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So what happens is this: in free space, radio waves spread in a uniform pattern over distance. In the atmosphere, this effect is compounded by the absorption of radio waves by water particles and the dispersion by dust and over teensy things in the air.
The Cato passage is a bit ambiguous because the term "free space" has different meanings, which God's Encyclopedia also explains. The patent office defines it the way Cato does - an unobstructed path through the atmosphere - but physics defines it as the perfect vacuum that doesn't actually exist in nature.
It also makes for nutty behavior during sun spots, which makes amateur radio operators get really excited because they can "DX" far-away stations. These spots follow a rough cycle. I can't wait until 2012!
Also, "attenuation" in the broad sense of the word, does happen due to topography (lower frequencies pass more easily through trees and walls). That's why the 700 MHz frequencies were so highly valued.
At least we can agree on science.
The trouble with 700 Meg is that it covers such large area you aren't going to get good throughput; too many users, not enough time.
If the spectrum were privatized (given the complexity of managing the spectrum) I predict that we would see the owners of the spectrum joining together to form an industry association that would be functionally identical to the FCC. I also bet that this hypothetical association would be even more "abusive" than the existing FCC. Given the choice of a private FCC or a government FCC, I would take the government one. Privatization of the spectrum will be a major mistake.
On less than 100 watts of power, as an amateur radio operator, I have been able on 20 meters using a dipole (a very simple antenna) to talk from North Carolina to stations as far away as the Galapagos Islands and Macedonia. Other amateur radio operators, who have more experience than I, have done much better.
Though I may not totally agree with Hatfield and Weiser, I have no philosophical objection to what they are proposing.
As an aside, from an absolutist private property viewpoint, the spectrum laying above a piece of private property would belong to the surface property owner. The selling of spectrum rights would actually be depriving the surface property owner of some of his property rights. In fact, the surface property owner should be entitled to compensation for any radio waves that trespass through his property. Obviously this would put a crimp in the telecommunications business.
My point with the absurd statement above is that there are rationale limits to the concept of private property as some monolithic unalienable right and that at a certain, though undefined, point some property belongs in the public domain.