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The Economics of Cell-Phone Jammers:
A case study in government misallocation of property rights

6 Nov 2007 in Regulatory Economics, Regulatory Policy

New York Times reporter Matt Richtel seems to have set off a pandemic news stories and commentaries with his profile of "otherwise respectable people" who use jamming devices to illegally obstruct the cell phone conversations of people nearby. Based on groundswell of support that appears to have formed for jammers, this looks like a problem worthy of a small amount of economic analysis

As it happens, there are simple market-based solutions. The real problem is that the federal government has preempted them by disallowing market forces to work. One thing should be clear: jammers have appeared on the market because there is considerable consumer demand for them. That means there used to be a "market failure," and this market failure will persists as long the federal government insists on sustaining it.

The anecdotes we've read about cell phone jamming fall into a small number of categories:

• Malicious jamming, the jamming of other people's cell phone signals because it's fun.

Whatever satisfaction these jammers might get, there is little support for them and likely little opposition to banning the use of jammers as a form of juvenile terrorism, however enjoyable. Even those who do it claim to feel bad about it, and they prefer not to be identified.

• Jamming in private places, such as commercial aircraft, hospitals, and restaurants.

In some cases, the jammer and jammee may be sharing the same private space but neither is the owner of that space. In other cases, the jammer is the owner of the space and seeks to require people to use its space in certain ways. Conflict is exacerbated when the owner of the space uses dubious scientific arguments to support a position that it could transparently assert based on ownership, but chooses not to.

Commercial airlines used to prohibit the use of cell phones at all times, but now permit their use until the cabin door is closed and upon landing. Cell phones were suspected of interfering with aircraft navigation or communication systems, but the evidence for that ranges from weak to nonexistent. Over time, an increasing percentage of frequent fliers discerned that the airlines' rule was based on concerns other than safety, and increasingly they discreetly violated the rules. In any case, having asserted safety as the justification the airlines were unable to justify banning cell phone use when aircraft were on the ground.

Hospitals almost universally ban cell phone use also on safety grounds, but only by patients and visitors. A good case might be made to restrict cell phone use as a courtesy to others (see the case of the commuter train riders below), or just because the hospital owns the property and patients and guests do not. But by basing the rule on safety considerations, they convert a property rights story into a safety debate. The obviously inconsistent application of cell phone use rules undermines their credibility and motivate patients and guests to disregard them, usually discreetly.

One principal protagonist in Richtel's article is an upscale Bethesda MD restaurant owner who installed a relatively expensive jammer to stop his own employees from using their cell phones at work. He was investigated by both cell phone service provider Verizon and the Federal Communications Commission because jamming cell phone service is against the law, even on your own property. Writes Richtel:

Cellphone carriers pay tens of billions of dollars to lease frequencies from the government with an understanding that others will not interfere with their signals. And there are other costs on top of that. Verizon Wireless, for example, spends $6.5 billion a year to build and maintain its network.

The reason for the conflict is that Verizon and others paid the federal government for this property right, not the owner of the Bethesda MD restaurant. This restaurant owner might be intimidated to cease jamming because he is easily reached by FCC investigators, but other owners will not. It's a big country.

• Jamming in public places, such as subways, buses, and commuter trains.

The jammer is bothered by others nearby using cell phones and seeks to enforce "peace and quiet." This seems to be an intermediate case that often is triggered by cell phone users who choose to disregard evolving social norms we call "cell phone etiquette." (Commandment #3 ["Thou shalt not speak louder on thy cell phone than thou would on any other phone"] is especially relevant here, but this list is notable because in general it appears to to be an effort to prescribe rules for other people's behavior rather than codify already established norms.)

The other principal protagonist in Richtel's article is an architect who jammed the conversation of "a 20-something woman who he said was 'blabbing away' into her phone." The architect was dismissive of the value this "Valley Girl" placed on her conversation, and placed a high value on his pursuit of peace and quiet. He might have felt differently if she had been discussing something of interest to him, such as perhaps inside information on the criteria that would be used to evaluate competing bids on a major building project.

A CONSISTENT THEME: UNASSIGNED, INSECURE, OR INEFFICIENTLY ASSIGNED PROPERTY RIGHTS

In each of these categories, a clear assignment of enforceable property rights solves the problem. That assignment has implicitly occurred in the case of malicious jamming because it is accepted that the cell phone user has the property right to an unobstructed call. In the case of private spaces, the property owner should be vested with the right to establish and enforce whatever rules he wants.

Commercial airlines could compete by offering different terms of service; for example, an airline could prohibit voice calls but permit text messaging, which cannot pose a genuine disturbance.

Hospitals routinely compete on other "quality of life" measures, such as significant differences in their attitudes toward ICU visitors. But they key to making this work is for hospitals to stop making overly broad safety claims and simply assert that under their roofs, they make the rules.

Restaurants have become everyone's favorite battlefield to control other people's real or imagined property rights. The practice began with cigarette smoking restrictions, then expanded to bans, bans on smoking in bars, and bans of the sale of foods containing trans-fats. The logical right of the owner of the space -- the restaurateur -- to decide which set of rules to establish and follow for his own establishment, appears to have been lost long ago.

The case of genuinely public spaces, such as publicly-owned subways, buses and commuter trains, is instructive. The owners of these public conveniences and facilities have no qualms about asserting ownership of the environment. The architect who jammed the 20-something's call knew he was acting in violation of the established rules of the commuter rail line, which generally permits cell phone use, if not in violation of law. As effectively as public agencies guard the right to property they own and operate, they are much less inclined to give the same deference to owners of private property.

A recurring problem is the absence of thoughtful policy analysis, and in some cases, the possibly willful use of bad analysis. Richtel implies that wireless companies don't understand why there is a market for cell phone jammers:

“It’s counterintuitive that when the demand is clear and strong from wireless consumers for improved cell coverage, that these kinds of devices are finding a market,” said Jeffrey Nelson, a Verizon spokesman. The carriers also raise a public safety issue: jammers could be used by criminals to stop people from communicating in an emergency.

But there is nothing counterintuitive about it. Cell phone jamming devices belong to an entirely different market. The best analogy is radar-based speed detectors and devices that jam their signals ("radar-detector detectors"). We've heard no one suggest that there is anything counterintuitive in the fact that police departments have a market demand fort devices that detect speeders and drivers have a market demand for devices that block them.

As for the potential use of jammers by criminals, Nelson's argument has neither logical nor empirical merit. Criminals are the least likely of people to be motivated to conform their behavior to law or regulations, and by the very nature of their business they disrespect property rights.

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A case study in government misallocation of property rights

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