Tim Lee

Libertarian Questions

Recently I’ve noticed an interesting tension in libertarian theory. As I’ve mentioned before, I just completed work on a new paper on eminent domain abuse in Missouri that will be published by the Show-Me Institute next month. The basic conclusion of my paper is that eminent domain should only be allowed for public use—that the government should have the power to take someone’s property (with compensation) to build a road or a courthouse, but not to build a Wal-Mart or a shopping mall. One of the interesting wrinkles to this issue is what to do about public utilities: railroads, power lines, oil and gas pipelines, phone and cable services, etc. Like roads, these facilities are subject to serious holdout problems. And since the mid-19th century, the courts have held that takings for the construction of such infrastructure is a public use, provided that the railroad (or later other service) acted as a common carrier. As I understand it, for precisely this reason railroads were subject to certain common carrier requirements under the common law before the creation of the ICC.

That’s the tack we libertarians tend to take today. For example, here in Missouri I played a small role in drafting this proposed amendment to the Missouri constitution, which reads, in part, “property may be taken for transportation or utility facilities or transmission systems used by a railroad, regulated utility or rural electric cooperative.” When Adam wrote his magnum opus on the installation of FiOS in his neighborhood, he mentioned that Verizon came along and ripped up his yard not once but twice. He didn’t say for sure, but it sounds like they did it without getting his permission first. These comments suggest that the law gives Verizon permission to tear up peoples yards and even install new cabinet cases on their property without their permission. And I got the impression (Adam correct me if I’m wrong) that he wasn’t overly troubled by this invasion of his property rights.

But that brings me to my question: what does the “regulated” in “regulated public utility” mean? If in the ideal libertarian world telecom firms wouldn’t be subject to any regulations at all, how would we distinguish between those that are allowed to rip up Adam’s yard and those that are not? Should anyone who declares himself a public utility have the power to rip up anyone else’s yard? Or should no one be allowed to rip up Adam’s yard without permission?

Conversely, if some regulations are justified by the public use limitations, which regulations are they, and how do we distinguish good regulations from bad ones?

August 29, 2007 | Comments |

Viewing 7 Comments

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    Excellent questions, Tim. Of course, let’s not forget that the first few feet of just about everybody’s yards are considered public easements for a variety of uses (sidewalks, mailboxes, street signs, and even utility “trenching”). When I was a kid, my Dad once got ticketed for parking our family car on the edge of our own front lawn. The town said there was a local ordinance forbidding anyone from placing anything on the first 5 feet of their front yards because those couple of feet were considered public property. My Dad screamed bloody murder and threatened the cop who wrote the ticket declaring that “It’s my Goddamn property!” Except that it wasn’t. When we later checked it all out, we realized that the property contract / deed made it very clear that those first couple of feet of our front yard weren’t ours after all. Many communities have similar rules. My local HOA has similar rules as well and I read them closely when my wife and I bought out house a few years ago.

    Property rights are flexible at the margins (quite literally in the case mentioned above!). They have to be to ensure a well-functioning society. Hell, the entire theory of nuisance law doesn’t fit nicely into strict Lockean / libertarian property rights theory. Instead, it evolved out of common law doctrine to deal with hard cases that demanded practical resolutions. And so, we have found ways to preserve property rights but also deal with tough cases, like when a neighbor pollutes the stream that also runs through your property, or when the guy next door plays Motley Crue music at full volume at 3 in the morning right next to your window.

    Similar flexibility is necessary to ensure that various types of networks get built (sewage lines, sidewalks, gas and power lines, and even communications systems). It isn’t pretty at times, and my experience with my front lawn getting ripped up bears that out. But it does ensure that essential services get delivered to the entire community. I know everyone in my neighborhood is happy to have fiber to the door now even though we all bitched when it was being installed.

    Of course, you raise an excellent question about who should be able to take advantage of these rules. In the old days of regulated monopoly that was a simple question to answer. In the days of competitive infrastructure deployment, however, it’s trickier. The answer that many cities have devised is to allow multiple providers to “trench” at the same time. Basically, the city just tells all the providers that on Week X or Y they will all have the ability to install their stuff so that the streets or yards only have to be dug up once. After all, it’s not like you need to trench that often.

    But I agree, it’s all quite messy and we libertarians struggle with messy rules, especially as they pertain to property rights.
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    How about tying this to the issue of network neutrality? If a packet travels through fiber laid in dirt obtained by eminent domain, it must be treated neutrally.

    Of course, that's impractical, so what you really want to do is take the property by eminent domain, compensate the owner, and then _lease_ it to the utility for the length of time over which the utility is allowed to depreciate its line. If the utility chooses not to renew its lease, give the original property owner the option to buy the property back.

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    I agree that network neutrality has an obvious parallel with the goals behind rational use of eminent domain. I know where Tim stands on this issue, though.

    Regarding your paper, I was wondering where you came down on the use of eminent domain for Hospitals.

    With regard to the issue that Adam brings up, it touches on zoning rules, which is even messier, for libertarians, I would think, right?
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    My colleague Wayne Crews has brought up the notion of trenching conduit, rather than cable, so that lines could be run in the future with ease. This would be costly, but would certainly offer long-term benefits opposed to trenching. I don't know of any examples where this has been done, but it is thought provoking.

    Another exciting solution, one that gets around trenching entirely, might come from experimentation now going on with optical distribution transceivers, also called free-space optics. These (typically roof-top) devices can be used to transmit data via laser light to other transceivers, essentially taking the fiber out of fiber optic. These, however, have been tested for years, getting 500Mbps speed as early as 2000, but without major commercial deployment. I don't know if cost or design issues currently stand in the way of bringing a free-space optic solution to market, but this product may still hold promise for the future.

    It's especially interesting considering that these relays, in conjunction with Wi-Max, could allow us to the cut the cord for good, and much sooner that we might have expected.
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    Basically, the city just tells all the providers that on Week X or Y they will all have the ability to install their stuff so that the streets or yards only have to be dug up once. After all, it’s not like you need to trench that often.

    So to put it provocatively, what you're suggesting is that we apply "open access" regulations to peoples' front yards, requiring homeowners to make part of their yard available to anyone who wants to use it on terms set by the government.

    I'm having trouble seeing a principled difference between that and the "open access" regimes we libertarians criticized in the 1990s. The only difference I can see is that the open access regulations of the 1990s infringed on the property rights of the ILECs rather than the property rights of millions of homeowners. It's not clear to me why one would be less objectionable than the other.
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    If the first few feet of the yard is actually city property, then it's not really your yard. We use possessive terms often when they're technically incorrect. Someone may also say my street, or my town, but they don't denote ownership. Digging up the lawn is also a heck of a lot easier for the city than digging up the street, so it makes sense that they either own the yard or have a legal right to access the yard. If this arrangement is created when the city authority originally parceled out land, then it is just part of a property structure, and not anti-libertarian or anti-property rights.
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    Cord, that's a good point. I'd be interested to know more about the exact property arrangements that govern the various kinds of utilities going into peoples' homes.

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