Another peek at what spectrum re-purposing might look like

In what appears to be an ongoing effort by the Media Bureau to soften the ground on the spectrum re-purposing front in advance of an eventual all-out assault, Bureau Chief William Lake recently spoke to the National Alliance of State Broadcasters Associations, preaching the gospel of incentive auctions. His message: We come in peace, with broadcasters’ interests at heart. Submit to our plans and everything will work out for the best. Honest.                                                               

Maybe theirs is the path to the ultimate win-win-win situation. As we have previously urged, broadcasters should keep an open mind and give careful consideration to any final plan the Commission eventually comes up with.

But broadcasters might also be forgiven if, at least for now, they opt for skepticism over unquestioning acceptance.

In his speech (the text of which may be found here), Lake lays out five basic points. Let’s take a look at them.

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.