Unplanned Telecom Corridor Markets

Allowing deregulated telecommunications companies the power of eminent domain to build-out the "Information Superhighway" abrogates the Constitutional contract of just compensation.

1 minute read

November 4, 2002, 11:00 AM PST

By Chris Steins @planetizen


This academic journal article argues that "markets supplanted eminent domain compensation formulas for the acquisition of fiber optic cable easements by deregulated network industries, without predatory pricing or damaging externalities, at least for the period the dot.com and telecom industries were capitalized with equity from the stock market bubble of 1999-2001. More recent court rulings have invalidated deregulated market prices for such property rights arrived at by voluntary exchange. In so doing, the courts have unwittingly substituted one-sided landowner holdout prices with equally one-sided condemnor prices based on non-corridor property values. The predatory pricing and damaging externality arguments for the continued exercise of eminent domain and regulation of utility pole line co-location rights no longer hold in a deregulated environment. Paying incentive prices for telecommunications property rights is the magic elixir that has made deregulation work, resulting in consumer capitalization in time and cost savings as well as incalculable economic benefits. Allowing deregulated telecommunications companies the continued power of eminent domain after establishing voluntary market prices for property rights to accommodate the build-out of the "Information Superhighway" abrogates the Constitutional contract of just compensation."

Thanks to Laura Kranz

Sunday, November 3, 2002 in Planning and Markets

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