GAO rules an intangible asset is not property

Here is a classic example of how our laws and regulations mess up when it comes to intangibles. The Federal Aviation Administration (FAA) wants to auction off airport landing slots in the New York area (as part of a plan to ease airway congestion). However, yesterday, the Government Accountability Office (GAO) said the FAA lacks the authority to do so. Aviation Week explains:

FAA argued that slots are intangible property that it owns and may lease. The GAO disputes this claim. "An examination of [applicable] statutes read as a whole, however, makes clear that Congress was using the term 'property' to refer to traditional forms of property... It was not referring to FAA's regulatory authority to assign airspace slots, no matter how valuable those slots may be in the hands of the regulated community." GAO says related case law confirms its conclusion.

In other words, GAO, backed by case law, apparently believes only tangible property is property.

Regardless of the merits of the auction plan, this is a very bad precedent. It highlights the inconsistent treatment of intangible assets in our laws and regulations. That needs to be changed.