showed a clear empirical relationship between a wealthy social network and the production of bonding and bridging social capital: the larger the network, the quicker the response from the friends; the greater the network, the greater the social capital produced (in terms of benefits received by the network) . Ellison, Lampe, Steinfield and Vitak clearly demonstrated that Facebook “enables individuals to: maintain a larger set of weak ties; make ephemeral connections persistent; lower the barriers to initial interaction; make it easier to seek information and support from one’s social network and to provide these resources to others.” 
For radio makers, a wide network of friends/fans is of great importance for their future. Even if the fans’ network does not generate a tangible economic value like the radio audience already does, it nevertheless generates a great reputational capital. The message of the SNS public of a radio programme is the network itself, because this network is able to produce value. The value embedded in the networked public is not already convertible into economic capital, but the crisis of traditional mass advertising will lead to a future increase and refining of tools for the capitalization of the wealth of networked publics linked to radio programmes and stations. Besides, building networked and productive publics for radio could be of strategic importance for public service media. Public service media are loosing audiences and legitimacy since they are abdicating from serving listeners as citizens (Syvertsen, 1999). Since making and participating mean “connecting” and creating social relations, as Gauntlett (2011) has brilliantly showed, building and nurturing wealthy and productive networked publics for public service media could be an opportunity to legitimize their service as a real public one, a service that provides listeners with tools to let them participate and create new social relations among each other.
e) Change in the role of radio author (from producer to curator)
Radio is increasingly becoming an aggregator, a filter for the abundance of information, useful especially for the non–prosumer listeners, who do not publish videos and have no time to explore friends’ profiles, which are a true goldmine to discover new trends. The radio author’s job thus resembles more and more that of a translator, of someone who connects two worlds — niches and mass culture — by delving into niches and re–emerging with a little treasure trove that can then be used productively. The producer’s function in the age of Facebook is thus to drag contents emerging from small islands, small communities and to translate and adapt them for the public of large continents, transforming them into mass culture. Radio authors and producers are becoming more and more similar to the figure of the curator, a cultural shift in the role of all kinds of author’s labour already noted by Brian Eno in 1991, as Reynolds (2011) reminds us:
|“Curatorship is arguably the big new job of our times: it is the task of re–evaluating, filtering, digesting, and connecting together. In an age saturated with new artifacts and information, it is perhaps the curator, the connection maker, who is the new storyteller, the meta–author.”|
Radio producers do not have to look for contents, as they did in the twentieth century. Contents come to them, they are “everywhere” (SNS Home Pages), producers merely have to take them. Their job is no longer to seek, but to select. They do not have to know everything, they only have to keep an eye out for interesting material and decide what to use and what to discard. This is how the value production process in radio works in the era of SNS: listeners enact their tastes online, the radio author (increasingly a producer, as Benjamin predicted) re–interprets and re–elaborates them, providing the audience with a dramaturgically constructed listening experience in which it finds its contents mixed together. Listeners comment and supply new material to the community of listeners/producers so that the process can start again.
Radio flow’s production process in the Facebook era is similar to that of mineral processing. The listeners/producers are the miners extracting the raw mineral (content in the shape of a brilliant comment, a note, a videoclip, an excerpt of a film taken from YouTube, a brand new SoundCloud song, a link to an article, etc.) that is then refined, processed, elaborated by the author/producer. The author/producer adds value to the content discovered by the listeners/producers by giving a dramaturgical shape to that content, by linking it to a complex architecture of sense based on dramaturgical rules (the radio programme). The author/speaker and the listeners are both producers of the programme: they cooperate, through SNS, on the design and the production of radio contents. As Castells noted, “Networks de–centre performance and share decision–making.”  Radio makers (authors/presenters/producers) and radio listeners, once they are connected through SNS, belong to the same horizontal and multipolar network. On the SNS stage everyone, radio makers and listeners alike, are able to perform, to take part, to alternatively play the role of the actor (contributing with contents) and of the audience (contributing with comments and liking).
As Benjamin hoped, the boundaries between authors and “readers” are, once and for all, broken down. The extent to which listeners take part in this production process is still controlled by radio makers, who give value to user–generated contents. Much has been written about the ambivalent status of this content as a source of both intrinsic reward and potential exploitation (Andrejevic, 2011). When can we still speak of co–creation and when does cooperation become free–labor exploitation (Terranova, 2000; Fuchs, 2010; Formenti, 2011)? Ippolita, et al. (2009) maintain that exploitation is embedded in SNS: “Herein lies the perversity of social networks: however radical they may be, they will always be data–mined. They are designed to be exploited.” Banks and Humphreys (2008) claim instead that the users clearly enjoy and benefit from online activities, even if they generate value for commercial Web sites. They suggest that user–generated contents should be understood in terms of mutual benefit (identity and reputational benefits) rather than of exploitation. The boundary between willing participation and commercial exploitation in the world of SNS is still blurred. However, although it raises some interesting points, exploitation theories do not in themselves explain ongoing changes, as Arvidsson and Colleoni (2012) argue.
To a certain extent, the attention required by traditional media of a passive public was already a form of exploitation and production of economic value: this was the late ’70s approach of Canadian media theorist Dallas Smythe (2001), who claimed that viewers were exploited as their viewing time was appropriated by media companies and sold on as “audience commodity”. The (passive) attention economy of old media publics is being updated and (partly) replaced by the (productive) reputation economy of networked publics, or “Like economy”, as Gerlitz and Helmond (2011) defined it, where value is determined by direct forms of user engagement. The new intimacy between radio and its public emerging with SNS is reshaping the notion of public and radio production practices. Whether this new intimacy is potentially liberating and democratic, in the direction indicated by Benjamin (“politicisation of art”), or a means towards a further exploitation is not only a question linked to the new social network platforms but can also be moulded and managed by human factors. Radio producers and listeners can use radio and SNS to engage themselves in a fruitful exchange of contents and build a more democratic and participative model of communication or, on the contrary, reproduce the old hypnotic, Pavlovian broadcast communication based on a master (media/radio/SNS) — slave (public/fan/follower) relation. To conclude, in my view the boundary between exploitation and co–creation is an ethical one: radio producers’ behaviour on SNS should be ethical, in the sense intended by Arvidsson (2013):
|“the ability to contribute to a public increasing its strength and vitality. In the case of productive publics this involves both technical brilliance (the traditional radiophonic skills, n.d.a.) and the ability to engage and confront with others (the listeners n.d.a.) producing transitory forms of communion.”|
This, Arvidsson notes, is quite close to the definition of virtue in the Aristotelian tradition, where virtue refers to those character traits that allow a person to be an excellent member of a community. This “ethical labour” (Coleman, 2005), even if not driven by altruistic reasons, should be preferable to an exploitative behaviour just because of its higher sustainability in the long term.
About the author
Tiziano Bonini, Ph.D. in media and public sphere from Siena University, is a researcher in media sociology at IULM University, Milan, where he teaches radio Theory. His last book, Così lontano, così vicino: Tattiche mediali per abitare lo spazio (Verona: Ombre Corte, 2010) is about migrants, media and the sense of ‘home’. He was one of the contributors of the recently published book Radio content in the digital age: The evolution of a sound medium (Angeliki Gazi, Guy Starkey and Stanislaw Jedrzejewski (editors); Bristol: Intellect, 2011). He also works as a freelance radio producer for Italian public and private national radio.
E–mail: tiziano [dot] bonini [at] iulm [dot] it
An extended and updated version of this paper will be published in T. Bonini and B. Monclus (editors), 2014. Radio audiences and participation in the age of network society. London: Routledge.
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Received 9 December 2012; accepted 2 May 2014.
This paper is licensed under a Creative Commons Attribution 4.0 International License.
The new role of radio and its public in the age of social network sites
by Tiziano Bonini.
First Monday, Volume 19, Number 6 - 2 June 2014
"The human right of a free press depends upon the human right of private property in newsprint."—Murray N. Rothbard 1
Is the radio spectrum a unique resource that belongs to the public, or can it be privately owned like any other good or service? Most people assume that public ownership is axiomatic—a starting point rather than the historical consequence of special interests pretending to misunderstand economics.
This is wholly incorrect. And given the mass clamor for wireless services, the full-scale privatization of this resource is essential. In this essay, I will review, from a Rothbardian perspective, the history, economics, and potential future of American wireless technology, and explain why we must abandon current policy.
Murray Rothbard made the following distinction between shallow and deep conspiracy theories: the shallow theorist asks cui bono?—who benefits?—and then assumes the hidden beneficiaries were responsible; the deep theorist also asks cui bono? but then looks for documentary evidence that the beneficiaries really were pulling the strings.
"Scholarship," Rothbard quipped, "is essentially confirming your early paranoia through a deeper factual analysis."2
So who benefits from the United States government's central regulation of American radio spectrum? One answer is clearly that the federal government itself benefits. Whenever allocation is moved from economic to political means, politicians will gain in a variety of ways: monetary and non-monetary, legal and extralegal.
And central regulation of any communications medium means that censors benefit from the political control they're denied under a private property regime. In 1974, FCC v. Pacifica Foundation (better known as the George Carlin "Seven Dirty Words" case) the Supreme Court decided in favor of "decency" restrictions in broadcasting, which for three decades now has "established the FCC as the largest censorship body in the world."3 (Of course, Janet Jackson has replaced George Carlin as the icon of broadcast indecency.)
Another beneficiary of regulation—obvious to free market economists but surprising to others—is the regulated industry itself. Through the phenomenon of "regulatory capture" the existing corporate interests use the regulatory body as a cartelizing agent. Not only does the regulatory body act as a barrier to entry, lowering competition and raising prices, but it also blocks innovations that might threaten industry leaders.
When FM was invented, the established AM broadcasters had the FCC suppress it, delaying its widespread use by decades. The same corporations made sure cable TV was a non-starter for yet more decades. AM and FM broadcasters lobbied to block Satellite Radio, claiming that the public interest demanded "localism," but National Public Radio lobbied to block the most "localist" radio option around: lower-powered FM micro broadcasters.
So there are our two candidates for a conspiracy theory: Big Government and Big Business.
If you think the censorship is limited to foul language and flashing, you might find the FCC's case history sobering:
In 1931, an Iowa broadcaster was denied renewal of his license because of his "bitter personal attacks on persons and institutions he did not like." The FCC wrote, "Though we may not censor, it is our duty to see that broadcasting licenses do not afford mere personal organs, and also to see that a standard of refinement fitting our day and generation is maintained." (We can't censor you, but we can keep you off the air?)
In 1940, the FCC established "The Mayflower doctrine" which threatened to deny renewals to any station that expressed political opinions. (In 1948 the Commission re-examined the Mayflower Doctrine. They agreed that their policies abridged political freedoms, but they insisted that this was necessary!)
In 1947, the New York Daily News applied for a broadcast license. The American Jewish Congress petitioned the FCC to deny the license because the Daily News had "evidenced bias against minority groups, particularly Jews and Negroes. . ." The FCC claimed to reject the application on different grounds, but as economist Ronald Coase would later comment, "What seems clear is that a newspaper which has an editorial policy approved of by the Commission is more likely to obtain a radio or television license than one that does not."
When Edward Lamb's license came up for renewal in 1954, the FCC charged him with having Communist associations, which he denied. In this case, the FCC did renew his license, but insisted that it needed "character and candor requirements" for licensing decisions, and that they had both the right and responsibility "to inquire into past associations, activities, and beliefs" of broadcasters.4
In the late 1960s, the FCC threatened a major radio station in Hawaii with non-renewal of their license. KTRG had been broadcasting libertarian programs for several hours a day for approximately two years. The legal costs for fighting the FCC's decision forced the owners to shut down the station permanently in 1970.5
Rothbard writes, "Can we imagine the outcry if the federal government were to put a newspaper or a book publisher out of business on similar grounds?"
He adds: "Because every station and every broadcaster must always look over its shoulder at the FCC, free expression in broadcasting is a sham. Is it any wonder that television opinion, when it is expressed at all on controversial issues, tends to be blandly in favor of the 'Establishment'?"
But, you might say, certainly corrupt politicians, zealous censors, and the phenomenon of regulatory capture aren't enough to require a conspiracy theory. Imperfect government isn't something we need malicious intent to explain, just human nature. Didn't the government need to step in to halt the growing anarchy of the airwaves?
Contrast these two versions of the mid-1920s:
"The chaos that developed . . . was indescribable. . . . Private enterprise, over seven long years, failed to set its own house in order. Cut-throat competition at once retarded radio's orderly development and subjected listeners to intolerable strain and inconvenience."6 —Charles Siepmann, Radio, Television and Society, 1950
"One of our troubles in getting legislation [to nationalize the airwaves] was the very success of the voluntary system we had created. Members of the Congressional committees kept saying, 'it is working well, so why bother?'"7 —The Memoirs of Herbert Hoover, 1952
There's the history of radio regulation, and then there's the history of the various versions of that history: there's what was perceived to be going on in the 1920s as it happened; there's how the story was revised into an official history by the 1950s (which is still the version most people know—if they know any version at all); there's how the official history was reinterpreted by free-market economists in the 1950s and '60s (the "error theory" of spectrum regulation), and then there's economist Thomas Hazlett's 1990 revision in the Journal of Law and Economics, which Rothbard would have praised as a deep conspiracy theory.
Before 1920, radio was used for point-to-point wireless telegraphy. The Navy sought legislation to put all wireless stations under the control of the federal government, but recognized "that such a law passed at the present time might not be acceptable to the people of this country."8
The Radio Act of 1912 reserved about half of the useable spectrum for the government. Private stations could use the rest, as long as they had a license from the Secretary of Commerce. These licenses were more like registration receipts than permits: the Secretary had no powers to deny or regulate licenses, nor to refuse renewal.
Radio voice broadcasts began in the US in November 1920, and within two years, there were 576 licensed broadcast stations.
In 1922, Secretary of Commerce Herbert Hoover initiated a series of annual radio conferences, attended by major broadcasters and orchestrated by the Department of Commerce. At the first such conference, L.R. Krumm of Westinghouse complained that it was "perfectly possible to establish a so-called broadcasting station for about $500 or $1000 initial investment." The programming from these upstarts consisted of "nothing but phonograph records, and that sort of station can interfere very disastrously with such a station as we are trying to operate." And just in case his meaning wasn't clear, Krumm added, "I believe 12 good stations, certainly a maximum of 15, would supply most of the needs of the country."
Hoover began to withhold additional licenses, claiming the need to prevent interference among broadcasters. A 1923 federal court case, Hoover v. Intercity Radio, denied him the authority to withhold licenses, but allowed the Secretary to select times and wavelengths so as to minimize interference.
For the next three years, Hoover continued to ration broadcasting licenses by assigning frequency, geographic location, and time of day (in keeping with the Intercity verdict), and even by refusing (in defiance of Intercity) to process new license applicants.
Hoover's annual broadcast conferences continued and in 1925 they outlined a policy agenda in which they advocated a "public interest" standard for licensing.
Later that year, the Secretary decided to stop issuing new licenses, arguing that the spectrum was completely filled. He invited a court challenge.9
The Zenith Radio Corporation—later Zenith Electronics—was unhappy with their assigned schedule and priority. (Hoover's assignment gave General Electric an override option on the allotted time granted in Zenith's broadcast license.) Zenith chose to ignore the restrictions on their license, and criminal proceedings were taken against them for violation of federal law.
In April, 1926— United States v. Zenith Radio Corp.—the court again denied Hoover the authority to regulate licensure and this time—contrary to Intercity—they explicitly denied him discretion over time and wavelength assignment as well. Because the Intercity and Zenith decisions conflicted, Hoover turned to the acting Attorney General of the United States for an interpretation of the law. The Attorney General declared that the federal government had no authority to define any rights to spectrum.
Hoover still had the option to appeal the Zenith decision, but he didn't. Given the energy and persistence with which he'd pursued his regulatory vision, it's important to ask why he didn't. What he did instead was issue licenses to all applicants, free of price and free of restrictions.
"Faced with open entry into a scarce resource pool," writes Hazlett, "a classic 'tragedy of the commons' ensued."10
Stations could now choose whatever frequency, geographical location, broadcast schedule, and amplification level they wanted.
This radio chaos (which our conspiracy theory would argue was a deliberate crisis created by Hoover to justify the nationalization of the airwaves) lasted less than a year.
The official history points to the Federal Radio Act of 1927 as the solution to the crisis. The Act established the Federal Radio Commission, which later became the Federal Communications Commission. The airwaves were declared public property and put under the guardianship of the Commission, which was given the authority to issue temporary licenses to those who were willing to broadcast "in the public interest"—just as the Big Broadcasters had proposed two years earlier.
Later historians, such as Charles Siepmann, quoted above, would claim that the nationalization was necessary because the free market had failed. But markets are based in property rights. The tragedy of the commons isn't a symptom of too much market; it is the result rather of not enough private property. All allocation of scarce goods will be most efficiently handled by the price system—so long as enforceable property rights are well defined.
And in the fall of 1926 the precedent for defining and defending those rights had been established in an Illinois court: Tribune Co. v. Oak Leaves Broadcasting Station. Writes Hazlett, "the classic interference problem was encountered, litigated, and overcome, using no more than existing common-law precedent."
The Chicago Daily Tribune, calling itself WGN—"World's Greatest Newspaper"—broadcast entertainment as a means of marketing its publication: each day's edition listed that evening's programming.
WGN filed a complaint in state court against another radio station, Oak Leaves, which had begun broadcasting in an adjacent wavelength. WGN claimed that it was necessary to maintain at least a fifty-kilocycle separation between stations located within 100 miles of each other. They accused the Oak Leaves station of injuring their lawfully acquired business property.
Chancellor Francis S. Wilson decided the case wholly within the legal tradition of property rights in common resources. His landmark decision, which established homesteading rights in "the ether," found precedent in western water rights, among other established property traditions. Wilson concluded the court was "compelled to recognize rights which have been acquired by reason of the outlay and expenditure of money and the investment of time. . . . We are of the further opinion that, under the circumstances in this case, priority of time creates a superiority in right. . . ."11
So the official history has it exactly backwards. The free market didn't create a crisis that the government solved. The government created the crisis and the assignment of property rights was about to fix it. And as soon as the government realized this, they rushed in to keep the private solution from happening:
The Congress responded to Oak Leaves instantly. After years of debate and delay on a radio law, both houses jumped to pass a December 1926 resolution stating that no private rights to ether would be recognized as valid, mandating that broadcasters immediately sign waivers relinquishing all rights, and disclaiming any vested interests. The power to require such was the interstate commerce clause, but the motive was that Congress was nervous that spectrum allocation would soon be a matter of private law.12
"It is conventional among economists to be polite, to assume that economic fallacy is solely the result of intellectual error."—Murray N. Rothbard13
One of the strangest aspects of the official history is the complete economic illiteracy required to accept it. According to the official history, cited later by the Supreme Court, the reason the airwaves were declared public property and required central regulation "in the public interest" is that radio spectrum is a scarce resource.14
Even ignoring for now the artificial scarcity created by the government itself (by claiming the bulk of useable spectrum for the military, by refusing to expand the broadcast band, by suppressing FM and other more efficient technologies, by removing any economic incentive to efficient innovation, etc.), how is scarcity a justification for taking a resource out of the price system?
The economic definition of scarcity is this: when the price of a good is zero, demand exceeds supply. Only if the supply of free goods exceeds the demand for free goods do we say those goods are not scarce.15
The price system is that which balances supply and demand for scarce goods. If property rights are defined and enforceable—and we see that in the Oak Leaves decision they were starting to be—then pricing will serve not only to allocate scarce resources, but will promote the very future innovations needed to make a resource less scarce.
If the demand for apples goes up, apple producers—both established growers and newcomers drawn by rising prices—will grow and sell more apples, driving prices lower. Those who can produce apples most efficiently will profit the most, promoting efficient apple growth.
This works for fixed resources as well: if the demand for land goes up, driving up the price for land, developers will find ways to build on land that was considered "un-developable" only recently. They will move into the third dimension, build taller buildings or underground complexes to house more people in less acreage. They will even create artificial islands and peninsulas to increase the supply of land.
For any resource, the physical supply is only one factor in determining the economic supply. If you can create gasoline engines that get the same power from half as much gas, the economic supply of petroleum has effectively doubled.
Changes in technology affect the balance of supply and demand, and with less interference in the market, the increase in supply tends to outpace increases in demand. There is nothing in the nature of radio waves that makes them an exception.
History Redux: Undoing the "Error Theory"
"In general, I urge everybody to look at a government measure . . . not in terms of a tragic failure to achieve the common good, public interest, or general welfare, but [rather] as a conscious agency for doing all sorts of monopolizing, cartelizing, and other restrictive things. In other words, the government is not that dumb!"—Murray N. Rothbard16
In 1934 the Federal Radio Commission became the Federal Communications Commission, and Congress added to its charter the regulation of telephone and telegraph industries. Clearly the scarcity of radio spectrum was no longer the justification for its existence, though that excuse would still be used in later court cases.
After World War II, commercial television was born. The established AM broadcasters became the established TV broadcasters, so the FCC had to allocate new frequencies.
In 1951, Leo Herzel, a law student at the University of Chicago, first proposed, while commenting on the allocation of VHF channels for color TV, that auctioning frequency channels to the highest bidders would be better than the FCC's established methods of political allocation. He wrote, "The most important function of radio regulation is the allocation of a scarce factor of production—frequency channels. The FCC has to determine who will get the limited number of channels available at any one time. This is essentially an economic decision, not a policing decision."17
Dallas Smythe, former chief economist for the FCC, wrote in response to Herzel, "Surely it is not seriously intended that the non-commercial radio users (such as police), the non-broadcast common carriers (such as radio-telegraph) and the non-broadcast commercial users (such as the oil industry) should compete with dollar bids against broadcast users for channel allocations."
Herzel replied, "It certainly is seriously suggested. Such users compete for all other kinds of equipment or else they don't get it. I should think the more interesting question is, why is it seriously suggested that they shouldn't compete for radio frequencies?"18
Ronald Coase, later to win a Nobel Prize and become the founder of Chicago School legal theory, was not originally convinced by Herzel's suggestion. But he found Smythe's response so unpersuasive—"if this was the best that could be brought against his proposal, Leo Herzel was clearly right"—that Coase adopted the pro-auction position for which he became famous in legal and economic circles.19
In 1959 Coase published the landmark article, "The Federal Communications Commission," in the Journal of Law and Economics. After expressing serious concerns about First Amendment issues under central regulation of the airwaves, Coase reviews the early history of broadcast radio, including the Oak Leaves decision and the federal government's response. He cites Professor Siepmann's version of the history—"Private enterprise, over seven long years, failed to set its own house in order"—but Coase concludes that the government and its historians based their regulatory views "on a misunderstanding of the nature of the problem." He goes on to present the argument for an efficient market based on property rights in radio spectrum.
In other words, the government and its historians have the problems right, but get the solution wrong—central planning and regulation are inferior to the price mechanism. Nothing in the nature of radio defies property rights. "The problem of radio interference was examined by analogy with electric-wire interference, water rights, trade marks, noise nuisances, the problem of acquiring title to ice from public ponds, and so on." So, asks Coase, "If the problems faced in the broadcasting industry are not out of the ordinary, it may be asked why was not the usual solution . . . adopted for this industry?"
Thomas Hazlett, publishing 31 years later in the same journal, calls Coase's implied answer the "error theory" of history: Herbert Hoover and the US Congress had their hearts in the right place, but didn't have the economic literacy to realize they were making the situation worse.
If the regulators hadn't had economic literacy back in the 1920s, they weren't doing much better in 1959. The FCC invited Coase to present his proposals to them. Their first question: "Is this all a big joke?"20
But while the government dismissed Coase's auction proposals, his article started a small revolution in the academy, where the power of property rights and free pricing was treated as a radical new idea. (This while Ludwig von Mises was being called "a Neanderthal" for his free-market positions.)
Not only were Coase's proposals not new in the larger economic context, they weren't even new in the specific context of radio. A quarter century earlier, before the seizure of the airwaves, the American Economic Review had already seen homesteading and enforced property rights as the solution: "Are we not simply dealing with space in a fourth dimension? Having reduced space to private ownership in three dimensions, should we not also leave the wave lengths open to private exploitation, vesting title to the waves according to priority of discovery and occupation?"21
In 1969 economist Arthur DeVany, working with engineers and legal experts, put together what Murray Rothbard called "The best and most fully elaborated portrayal of how private property rights could be assigned in radio and television. . ."22 The irony, given Rothbard's enthusiasm for the proposal, is that the authors wrote it "while consultants to the staff of the President's Task Force on Communications Policy."23
If DeVany and company were disappointed that their proposal to the government was ignored, then they were operating under the delusion of Hazlett's "error theory of federal licensing," which "holds that government frequency assignment, while logically uncompelling as a solution to the common property problem in spectrum allocation sans property rights, was a logical—if naive—response to a series of regulatory events that occurred in the early days of commercial radio broadcasting."
But, says Hazlett, "The fact [is] that the policy debate was led by men who clearly understood—and articulated—that interference was not the problem, interference was the opportunity." With more documentary evidence than I can include here, Hazlett concludes his revision of early radio history by claiming that with all its cartelizing consequences, its twisting of the First Amendment, and its suppression of technological advance, the government appropriation of the spectrum "was not a reflection of technical incompetence but of self-interested rationality."24
Economics Redux: Rothbardian Property Theory
"There is no existing entity called 'society'; there are only interacting individuals. To say that 'society' should own land or any other property in common, then, must mean that a group of oligarchs—in practice, government bureaucrats—should own the property, and at the expense of expropriating the creator or the homesteader who had originally brought this product into existence."—Murray N. Rothbard25
Before we address the question of privatization—the transition from government-held resources to privately held property titles—we need to address the more basic question of private property itself. Specifically, how does legitimate property come into being?
Strictly speaking, economics has nothing to say on the legitimacy or illegitimacy of property. As a value-free science (which Ludwig von Mises insisted it is) economics is the study of cause and effect in the realm of human action. The Austrian School does this through the deductive, or praxeological method, while mainstream economists claim to study the question empirically. The desirability of the effects and the legitimacy of the causes are questions left to esthetics, psychology, and moral philosophy. Without prescribing values, Mises considered it obvious which outcomes rational individuals would seek, given an understanding of cause and effect in the economic sphere.
Mises's student, Murray Rothbard, did not share Mises's confidence that informed rational individuals would make peaceful choices and he was quite willing to integrate individualist ethics with Misesian economics. Thus it is Rothbardian property theory to which we turn in our inquiry into the legitimacy of ownership.
If bandits ride into a village and take over, they will certainly act as if they now own the village, but clearly violent confiscation can't have created legitimate property. We would say that the village had been stolen—taken, in other words, from the legitimate owners: the villagers. But to agree that the villagers are the legitimate owners, no matter what the de facto situation, is to leave open two vital questions: we still don't know how the villagers became the legitimate owners, and more fundamentally, we haven't addressed the question of who can legitimately own property—the individual or a collective.
Despite all the political language to the contrary, there is no rights-bearing entity called "society." Neither can a collective entity called "the villagers" have legitimate property rights. When we speak of the villagers as the legitimate owners, we use the collective noun for linguistic convenience. It's easier than saying Villager 1 owns village subsection A, Villager 2 owns village subsection B, etc.26
The individual members of a group can hold divisible property titles to a single piece of property, but we'll come back to that later.
Homesteading: Rothbard versus Locke
Rothbardian property theory borrows from the common law tradition, which found its most famous expression in the writings of John Locke: unowned land becomes private property when an individual "mixes his labor" with the land, such as a farmer clearing a field, or anyone building a house on previously unowned acreage.27
This "homesteading" is the first legitimate way to acquire property. The only other way is through voluntary exchange with legitimate property owners.
Where Rothbard takes issue with John Locke's homesteading theory is in the "Lockean Proviso" which would restrict a homesteader's property rights to only those appropriations that leave "enough and as good" for others. Rothbard calls this Locke's "unfortunate proviso" and demonstrates that taken literally, the restriction disallows all private property, since it will be impossible, no matter how little one takes, to leave "enough and as good" for others.28
Property Units: Rothbard versus Common Law
Rothbard's main departure from common law tradition is his disagreement with the common-law principle "that every landowner owns all the airspace above him upward indefinitely unto the heavens and downward into the center of the earth. In Lord Coke's famous dictum: cujus est solum ejus est usque ad coelum; that is, he who owns the soil owns upward unto heaven, and, by analogy, downward to Hades."29
But according to Rothbard, the ad coelum rule never made any sense in the context of homesteading: "If one homesteads and uses the soil, in what sense is he also using all the sky above him up into heaven? Clearly, he isn't."
If land property doesn't legitimately extend forever upward and downward, then how far does it extend? Even before facing this question, we need to confront the more immediate problem of the size of the area to be homesteaded. Can I fence off an arbitrarily large area of unowned land and claim it as new property? And what does any of this have to do with radio spectrum? The answer to all three questions lies in Rothbard's concept of the relevant technological unit.
Relevant Technological Unit: Rothbard versus DeVany, et al.
"In a certain sense the development of radio has opened up a new domain comparable to the discovery of a hitherto unknown continent. . . . And private interests are trying to obtain control of wave lengths and establish private property claims to them precisely as though a new continent were opened up to them and they were securing great tracts of land in outright ownership."—Mr. Walter S. Rogers30
If A uses a certain amount of a resource, how much of that resource is to accrue to his ownership? Our answer is that he owns the technological unit of the resource. The size of that unit depends on the type of good or resource in question, and must be determined by judges, juries, or arbitrators who are expert in the particular resource or industry in question.
What is a technological unit? It is the minimum amount necessary (in whatever relevant dimension) for the use of the property, "enough of it so as to include necessary appurtenances." This unit will vary according to the uses the owner has in mind, and the features of the resource being homesteaded. Rothbard's own example is immediately helpful to us:
For example, in the courts' determination of radio frequency ownership in the 1920s, the extent of ownership depended on the technological unit of the radio wave—its width on the electromagnetic spectrum so that another wave would not interfere with the signal, and its length over space. The ownership of the frequency then was determined by width, length, and location.31
The concept of the technological unit answers another question that sometimes comes up in discussions of private property: if your radio signals enter my home, uninvited, have you committed a trespass against my property?
Frank van Dun, writing in a different context: "Murray Rothbard wisely cut short such an interpretation by insisting that 'property' is a praxeological, not a physicalist concept. Consequently, one's property is only in 'means of action,' not in things as such."32
Thus the Rothbardian concept is radically different from how we're used to thinking about property. It is not a physical object, nor a rigidly defined spatial boundary; it is "not in things as such," but an exclusive claim to the use of a scarce resource, a claim to the means of human action.
It happens that with solid objects and land property, the physical concept and the praxeological concept yield similar results. There isn't much practical difference between my ownership claim to a chair and the claim to exclusive authority over use and disposal of that chair.
It isn't until we confront questions of common resources, such as air, water, fish and game, oil, electricity, and radio waves that we're forced to shift from an object-based view of property to a priority-of-use conception of the problem.
Some important ways in which Rothbard's technological unit differs from the ad coelum physical/spatial conception of property:
My land property isn't violated by radio transmissions crossing its borders, nor by airplanes passing overhead, so long as neither one affects my use of my land.
If my neighbor builds a factory on his property, any pollution, noise, vibrations, etc. that affect my use of my property count as trespass and he has to either stop or compensate me, at my discretion, but the physical trespass is not sufficient to be property trespass; neither is physical trespass necessary: if my business depends on wind or sunshine, a new neighbor's obstruction of those things will count as a violation of my property.
If my neighbor drills for oil in his back yard and finds an untapped pool that extends under my land, I have no claim to the oil, so long as his drilling doesn't disrupt my use of my property. If I tap into that same oil deposit, I am violating his property. But I can drill down into non-contiguous deposits next to his and they become my property even if they extend beneath his land.
DeVany, et al., did not use homesteading in their proposal to the presidential commission. Neither did they accept the Rothbardian theory's implications for trespass. Their understanding of property rights is Coasean, which we'll come to in the next section. But where their proposal is relevant to Rothbardian privatization is in their detailed proposal for the relevant technological unit of broadcast property. They call their units "TAS packages," where TAS stands for Time, Area, and Spectrum, meaning: (T) when a transmission is allowed, (A) in what geographical area it may exceed a certain power, and (S) at what frequency.
Their proposed TAS units are similar to the homesteading rights recognized in the 1926 Oak Leaves court case, with one notable difference. In the early days of broadcast radio, few stations transmitted 24 hours a day. If the ABC Company used a certain frequency in New York between midnight and noon, the XYZ Company was free to homestead the same frequency between noon and midnight. The market process was already leading toward 24-hour-a-day spectrum rights, because the ABC companies would often buy out the XYZ companies. But time was definitely considered one of the homesteadable dimensions in spectrum property. DeVany's proposal is for all spectrum property to be defined at first as all-day and in perpetuity, although the owner of a TAS package would then be free to sell the rights to a fraction of his broadcast day.
So should a property title in radio spectrum start as an all-the-time right and break apart, as necessary, through the market process, or should time be a homesteadable dimension from the outset?
Contrary to DeVany, et al., the homesteadable unit is however much of the resource is necessary to the initial use of the homesteader. If I transmit a traffic report on an unused frequency at the beginning and end of the workday, but never use the channel at midnight, then you will not be trespassing by using "my" channel at midnight.
And if you transmit on a certain channel 24 hours each day, and I manage to encrypt a signal on the same channel in such a way that it doesn't interfere with your transmissions, nor with the reception of your listeners, I have not trespassed any more than my neighbor trespasses by taking unclaimed oil reserves from beneath my yard.
The DeVany proposal is an attempt to design a market, at least at its inception. The FCC should, according to DeVany, auction saleable, divisible TAS packages to the highest bidders and let the market work from there. Rothbard admired the proposal enough to recommend it to his readers—and it's certainly better than the status quo—but a true free market in legitimate property titles would have to evolve from the homesteading bottom up, not from a presidential commission down.
Getting the technological unit wrong can have devastating consequences, and there's already historical precedent for having the wrong unit statically defined in Washington.
In 1861, US federal land law provided a homesteadable unit of 160 acres. Anyone who, over a certain term, cleared and used 160 acres previously held by the federal government became the recognized owner of that property. This may have been the correct unit for the wet, arable lands of the East, but when settlers reached the dry prairie, 160 acres was far too little for any viable ranching or grazing.
The federal government refused to expand the 160-acre unit to allow the homesteading of larger ranches out West. As a result, the unowned grasslands were used and overused with no title ownership. The famous "open range" of cowboy stories was in fact a tragedy of the commons, with cattlemen grazing too early in the season, no one wanting to risk the wait since everyone else could continue to graze early. Neither was it in anyone's interest to restore or replant the grass, since there was no legal way to keep a second man from reaping what the first man had sown.33
To avoid repeating the error of grassland history, we should reject any centrally mandated, static definition of the property unit, no matter how informed and considered the definition seems to be. Instead, DeVany's TAS package proposal should be treated as an amicus brief to the civil courts that will have to settle property disputes in radio spectrum.
Trespass: Rothbard versus Coase
"Current free-market economics is all too rife . . . with scorn for ethics, justice, and consistent principle; and with a willingness to abandon free-market principles at the drop of a cost-benefit hat. Hence, current free-market economics is generally envisioned by intellectuals as merely apologetics for a slightly modified status quo, and all too often such charges are correct."—Murray N. Rothbard 34
In 1960, a year after his groundbreaking article on the FCC, Coase published "The Problem of Social Cost," for which he would later win the Nobel Prize.35
In his paper, Coase presents the paradigm of what would become Chicago School legal theory. If a farmer's wheat fields are next to the railroad tracks, and sparks from a passing train set the wheat on fire, has the train company committed a trespass, and if so, what actions can be taken against them?
Different legal theorists might come up with different answers, but before Coase, the answers would likely have been rights-based. The Coasean answer is not based in property rights per se but rather in the concept of social cost.
For Coase, the answer to the sparks and wheat conflict is whatever resolves the problem at the least cost. You might ask, cost to whom? Coase's answer: cost to society.
We are dealing with a problem of a reciprocal nature. To avoid the harm to B would inflict harm on A. The real question that has to be decided is: should A be allowed to harm B or should B be allowed to harm A? The problem is to avoid the more serious harm.
In other words, it is not only the case that the mugger harms me if he takes my wallet, but also that I harm the mugger if I keep him from doing so. The question of social cost is: does the thief gain more than the victim loses? If so, then society benefits from the mugging. If not, then society is hurt by the mugging. Any claim I might make that the wallet is mine by right is irrelevant to the question of social cost: "The comparison of private and social products is neither here nor there."
We might go on to say that the mugging has negative costs beyond the immediate context, that society loses out if I now divert critical energy into protecting myself from muggers, or if the location of the mugging develops a bad reputation and business is harmed. But the cost-benefit analysis is to be done in a value-free, utilitarian calculus, without any interfering concepts of right or wrong.
"When an economist is comparing alternative social arrangements, the proper procedure," according to Coase, "is to compare the total social product yielded by these different arrangements."
So if the farmer can move his crops out of spark range at an annual cost of a thousand dollars, while the spark suppression system would cost the train company two thousand, then there is a thousand-dollar "social cost" to ruling in the farmer's favor. In other words, "society" spends twice as much if the farmer wins.
Of course, minimizing social cost does not require an all-out victory or defeat for either side. The train company can pay the farmer $1,000 each year to compensate for the unplanted crops. Or they could split the difference. Who pays how much is irrelevant to the question of social cost, however relevant it may feel to the farmer.
The Coasean theory may not have found full expression until the mid-twentieth century, but British courts ruled according to similar reasoning in the previous century, when English farmers brought action against the new factories that were dumping soot on their crops. The court recognized the farmers' common law property right to stop the pollution, but found instead that "society" needed the new factories too much to rule against the polluters.36
Rothbard, of course, rejects the entire social cost theory. There is no cumulative "cost" borne by "society"—there is only the cost to individuals. You can't sensibly add my pain to your pain and deduce a measurable sum called our pain. Same with pleasure. Same with value. Same with costs.
According to Rothbardian property theory—and yes, he realized he wasn't being value-neutral—the solution to the case of the train company and the farmer has everything to do with who was there first. If the farmer's crops have been growing on that same acreage for decades, and the railroad company acquired the neighboring property only a few years ago, then the trains' sparks constitute trespass. If, on the other hand, the farmer knowingly acquired property next to the railroad tracks and decided to plant his crops within spark range, he has to bear the cost of that decision himself.
This difference in property rights theory becomes relevant in the DeVany proposal in the section called "Intermodulation interference":
The phenomenon of intermodulation has no close parallel in other resources. It occurs when radio signals transmitted on two different frequencies cause interference to an operator using the same time and area combination but a third, distinct frequency.
For example, suppose radio operators D, E, and F locate their transmitters on the same mountain and serve roughly the same area. Assume that operator D transmits at a frequency of 100 MHz, operator E at 150 MHz, and operator F at 250 MHz. It is possible that D's and E's signals will combine via intermodulation to interfere with F's signal even though F's equipment is tuned to transmit and receive signals at 250 MHz only.
The DeVany proposal defines TAS property rights such that the resolution of conflicts will minimize Coasean social costs. Because operator F has the right to transmit at 250 MHz without interference, either D or E must bear the costs of correcting the problem. The DeVany solution is to hold responsible whoever's transmitter has combined the two signals since this leads to the cheapest fix.
This calculation is entirely alien to Rothbardian property rights. As Chancellor Wilson concluded in the Oak Leaves case, "priority of time creates a superiority in right. . ." The relevant question is: who was there first, and who was there last? If radio operator F is the newcomer, then he has to either bear the direct costs of overcoming the intermodulation or to make voluntary arrangements with D and E to transmit at his preferred frequency.
Auction: Rothbard versus Herzel
When, in 1951, Leo Herzel suggested that the FCC should auction broadcast licenses to the highest bidder, the immediate issue was which of two technologies should be used to transmit color television. CBS proposed one technology and RCA proposed another. Herzel realized that the answer was better found through the efficiencies of market processes than through the central planning of a regulatory body. Let the broadcasters bear the full costs of their technological choices.
There are, however, many problems with the auctioning of licenses, as we see in the case of mining on public lands. If a license gives a mining company exclusive access to certain metal deposits for the next 5 years, the incentive to the licensee is to extract as much metal as profitably possible within that 5-year period. There is no incentive to conserve resources and no incentive to preserve the mining site or to make capital investments past the 5-year window. (This is better than the open-range scenario. It's not a full tragedy of the commons. But the situation has more in common with the commons than it does with private property.) As the license expiration date approaches, the incentive to extract grows larger and the incentive to preserve and invest approaches zero.
Both the optimal conservation of resources and the optimal development of capital structure result from the user of a resource owning the title to its long-term capital value.37
To take an example more familiar to most of us: we'd expect a homeowner to take better care of his residence than we would a renter. Not only will the owner take greater care to preserve the structure now, but he'll also make investments toward the capital value (and thus resale value) of his property. The renter, in contrast, cares for his residence only within the boundaries of his own short-term comfort and his legal liability to the landlord.
If an auction is to promote market efficiency in a resource, the items auctioned should be full property titles, not licenses.
In 1998 Leo Herzel published "My 1951 Color Television Article" in the Journal of Law and Economics.38 In it, he qualifies his support for auctions:
Unfortunately, FCC license auctioning has been adopted for the wrong reason, to raise revenue for the government. My main concern in my color television article was to attain better allocations and uses of FCC licenses, which I still think is the right concern. Auctioning was a convenient means to this end.
Arthur DeVany is exactly right when he says ... about my color television article that I did not think auctions were all that important and that what mattered most to me was the package of rights and obligations that were auctioned. ... As I have explained, I wanted to give FCC licensees the right to choose their own technology for the transmission of color television signals. I chose auctions as a simple, efficient way to achieve this property right.
But is an auction—even an auction in full property rights—an acceptable solution?
. . . why does the government deserve to own the revenue from the sale of these assets? After all, one of the main reasons for desocialization is that the government does not deserve to own the productive assets of the country. But if it does not deserve to own the assets, why in the world does it deserve to own their monetary value?39
So how do we privatize the airwaves? If the spectrum confiscation were a recent development, the first answer would be to return the stolen property to its rightful owners or their heirs. When Rothbard wrote about post-Communist desocialization in 1992, it was still possible to do that in Eastern Europe, but probably too late in Russia. With regard to broadcast properties, it is probably now too late in the US as well, though the heirs of the earliest broadcasters should be given a chance to reclaim their airwaves.
A second option is to issue each citizen a marketable share in the newly privatized resource. Rothbard rejects this option for two reasons: (1) while the idea is simple, the logistical complexity of implementing it is huge, leaving plenty of room for abuse and the discrete preservation of political privilege; (2) ". . . there are grave philosophical problems with this solution. It would enshrine the principle of government handouts, and egalitarian handouts at that, to undeserving citizens. Thus would an unfortunate principle form the very base of a brand new system of libertarian property rights."40
Still, there is a certain appeal to Boris Yeltzin's defense of the (never fully implemented) egalitarian solution: "What we need is millions of property owners, not merely a handful of millionaires."41
But Rothbard's solution is both philosophically consistent with the rest of his libertarian property theory and also has the virtue of creating a "people's capitalism" without resorting to egalitarian handouts. Government-seized resources are not legitimately owned. If there is no legitimate owner, then the would-be property is, philosophically speaking, unowned. And unowned property is available for homesteading. A complete, widespread, diverse privatization requires only that we treat government-held property as abandoned property. In the post-Soviet desocialization, this would have left the workers in charge of their factories, farms, offices, etc.
This may sound like the collective ownership espoused by early communists, but the similarity is in the language and not in the specifics of implementation. Since there is no rights-bearing collective entity, there can be no legitimate collective ownership, only a collection of individual owners. If 100 workers become the homesteaders of a factory, then they each hold a 1% marketable share in the factory's property title. If similar arrangements hold for all the other farms and factories, etc., then the marketable shares quickly form the basis of a new stock market and a radical readjustment from a less efficient capital structure to one that optimizes the production of wealth.
What's the equivalent scenario under a desocialized spectrum? Current de facto users of frequencies become de jure owners of property titles to those frequencies. This is as true of the FM micro broadcasters and "radio pirates" as it is of FCC-approved Big Broadcasters.
There is something unsatisfying in a revolution that leaves the same protectionist corporations in charge of their current broadcast channels, but keep three things in mind: (1) they would no longer enjoy the political privileges of the FCC's protection; (2) their competition will blossom into a diverse array of interests and market models—educational and commercial, for-profit and non-profit, broadcast and point-to-point, etc.; (3) the consumers will finally be in charge. Any Big Broadcaster who survives the fallout will have earned the right to continue broadcasting. While post-governmental homesteading would produce results less just than initial-appropriation-based homesteading, undoing a century of history is not an option. Homesteading is the best of the strategies left to us.
Government Spectrum: Rothbard versus Everyone
How much of the spectrum should be privatized? All of it. Even the vast "beachfront property" held by the military? Yes, all of it.
As radical as this sounds, it was the position held half a century ago by both Herzel and Coase, although their vision of privatization was different from Rothbard's, and their preferred size for a surviving government was much larger. Recall that when the FCC's former chief economist said in disbelief, "Surely it is not seriously intended that [government agencies] should compete with dollar bids against broadcast users for channel allocations," Leo Herzel replied, "Such users compete for all other kinds of equipment or else they don't get it." Coase agreed that the most "socially" efficient use of spectrum could only result by requiring the various government agencies to bid against each other and against private bidders in an open auction. Coase doesn't mention the Austrians, but he must have been influenced by Mises and Hayek: without prices, there is no rational calculation. The military's outright appropriation of so much spectrum caused massive waste and inefficiencies—with all the accompanying "social cost."
But the government doesn't bid with its own money. It uses the money taken from private interests (through direct taxation or the indirect tax of inflation) to bid against those same private interests for scarce resources. There are limits to how much the government can take without bringing the entire economy down, but those limits are nothing compared the practical limits facing any individual private investor.
This is where Rothbard parts company with economic conservatives, classical liberals, and libertarian minarchists. So long as the State holds a territorial monopoly on force and involuntary taxation (which is the definition of the State) then no market can be truly unhampered, least of all markets in resources the State wants to acquire.
Requiring government agencies to bid for resources does not free the market, neither does it reduce Coasean social cost. Just to take a recent example, the government borrows, taxes and inflates to conduct wars abroad. Among the resources they need are lumber and other construction supplies. Private citizens are hurt by the military's acquisition of bidding funds, even before their bids on resources drive up the costs of new construction. Raising the price of new homes also raises the price of old homes, which also raises rents. Even if we ignore the economic destruction taking place outside American borders, military "competition" for resources causes harm within our borders.
One might argue that these effects are no different from any wealthy capitalist bidding up prices, but (1) the capitalist is more often driven by what he predicts to be profitable (therefore economically beneficial) projects, and (2) the capitalist got his investment funds through mutually beneficial past voluntary exchange. The military, in contrast, either seizes the resources it needs, or seizes the funds it needs to purchase them. The capitalist makes his bid in a positive-sum context; the government's game is zero-sum even before the auction takes place.
Requiring government agencies to bid for spectrum in open auction is only beneficial to the extent that it reduces the amount of spectrum held by the government. Whatever spectrum they continue to hold is paid for through seizure, which is not, economically speaking, significantly different from having seized that amount of spectrum outright.
But even without Rothbard's preferred abolition of the State, a homesteading principle, applied to all useable spectrum, would drastically reduce government waste. If the Navy wants to keep a certain frequency range, then it has to use it. Neither direct nor indirect seizure is enough to claim it as property.
Most government-held spectrum is currently unused, but remains off-limits to private appropriation. The result, in the United States, is an artificial scarcity well beyond that imposed by the FCC's protectionist practices. In most of Europe, for instance, the Welfare State is bigger than in the US, but the Warfare State is considerably smaller. As a result of less military appropriation, private European companies have more spectrum to work with for new radio technologies such as mobile telephony and wireless Internet.
This puts American companies and consumers at a severe competitive disadvantage in a global market. In a more personal context, it means that my wireless Internet access is slower, less robust, and more expensive than it has to be. What seem like fast-paced changes in wireless and data technology are actually slower than they would be in an unhampered market in radio spectrum.
Damage Redux: Opportunity Costs
Where the competitive spur is weak, or especially non-existent (as in government), development will be slowed down. Furthermore, the existence of many firms, many centers of development, make it far more likely that new ideas will obtain a hearing and a trial somewhere. . . . —Murray N. Rothbard42
"It is beyond the abilities of economic analysis to calculate the opportunity cost of the socialist experiment . . ."—Yuri Maltsev43
The established advice in personal investment is to start early. Since capital growth is cumulative, your earliest investments, all else equal, will yield the largest rewards.
There's an important inverse to this rule when dealing with damage done in history. Eastern Europe had lived under Communism for a shorter time than Russia. Eastern Europe is recovering faster.
As Coase writes of the FCC, "The history of regulation in the broadcasting industry demonstrates the crucial importance of events in the early days of a new development in determining long-run governmental policy."44
Even if we could fully privatize the spectrum overnight, the damage done by decades of government intervention, both in the FCC's cartelizing and suppression of known technologies, and by the military's classification of secret technologies, is at this point incalculable. But we can look at dates and trends to at least begin to guess at the damage done.
Most people, both advocates and critics of free markets, associate capitalism with mass-market advertising and a homogenized "consumer culture." But these phenomena were not the result of any competitive market in private property titles; they were imposed on a hostile listenership by a tiny handful of politically privileged corporations who had successfully used regulatory capture to stamp out the competing diversity of voices and market models. Remember that the Chicago Tribune's WGN broadcast fully sponsored entertainment programming to promote the sales of its newspapers. Other broadcasters were looking into subscription models akin to premium cable TV channels. The airwaves were full of amateurs, non-profits, and educational stations. The Big Broadcasters had them all run off the air.
What pre-regulatory radio resembled most is the modern Internet. Think of all the ways you've heard or imagined the Web could change how we get and use information and how it could alter the structure of commerce . . . now try to imagine that happening 80 years ago!
If FM hadn't been suppressed, television might have emerged sooner. If you think the quality of cable channels has improved the quality of broadcast channels—or at least the diversity of our viewing options—imagine that trend starting in the '40s or '50s instead of the '70s and '80s. Imagine commercial-free subscription satellite radio and TV with thousands of content-specific audio and video channels, costing the subscriber the daily price of a cup of coffee. Now imagine that medium as forty or fifty years old by now.
The Big Broadcasters warned that such diversity would be a burden on the consumer, because radio receivers would have to be smarter and more precise and therefore more expensive. But cost doesn't drive price; demand drives cost. Hundreds of millions of consumers will quickly bring down the price of any technology in a competitive market of manufacturers.
Pro-regulators and advocates of market intervention like to cite the Internet as an example of an infrastructure that required massive central funding and government planning—something the free market couldn't have produced. Austrians usually counter this claim with the following question: Why should we consider the actual historical timing of the Internet's emergence as the optimal timing for such a technology? What is seen is the blessings of a global information age; what remains unseen is the opportunity costs of coercively diverting funds from voluntary exchange to military R&D.45
But there is another important fallacy behind the Internet argument. Because things did develop in a certain way does not mean they could only have developed in that way. Did the Internet become a reality because of government intervention, or did it come about despite government intervention? When exploring counterfactuals, we're left to theory and conjecture, but radio history offers us strong evidence that government suppressed more technology than it promoted.
Wireless Internet technology is called Spread Spectrum because it sends multiple narrow signals across a wide band, or "spread" of radio frequencies. The technique is also called "frequency hopping" as a single message will move pseudo-randomly from frequency to frequency within the available band. The first patent for this technology was issued in 1941 to Hedy Lamarr, the Hollywood actress, and George Antheil, the avant-garde composer. (Why and how an actress and a musician managed to invent an important new technology is a fascinating story, but it's too long to repeat here.46) Lamarr and Antheil never saw a penny because the government classified the technology. By the time the technology was declassified, their patent had expired. Spread Spectrum was independently "reinvented" by government-funded scientists in the 1960s.
Frequency hopping, and radio encryption in general, is a short step away from digital radio. Digital radio is an even shorter step to widespread digital networks.47
Could we have had decentralized, nationwide digital networks decades earlier without government intervention into radio technology? We've already seen that the trajectory of radio content resembled the Internet before intervention; now we have at least the suspicion that the underlying technology could have developed toward a similar infrastructure. You can't dismiss the idea as mere counterfactual guesswork without recognizing that the government-was-necessary-for-the-Internet thesis is also counterfactual guesswork.
We can't know what the opportunity costs have been from 80 years of regulatory central planning, but we can know that the cost has been profound.
Conspiracy Redux: The Fallacy of Post-Scarcity
"Bad and discredited ideas, it seems, never die. Neither do they fade away. Instead, they keep turning up, like bad pennies or Godzilla in the old Japanese movies."—Murray N. Rothbard48
Ironically, Spread Spectrum technology has brought about a new challenge to privatizing the ether. The idea is called "Open Spectrum" and its advocates claim that it can create a commons without tragedy.
WiFi, a commercial technology used for local wireless networking, is one application of frequency hopping. A transmitter sends a variable-length data packet per hop, finding its way around unavailable frequencies. This allows for the spontaneous coordination of multiple signals from multiple sources, strangers working cooperatively within the same spread of spectrum.
Like Frequency Modulation, Spread Spectrum is an innovation that expands the economic supply of radio spectrum. Such innovations make the resource less scarce, but there are Spread Spectrum advocates who claim that the technology "will make the notion of electromagnetic-spectrum scarcity . . . seem quaint."
With universal standards, centrally controlled, they say, all radio spectrum can become real public property. No one need take channels out of the commons. The standards will keep us polite and cooperative in the post-scarcity of a universal broadband wireless network. "In an ideal world, the FCC would treat the airwaves like a highway system nobody owns and enforce rules governing how people use its lanes without crashing into each other."49
To anyone who has ever been stuck in traffic, it is strange indeed to see government roads cited as the paradigm of post-scarcity.
There are, in fact, two very different approaches to creating a radio commons: (1) unlicensed spectrum, which is entirely dependent on central regulation and the abolition of exclusive use, and (2) an approach called underlay, which coexists with exclusive use and is compatible with a Rothbardian understanding of private property rights.
Unlicensed spectrum is what we currently use for WiFi and other nonproprietary forms of wireless Internet access. The FCC set aside a "junk band" of high frequency spectrum for use in unlicensed devices. This not only includes the new WiFi devices, but microwave ovens and other appliances that cause radio interference. (Thus the designation as "junk.") Cordless phones, baby monitors, and wireless stereo speakers also operate in an unlicensed band. Full Open Spectrum advocates want to turn the entire range of spectrum into something akin to WiFi. More modest proposals suggest that the FCC divide the spectrum into half open commons and half private licensed—not fee simple property, but something similar to the fallback position of the DeVany proposal where licenses are long-term and saleable, but the State doesn't need to go through eminent domain proceedings to reclaim them from private owners. (This built-in regulatory seizure option is called "flexibility" of property rights.)
What both full-commons and half-commons proposals depend on is an honest and apolitical central regulatory body to police the spectrum. Austrian theory, Public Choice theory, and ordinary common sense are dubious that such a body could last, if it could even exist in the first place.
But there are more basic economic problems with the Open Spectrum proposals. The tragedy of the commons does not go away just because radio spectrum is "inherently nonphysical." Spectrum scarcity is caused by interference. This is the one fact that everyone agrees on. But Open Spectrum advocates claim that technology can overcome interference and therefore eliminate spectrum scarcity. There will still be scarcity in the radio technology itself, of course, but that's where Open Spectrum proponents say the market belongs. They even claim that Open Spectrum is more market-based than spectrum property models: "the full realization of Open Spectrum" would move us "away from heavy-handed regulation toward a free-market environment in which innovation and service quality matter more than government-granted privileges."50
But does smarter technology actually banish scarcity? According to Thomas Hazlett, it does not: "'Physical abundance' trips over Say's Law, updated to the Information Age: Spectrum creates its own demand."51
In the world of computers, content will expand to fill whatever storage and bandwidth are available. When I can send or receive only small documents at low marginal cost, I will wish I could more easily download whole books. Once book downloads are fast, I will want to download libraries. When text libraries are easy, I will want the data content of DVDs, then film libraries, then teleportation. There is no limit to our potential wants, when cost is perceived to be zero.
The advocates' answer is that rational pricing and allocation will take place not in spectrum property but in technological property—the costs of the wireless devices themselves, which will have to get smarter and smarter to see past what older device users will perceive as massive interference.
Our metaphors guide our intuition, and one important point that the Open Spectrum advocates stress is that our physical metaphors for radio spectrum can lead us astray. But it's hard not to see an analogy between the increasingly crowded spectrum and an increasingly polluted atmosphere. Are we really content to count on a robust market in ever-more-efficient air filtering technology?
Abandoning the metaphors, we can still look to one inconvenient fact for the Open Spectrum argument. As more and more devices crowd the commons, there are diminishing returns on investment in technology. That doesn't imply a ceiling on potential innovation, but it does imply that spectrum abundance would be temporary at best. What's our Plan B when scarcity refuses to be abolished?
As economist David Friedman commented at the Stanford Law School's 2003 conference on spectrum policy, we all know how to create commons in a private property regime. But how do we move from public commons back to private property?52
The second approach to Open Spectrum is both more promising and less ominous. Not only is underlay technology compatible with Rothbardian property theory, but the rules of underlay fit Rothbard's model better than they fit mainstream property models. With underlay technology, wireless devices can send and receive on any unused frequency, so long as they don't interfere with the superior transmission rights of exclusive licensees—or actual property owners in a privatized spectrum.
The technologies behind underlay are ultrawideband (UWB) and agile radio. UWB allows communication at local energy levels below interference thresholds, while agile radios coordinate their frequency hopping such that both sender and receiver treat frequency that's already in use (or about to be used) as off-limits.
In this regime, individuals and corporations would be able to buy, sell and lease specific frequencies in specific locations subject to power (and other technical) limitations, and would possess the right to emit any time without interference. Other emitters could use this spectrum, but only on condition that they not meaningfully interfere with the owner's right to clear broadcast. Thus, UWB emitters that maintained power levels below the noise threshold would be non-interferers. Agile radio emitters that vacated a frequency within (say) one microsecond after the frequency owner began broadcasting would be non-interferers. Conversely, either a UWB emitter exceeding its power ceiling or an agile radio emitter taking too long to vacate is an interfering user and becomes subject to penalties.53
Physical metaphors lead some to describe underlay as "the FCC [allowing] people to drive across other people's 'property' as long as they keep a low profile and don't do any damage."54 Others describe underlay as legally sanctioned "non-interference easements" where the so-called easement is held by the public at large.55
But notice that both describe underlay as allowable trespass onto someone's property. This sort of oxymoron is necessary in a worldview of conflicting rights, and leads to the kinds of legal judgments that gave English factories permission to pollute English farmland for the greater good of England, or the Uniform State Law for Aeronautics in the US, which claimed to recognize the ad coelum property rights of common law, while acknowledging "a superior public privilege to invade the right."56
Rothbardian property theory and Austro-libertarianism in general do not see "rights" that are inherently in conflict as being actual rights in the first place. All natural rights are equal and compatible, though interests will come into conflict. Thus Rothbardian property does not require mandatory easements or legal trespass. Remember that legitimate property, whether acquired through homesteading or voluntary exchange, is an exclusive claim to the relevant technological unit—that being however much of something is necessary to its productive use. The use of underlay technology is less like driving across my yard and more like flying over my house or drilling oil reserves that extend beneath my land. It is not that non-interference makes trespass permissible: without damage to the technological unit, no trespass has taken place at all.
And when interference—and thus trespass—does take place, the result is property damage, a tort to be pursued through civil courts or arbitration, not something requiring the involvement of any central regulatory body.
So if underlay provides the benefits of Open Spectrum without violating or abolishing private exclusive claims to the use of certain high-powered signals, why does the debate continue? Cui bono? Who benefits from the proposed vision of a vast public commons?
As with our previous conspiracy to nationalize the airwaves, Big Government is the most obvious beneficiary. We can expect the FCC to seek new paradigms for its continued existence, just as US military interests did during what were, for them, those nervous years after the sudden collapse of the Cold War.57 We should also expect the modern military to approve any policy regime that might divert attention from the spectrum they keep outside public use.
What about our co-conspirator, Big Business? Here we see a change from 80 years ago. The corporations are divided, their markets more diverse. Some large players—mobile phone companies, cellular modem services, and traditional broadcasters—see their brightest future in exclusive licensing (if not fee simple ownership). It's the technology providers who are most enthusiastic about an Open Spectrum regime that would move all financial competition out of radio spectrum and into hardware and software. By definition, all market demand moves to wireless devices when that's the only place market supply is permitted.
What is entirely different from the first nationalization of spectrum is the role of the technical specialists. Early radio experts—the "amateurs"—were wary of a government takeover that they knew would threaten their use of the medium. But now the most vocal supporters of a government regulated commons are engineers and other technologists, who see private ownership as the biggest threat to freedom and democracy, while believing that a well-defined, benign role for government can promote common welfare in a high-tech future. (This benign role, however, has yet to be well defined.)
To find historical precedent for the engineers' advocacy, we need to look not to the radio debates of the 1920s, but to a different ideological battle taking place in the same decade: the debate over the viability of socialism. To listen to brilliant, earnest engineers—people who no doubt believe in their idea of freedom and the common good—advocate what is essentially radio communism is to have a window into history. It's easy for some of us to dismiss the early socialists as either criminally cynical or criminally naive—how could they not see what was coming? But if you listen to the Open Spectrum advocates for a while, it's easier to see how so many could have been drawn into a vision of a world without scarcity . . . once the chains of private property have been cast off.
What Ludwig von Mises contributed to the old debate was the problem of economic calculation in the absence of private property. What Rothbard contributes to this new debate is both Mises's calculation problem applied to the American regulatory state, and a theory of private property that is both efficient and ethical.
"In the long run, economics triumphs over symbolism, hoopla, and radical chic."—Murray N. Rothbard58
Yes, radio spectrum is unique. So is every other resource unique. Thus the technological units of any resource will have to be uniquely determined, but scarce resources cannot be handled with efficiency or justice outside a private property regime. When a resource is "public" it will either suffer the tragedy of the commons or be subjected to political allocation on the part of privileged interests, with all the waste and calculational chaos inevitable under central planning.
While it is true that the history of land property lends itself to misleading metaphors and false understandings of the nature of new resources, the Oak Leaves decision of 1926 illustrates that common-law precedent can guide us to correct answers if we understand which metaphors are useful and which ones don't apply.
Murray Rothbard's praxeological property theory makes common law more coherent and obviates our dependency on metaphor. While classical (and neoclassical) property models struggle to adjust to new conditions, the relevant technological unit serves as a principle for judging any new resource—or new understanding of an old resource. Property is not in things, but in our use of things, in our actions taken in the world. Once we return to the fundamentals of human action, we find that new circumstances are best addressed with old principles.