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In the Federal Communications Commission, Ronald Coase exposed deep foundations via normative argument buttressed by astute historical observation. The government controlled scarce frequencies, issuing sharply limited use rights. Spillovers were said to be otherwise endemic. Coase saw that Government limited conflicts by restricting uses; property owners perform an analogous function via the “price system.” The government solution was inefficient unless the net benefits of the alternative property regime were lower. Coase augured that the price system would outperform. His spectrum auction proposal was mocked by communications policy experts, opposed by industry interests, and ridiculed by policy makers. Hence, it took until July 25, 1994 for FCC license sales to commence. Today, some 73 U.S. auctions have been held, 27,484 licenses sold, and 52.6billionpaid.Thereformisatextbookexampleofeconomicpolicysuccess.Herein,weexamineCoase’sseminal1959paperontwolevels.First,wenoteitsanalyticalsymmetry,comparingadministrativetomarketmechanismsundertheassumptionofpositivetransactioncosts.ThisfundamentalinsighthaditsbeginninginCoase’sacclaimedarticleonthefirm,andcontinuedwithhissubsequenttreatmentofsocialcost.Second,weinvestigatewhyspectrumpolicieshavestoppedwellshortofthepropertyrightsregimethatCoaseadvocated,consideringrent−seekingdynamicsandtheemergenceofnewtheorieschallengingCoase’spropertyframework.Oneconclusioniseasilyrendered:competitivebiddingisnowthedefaulttoolinwirelesslicenseawards.Byruleofthumb,about17 billion in U.S. welfare losses have been averted
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