VI. Incentive Prices Are The Elixir That Make Deregulation Work
The responses of the real estate markets and the law to the shift to markets have been as follows:
- Private and public transportation and utility corridor owners have inventoried and marketed their existing corridors for co-location of fiber optic cable.
- Owners of tall buildings and public entities with water tanks or existing radio towers have become de facto telecommunications site managers.
- Property owners with fee interests underlying pre-existing rail and electric transmission line easements have collectively formed limited liability corridor companies through the process of “class action” lawsuits (Uhl v. Telecom Cubed).
- Private and public property owners with large expanses of land under one ownership that can be easily used as corridors, such as the U.S. Bureau of Land Management, Bonneville Power Administration, and Tejon Ranch in California have primed their properties for fiber optics and energy corridors.
- Government agencies and former monopoly public utility companies have replaced the old mutual bartering system that existed prior to the creation of telecommunications deregulation with market-based pricing of radio rack space rents in their communications facilities.
- Owners of otherwise obsolescent buildings in downtown central business districts have converted many of their underutilized buildings into “fiber hotels” or fiber optic hubs.
- Former regulated energy companies have purchased “sky wrap” easements from fee property owners underneath their transmission line system easements to form a “corridor within a corridor” of fiber optic cable hanging on their towers.
- Cities and counties have contemplated forming municipal telecommunications enterprises that install dry conduit in city streets for deployment of the “last mile” of the information highway.
None of these activities would have occurred by deregulation alone. Nor would they have occurred if deregulated communications carriers exercised eminent domain to acquire fiber optic easements, roof top antenna easements, or cable hanging rights on electric transmission line towers. Private and public property owners would then have no economic incentives to allow co-location of such infrastructure on their properties. Governments would exert their “greater public necessity” to resist the condemnation of their properties. Private property owners would likely consider telecommunications infrastructure, even buried cable let alone EMF generating antennas, a nuisance or potential damage to their properties. Paying market based incentive prices for telecommunications property rights is the irreplaceable magic elixir that makes deregulation work. As economist Robert D. Cooter has written (2000, p. 284):
Market exchange, which is voluntary, tends to move resources from people who value them less to people who value them more.
In other words, markets produce newer higher and better uses. Without market pricing of fractional property rights for telecommunications infrastructure the entire build out of the “information superhighway" would be short-circuited.