CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

LicenseView is a comprehensive online portal to information about each spectrum license; it presents data from multiple FCC systems in a searchable, user-friendly manner. The Spectrum Dashboard, originally released last year, identifies how non-Federal spectrum is currently being used, who holds spectrum licenses and where spectrum is available.

I think it’s fair to conclude from this that the Chairman was telling the folks in Congress that if they want to see the FCC’s spectrum inventory, they need look no farther than LicenseView and Spectrum Dashboard. (Actually, there wasn’t anywhere else to look. While he provided website addresses for LicenseView and Spectrum Dashboard, Genachowski cited no other document or resource where any inventory-like undertaking might be found.)

In any event, curious about the long-sought and (apparently) now-realized spectrum inventory, I went to the two web addresses provided by Genachowski. When I got to the LicenseView page, I noticed a handy “learn more” button, so I clicked on it, only to find myself staring at a warning that LicenseView “is not intended for analysis of spectrum utilization or spectrum holdings of licensees.” 

Huh.

Looking further down the LicenseView page, I found (amid other disclaimers) the following:

The information contained [in LicenseView] has not been relied upon by the Commission to analyze the competitive marketplace or assessing [sic] the spectrum holdings of service providers in any particular geographic area.

More curious than before, I scampered over to the Spectrum Dashboard page and clicked on the “learn more” button, which took me to a second page (headline: “About Spectrum Dashboard”) advising me that:

[t] he Spectrum Dashboard does not constitute the official licensing records for the Commission. Specifically, the FCC makes no representations regarding the accuracy or completeness of the information maintained in the Spectrum Dashboard.

At the bottom of that second page, I found another “learn more” button, which took me to a page titled “Understanding Your Results”, which informed me that

[t]he data and analyses contained herein are not relied upon by the Commission in analyzing the competitive marketplace or assessing the spectrum holdings of wireless service providers in any particular geographic area.

Maybe I’m missing something here, but if LicenseView and Spectrum Dashboard don’t constitute complete or official FCC records, and if the FCC isn’t willing to vouch for the accuracy of either, and if the FCC itself doesn’t rely on either, then they don’t seem to be particularly good evidence of the existence of a reliable spectrum inventory. The Commission undoubtedly has access to the information necessary to assemble such an inventory, and some of that information may even be available through LicenseView and Spectrum Dashboard. But in their present forms, those “tools” don’t really seem to do the trick, as the FCC’s own disclaimers acknowledge.

But as I said, maybe I’m missing something . . .

First into the mix this year was S.415 (a/k/a the Spectrum Optimization Act). A short and sweet four-page bill from Sen. Mark Warner (D-VA), it would give the FCC the authority to conduct auctions of spectrum that is “voluntarily relinquished by a licensee”, with “a portion” of the proceeds being shared with relinquishing licensees. 

Exactly what portion, you ask? The bill would simply leave it to the Commission to “establish a maximum revenue sharing threshold applicable to all licensees within any auction, unless the establishment of such threshold would increase the amount of spectrum cleared or would increase the net revenue from the auction of such spectrum”. Say what? The bill would also order the Commission to “minimize the cost to the taxpayer of the transition of the spectrum to be auctioned”. That provision could complicate the workability of a suggestion advanced recently by Media Bureau Chief William Lake that the government might also pay for the costs of repacking the spectrum. 

So the Warner bill would give the FCC a carrot (i.e., auction proceeds sharing) with which to induce broadcaster cooperation, even if the size and deliciousness of that carrot are still up in the air. By contrast, it has no provision for a stick with which broadcasters might be threatened into cooperating. Some of last year’s bills would have created a spectrum tax that could have done just that – but the Warner bill says nothing about such a tax.

On the House side, we have H.R.911 (dubbed the Spectrum Inventory and Auction Act of 2011) introduced by Rep. John Barrow (D-GA). This, too, would give the FCC the authority to conduct incentive auctions. But before such auctions could be conducted, the FCC and the NTIA would first have to complete an exhaustive broadband spectrum inventory report which would have to be made public and updated semi-annually. The report would be no walk in the park: it would have to detail federal and non-federal uses of the spectrum and describe (among other things) the types of receivers in use, the geographic distribution of the various uses, and the frequency of use.  

Only after this initial report is completed could the FCC move forward with incentive auctions. As with S.415, H.R.911 would leave the to-be-shared amount of auction proceeds up to the FCC’s discretion. The only guidance on that score is that the sharing should be “in an amount or percentage that the Commission considers appropriate and that is more than de minimis”. 

Importantly, the bill would expressly prohibit the Commission from reclaiming spectrum “directly or indirectly on an involuntary basis”. The bill is silent as to what would qualify as an “indirect” involuntary measure. Nevertheless, the fact that that language is included may comfort some skeptics who expect that the FCC might otherwise opt for non-voluntary strong-arm measures to persuade licensees to give up their spectrum. (Note: no reference to any spectrum tax here, either.)

Back on the Senate side, we have S.455, the Reforming Airwaves by Developing Incentives and Opportunistic Sharing Act – or “RADIOS Act” – co-sponsored by Sens. John Kerry (D-MA) and Olympia Snowe (R-ME). This bad boy weighs in at a much heftier 51 pages. It follows up on a similar bill these two senators co-sponsored last year.  According to Kerry’s website, this year’s edition is “comprehensive spectrum reform legislation to modernize our nation’s radio spectrum planning, management, and coordination activities.”

Much like Barrow’s bill, the RADIOS Act would permit the sharing of auction proceeds while requiring the FCC to complete a spectrum inventory and other similar exercises. However, here completion of the inventory does not appear to be a condition precedent to the incentive auction. The amount of auction proceeds available for sharing would be left to the Commission (“an amount or percentage determined in the discretion of the Commission”), and broadcaster participation would be strictly voluntary. And as with the two bills described above, the RADIOS Act says nothing about spectrum taxes. Interestingly, in the section about incentive auctions, the RADIOS Act requires that the Commission assure that there will be “adequate opportunity nationwide for unlicensed access to any spectrum that is the subject of such an auction.” This is intended to protect the continued availability of spectrum for white spaces devices.

(The RADIOS Act sprawls well beyond these narrow limits, but the description above should answer the immediate questions of folks concerned about the possibility of incentive auctions.)

The RADIOS Act, Warner’s Spectrum Optimization Act, and Barrow’s “Spectrum Inventory and Auction Act of 2011” are the first, but almost certainly not the last, pieces of legislation that have come out of the chute this year. Word is that several other legislators will likely get in the act over the next few months. We understand that at least one of bill will specifically direct that a portion of incentive auction proceeds will be set aside to assist broadcasters relocate to different channels as part of a repacking process.

None of these three bills provides any clear indication – or even basis for speculation – about the amount of auction proceeds that participating broadcasters might expect to get their hands on. Indeed, other than the impenetrably obfuscatory language in the Warner bill, the bills would give the FCC nearly unfettered discretion to make that call. That’s not necessarily good news, but it might be unrealistic to expect Congress to micromanage such things. On the other hand, the fact that none of the bills threatens imposition of a spectrum tax is a hopeful sign, since such a tax could easily be wielded as a threatening economic cudgel to encourage “voluntary” participation in the spectrum re-purposing process.

Of course, Congress’s seeming interest, just right now, in spectrum auction legislation must be counter-balanced against the undeniable fact that, by the end of this year, posturing for the 2012 elections will have begun. As a result, by then prospects for movement on most legislation of any sort will likely be slim. So if we’re going to see the enactment of any new legislation dealing with the overhaul of spectrum regulation, including incentive auctions, it will likely be sooner rather than later.   We’ll keep you updated on these bills, and any new ones that get added to the Incentive Auction Sweepstakes.

Point 1: The need for more spectrum for wireless broadband is real.

We can all agree that the general public is relying increasingly on mobile devices, and that, to the extent that those devices require spectrum to do their job, the demand for wireless-friendly spectrum is growing correspondingly. No problem there.

But the existence of increased demand for spectrum does not necessarily support the FCC’s apparent conclusion that it is essential that TV broadcasters cough up their particular chunks of spectrum so that others might use it. Why, for instance, can’t the Commission simply modify the rules governing spectrum use to permit broadcasters to offer wireless services? If the need for spectrum is so dire, shouldn’t the Commission be doing everything it can to encourage innovations that could increase efficient spectrum use? (Apparently not, since the Bureau recently rejected a proposal for experimental authority to test an over-the-air broadband delivery service on TV channels.)

Point 2: All the good spectrum is already occupied, so somebody’s going to have to be relocated – and that somebody should be TV.

While it’s one thing to speak generally of total spectrum congestion, it’s another to provide a detailed inventory of precisely (a) who’s got what spectrum, (b) how long they’ve had it, and (c) what they’re currently doing with it. A number of senators submitted a bill two years ago that would have required the FCC and NTIA to assemble such an inventory. That bill went nowhere.

The Commission is apparently sensitive to criticism about the utilization of spectrum by non-broadcasters, as Lake (somewhat defensively, it seemed) alluded in his speech to the fact that Verizon and AT&T are in the process of building out the spectrum they bought three years ago. (According to Lake, Verizon expects to be serving nearly 300 million folks by the end of 2013; AT&T plans to be serving 75 million by mid-2011and “to expand rapidly after that”.) OK, that’s two spectrum holders. How about the rest, including the government itself? Does the Commission really have a solid, detailed grasp of actual spectrum usage? Shouldn’t it – at least before starting to herd an established industry off into more confined pastures?

Point 3: The FCC has the broadcast industry’s interests at heart.

Lake says this point “deserves emphasis”, but then dedicates a grand total of two sentences to it. In the first sentence, he perfunctorily tips his hat to the “great service” TV provides to the public. The second (and last) sentence reads simply:

We firmly believe that an incentive auction can provide a financial shot in the arm for those broadcasters who choose to participate and can leave the remainder of the industry in an even strong position to carry on the important benefits of over-the-air television.

The Commission may in fact believe that – but you have to admit that the wholesale lack of detail there is a bit disquieting. It has the ring of an over-eager sales pitch, holding out the promise of pure upside and non-existent downside.

Point 4: “It is natural to fear the unknown.”

No kidding. Unfortunately, what is unknown to broadcasters is, at this point, also unknown to the Commission. That’s because the FCC’s preferred course – incentive auctions – isn’t currently available to the Commission, and won’t be unless and until Congress gives it the authority to offer such incentives.

But that doesn’t stop Lake from offering glimpses of an idyllic system in which broadcasters would basically name their own price (by setting, up front, a “reserve price” for their spectrum). Once the spectrum to be sold is identified, the Commission would auction it off, with the proceeds “being shared” by the Treasury and contributing broadcasters. Lake emphasizes that any participating broadcaster would “set its own price”.

That sounds great, but would it really be as simple as that? Who knows – since neither the precise auction mechanisms nor any possible limitations on the splitting of auction proceeds have even been proposed, much less adopted?

Point 5: Keep an open mind.

This one we can all agree on. It never does anybody any good to make prejudgments about unknowns, and at this point the incentive auction is just that, an unknown.

But because it is an unknown, it’s also important not to be lulled into a false sense of tranquility and acceptance. The Commission may, as Lake indicates, be totally committed to doing right by broadcasters. But even if that’s the case, the Commission may find those best wishes frustrated by whatever Congress does.

And then there’s the possibility that, while the Commission may talk a good game, its seemingly monomaniacal obsession to maximize the spread of wireless broadband is really the only thing that matters here – and if broadcasters get in the way of that goal, well, that’ll just be too bad.   (Indeed, according to a speech given by former Chairman Reed Hundt on the eve of the adoption of the National Broadband Plan last year, the weaning of the American public away from broadcasting and onto the Internet as the dominant “common medium” has apparently been a project on Chairman Genachowski’s to-do list since he served as Hundt’s Chief Counsel back in the mid-1990s.)

At this point, none of us can know for sure what’s going to happen – indeed, even the Commission can’t know, given its lack of statutory authority.  So while we should definitely maintain an open mind and a willingness to examine alternatives, we should also be mindful that the halcyon image Lake has described may not be anywhere close to the eventual reality.

*With acknowledgement to Rod Serling and Damon Knight.

However one might feel about the re-purposing of TV spectrum, it would make sense to attend the webinar if only to get, straight from the horse’s mouth, any and all details of the plan that might be disclosed. For more than a year the Commission has demonstrated an overwhelming determination to use TV spectrum for broadband. The timing of these webinars may be somewhat premature – for instance, the spectrum at issue has still not been allocated for broadband use (although that’s in the works), and the FCC doesn’t have the authority to provide broadcasters “incentives” in the form of portions of auction proceeds – but the fact is that the Commission seems absolutely bound and determined to make the re-purposing happen. That being the case, it’s a good idea for all folks likely to be affected by the change – broadcasters being the most obvious example – to learn as much about the plan as possible as early as possible.

Of particular interest should be the “new business model options” the Commission has in mind for broadcasters. Helpful suggestions about new alternatives and opportunities are always welcome, even when the source is as unlikely as the federal government. It is unclear, however, whether the Commission’s list of “options” will be as broad as possible: in one recent decision, the Media Bureau displayed a curiously constricted approach to a possible alternative use of broadcast spectrum. The Bureau denied a request by an LPTV licensee to test an innovative technology that might have led to a “new business model option”. It was not an option, apparently, that the Commission wants to encourage. (Full disclosure: FHH member Peter Tannenwald represents the proponent in that case.)

It will also be intriguing to hear the Commission’s take on “how would an incentive auction work?” As noted, the agency still doesn’t have the authority to share its auction proceeds with private parties (like broadcasters seeking compensation for turning their spectrum in for auction). Nor has it been determined precisely – or even roughly – how any individual broadcaster’s share of those proceeds might be computed. As a result, we shouldn’t be surprised if this portion of the webinar tends to be longer on hopeful promotion than on useful practical detail.

Still, the fact that the Commission is sending its missionaries out to preach the gospel of spectrum re-purposing and, in the process, possibly convert non-believers is an important development for all concerned. It presents opportunities for all sides. Such opportunities should not be ignored.

The reason for this latest postponement should come as no surprise to anyone who has been following the Commission’s activities for the last year or so.  Those activities have been dominated by the National Broadband Plan, which includes a proposal to move 120 megahertz from broadcast television over to the mobile broadband.  With that proposal on the table, the Media Bureau is not inclined to invite a boatload of new applications for use of the TV spectrum.  While some people think that the FCC’s idea of grabbing 10 TV channels is somewhat impractical, the FCC worries that any new applications for TV channels might put some grease on the spectrum and make it harder to grab no matter how sharp the regulatory talons.  So until the Commission has had a chance to evaluate the NBP channel reallocation/repacking proposals, the Media Bureau is going to keep the door closed to most – but not necessarily all – new LPTV/TV Translator applications in non-rural areas.

Some limited filing opportunities in the LPTV/TV Translator services remain.  For instance, the restriction on filing applications in rural areas, lifted on August 25, 2009, remains lifted, so applications may be filed at any time for new stations or any kind of changes in existing rural stations.  (“Rural areas” will continue to be defined as it was in the FCC’s June 29, 2009 public notice.)  Also, existing LPTV/TV Translator/Class A stations in urban areas may file at any time for on-channel digital flash cuts or displacement to new digital channels.  In a new development, existing urban area analog stations will be permitted for the first time to file for digital companion channels starting on July 26, 2010, so that they can operate one analog and one digital channel until the FCC finally shuts down all analog television.

Although the FCC’s public notice doesn’t say so, we also understand that if you have an unbuilt rural station at the fringe of an urban area, you may not file a minor change to go inside the urban area . . . BUT if you build the rural station, you may then move it with a minor change without geographic restriction.