A Clash Over the Airwaves

Overcrowded cellphone spectrum and wireless broadband networks have put the United States on the verge of a “spectrum crisis“ that, unaddressed, will threaten the nation’s technological leadership and economic growth. The 120 megahertz of spectrum being sought from the broadcasters would increase the amount available for cellphones and other wireless devices by about 22 percent, to 667 megahertz.

Good article on New York Times:  A Clash Over the Airwaves

The Federal Communications Commission has a solution: reclaim airwaves from “inefficient“ users — specifically, television broadcasters — and auction them off to the highest bidder, sharing some of the proceeds with television stations that volunteer to give up airwaves, known in the trade as spectrum. 

Broadcasters, however, are furious with the plan, setting the stage for an old media vs. new media lobbying battle with cellphone companies and the government.

“We’re in full battle mode to protect broadcasters from being forced to give up spectrum,“ said Gordon H. Smith, president of the National Association of Broadcasters and a former United States senator, addressing his members at their meeting here last week. The CTIA, the lobbying group for the wireless industry, quickly fired back, accusing broadcasters of “desperate and inaccurate stall tactics,” said Steve Largent, the group’s president, who is a former Oklahoma congressman and member of the Pro Football Hall of Fame.

Broadcasters have long been under siege, their audiences slipping away to cable television, their advertisers defecting to the Internet. Although giving up spectrum would go unnoticed by most viewers, the fight to hold onto a chunk of the airwaves could be the industry’s biggest battle in years.

“We are not going to volunteer,“ said Leslie Moonves, the CBS chief executive. “Spectrum is our lifeblood.“ CBS owns and operates 14 stations in the large markets that the F.C.C. is considering for spectrum sell-offs.

Some lawmakers on Capitol Hill, in whose hallways the battle is likely to be fought over the next year, have already challenged the assertion that the auctions would be completely voluntary.

“Sounds kind of like a bank holdup to me,“ Representative John D. Dingell, a prominent Michigan Democrat, told Julius Genachowski, the F.C.C. chairman, at a hearing in February. “You hold a gun at the teller’s head and say, ‘We know that you are going to voluntarily give me this money. If you don’t, I’m going to shoot you.’ “

To the government, the overcrowded cellphone spectrum and wireless broadband networks have put the United States on the verge of a “spectrum crisis“ that, unaddressed, will threaten the nation’s technological leadership and economic growth. The 120 megahertz of spectrum being sought from the broadcasters would increase the amount available for cellphones and other wireless devices by about 22 percent, to 667 megahertz. On top of that, the Obama administration has said it wants to free an additional 380 megahertz for wireless Internet use.

“This growing demand is not going away,“ Mr. Genachowski told broadcasters last week. “The only thing that can address the growing overall demand for mobile is increasing the overall supply of spectrum and the efficiency of its use.“

From the days of analog signals, television bands leave broad spaces between stations to prevent interference — hence, their inefficiency. For cable TV or satellite viewers, airwave changes make no difference in reception. But for the 11 million households that still use an antenna to receive over-the-air signals (and thus do not subscribe to cable or satellite) there could be some interference between stations as the F.C.C. tries to press TV signals into a tighter spectrum bands.

Government officials deny this, but as the conversion to digital broadcasting showed, there can be unexpected consequences when you mess with the physics of broadcasting.

Mr. Genachowski has garnered support for the idea of reclaiming spectrum from some broadcasters. Also, a group of 112 economists who specialize in telecommunications, competition policy and auction design sent a letter to President Obama urging him to push Congress to approve incentive auctions. Three bills have been introduced in Congress supporting the idea.

But some members of Congress have opposed the plan, and the broadcasters’ group is a formidable foe. The group spent nearly $14 million on lobbying last year and made another $886,000 in campaign contributions toward the 2010 elections, according to the Center for Responsive Politics, in Washington. 

In Mr. Genachowski’s favor are estimates that incentive auctions will generate $24 billion or more for the Treasury. He argues that the reallocation of spectrum to wireless broadband “will generate benefits to our economy and society an order of magnitude 10 times that amount.“

But there has been little public discussion about how much of the proceeds broadcasters would receive, an omission that has left station owners wary.

There is plenty of evidence of growing demand for wireless broadband. Just one year ago, the commission projected that mobile data traffic would increase 35-fold over the next five years — an estimate that was quickly rendered obsolete with the introduction of the iPad.

That a new technology could become so popular so quickly demonstrates the need for additional spectrum, Mr. Genachowski says, because those technologies can spur new ways to address “major national challenges like education, health care, energy, transportation and public safety.“ The F.C.C. could, of course, simply move to take spectrum back from broadcasters when their licenses expire, but that would probably result in lengthy court battles. The F.C.C. wants broadcasting spectrum because those wavelengths are particularly hearty — they travel well through buildings, an advantage for mobile smartphones.

But Mr. Genachowski says the F.C.C. feels that it cannot simply grab spectrum and believes that buyers would pay more for uninterrupted airwaves. So it is asking broadcasters to either turn over their spectrum for cash and go out of business, or voluntarily move to another frequency, freeing chunks of space. For technical reasons, the move would not necessarily force stations to change their familiar channel number.

“No broadcaster will be forced to offer up spectrum for auction,“ Mr. Genachowski said. But “voluntary can’t mean undermining the potential effectiveness of an auction by giving every broadcaster a new and unprecedented right to keep their exact channel location.“

Translation: The F.C.C. might forcibly move some stations if it does not get enough volunteers. It also has proposed assessing “spectrum fees” on broadcasters, which in most cases now receive their licenses for free.

Broadcasters say they are being shortchanged, because broadcasting’s model of transmitting from one station to millions of viewers is more efficient than one-to-one wireless communication. “We understand broadband is important, but we think broadcasting is important, too,“ said Alan Frank, president of Post-Newsweek Stations, a division of the Washington Post Company that owns six stations.

Other owners are more blunt. “I’ve never heard so much nonsense in my life,“ said Charles Glover, chairman and chief executive of Telos Digital Television Networks, which owns the Fox station in Portland, Me.

“This is an actual cash grab from all of these people who have dedicated our lives to build these systems.” By taking spectrum, Mr. Glover said, “you are about to start a train wreck that we will not be able to come back from.”