Ken Gordon said:  
>The value of McCaw's licenses is not relevant to the issue. If the    
>FCC or some other agency has created scarcity by insisting, with the    
>support of the state,  that people have licenses from them to use    
>spectrum, then Craig McCaw's licenses would be worth whatever they    
>were worth. In this circumstance, the FCC is selling, and McCaw is    
>reselling, what is normally called "protection".  
  
  
  
Professor Gordon's point is really criticial to this discussion.  The fact that something
earns "rent" or a return above what is necessary to "incentivize"
supply is less important than the reasons for the scarcity that makes the pricing
necessary in the first place.
  
If the spectrum is only artificially scarce by state intervention then we need to know
that his is entirely different from the Henry George idea that "location" is unique and an
ontological feature of all human action. (Mises has
made the same point but regard to "time" and not with regard to location or space.)  Henry
George or at least the latter-day Georgists with whom I am familiar have made the point
with regard to "place" or location.  Location is fixed in supply and its economic value is
often influenced by its location to a central "attractor" of some sort (a metro station
line is the tried and true
example).  Turning Henry George on his head means that we transfer these insights over
towards a greater apprication of the entrepreneurial process (see my paper in the Laurent
book).
  
The spectrum is a different sort of problem and those "rents" may be of the nature of "
rent-seeking rents" like the text book taxi cab monopoly and the licenses that restrict
entry.   We create these privileged monopolies in return for political contributions
(bribes) and forever after force recent immigrant arrivals to the city to borrow heavily
on their future income in order to do the job of providing taxi cab rides.   The
limitation of entry into taxi cabbing does not seem to promote economic efficiency in the
sense that resources are being allocated towards their most highly valued uses.
  
Please notice that I have used Henry George's ideas here without advocqting a single tax
or anything at all.  They are relevant to other interesting issues besides urban land
rents.  I think that was Polly Cleveland's point as well in a recent email to this list. I
appreciate Prof. Gordon's contributions to this discussion.
  
Laurence Moss