The billions of dollars that have flowed to the makers of high-def flat-screen TVs and other digital components are all due to the efforts of this country’s television broadcasters who encouraged the development of the technology, drove the standardization effort and made people want to buy HD sets by broadcasting programming — the best television had to offer — in HD. And what do they get in return? A growing effort, supported whole-heartedly by by the CEA, encouraging the FCC to take back TV spectrum.
The one sector of the American economy that has benefitted the most from HDTV is consumer electronics.
For the past decade, manufacturers and retailers have enjoyed a windfall from the unrelenting demand for big-screen DLPs, LCDs, plasmas and now LEDs.
To enjoy HD, consumers are paying far more for the HD sets than they were for the best analog sets and they are replacing their old sets long before their useful lives have ended.
This year alone, it’s estimated TV viewers will spend $21 billion for 29 million HD screens for bigger and better looks at their favorite TV shows. That’s about $5 billion more than TV broadcasting’s total annual revenue.
And whom do the CE folks have to thank for this wonderful market and the billions it has generated?
Starting back in the early 1980s, broadcasters encouraged the development of the technology, they drove the standardization effort and they made people want to buy HD sets by broadcasting programming — the best television had to offer — in HD.
Left to cable, HD might still be in an NHK lab and you might still be wondering how you were ever going to drag that 36-inch CRT across the room.
But it wasn’t thanks that the broadcasters received from the set makers and sellers last week. It was a stab in the back.
The Consumer Electronics Association implicitly endorsed an FCC proposal to take back most of the broadcast spectrum so that it can auction it off to wireless broadband providers.
Most broadcasters are vehemently opposed to the plan, which is being pushed by FCC broadband chief Blair Levin, even though it would allow stations to continue to broadcast an SD channel for those who still get their TV off air and give the broadcasters a cut of the proceeds from the auction.
Although intrigued by the idea of cash for spectrum, the broadcasters feel they will be short-changed on the deal and are convinced that there is much value to be extracted from their digital spectrum through mobile TV and other new services.
CEA endorsement came in the form of a study by economist Coleman Bazelon that concludes that TV spectrum would be five times more valuable if it were reallocated and used for wireless broadband services than if it continues to be used for broadcasting.
It is, in essence, an economic argument for the FCC’s proposed spectrum grab.
CEA paid for the Bazelon study and attached it to a six-page filing with the FCC that decries the scarcity of spectrum for wireless broadband and calls on the agency to reallocate bandwidth to it from other services.
“We are currently facing a crisis in wireless high-speed broadband availability,” says CEO President Gary Shapiro in a prepared statement.
He also laments the “swaths of underutilized or inefficiently used spectrum,” leaving little doubt about what swaths he is talking about.
CEA says in its filing that it “doesn’t necessarily endorse” the Bazelon study, and it only submitted it so that the FCC would have a model for analyzing spectrum allocations.
In an interview with us this week, CEA’s FCC point man James Hedlund dropped all such pretenses, saying that CEA does favor a give-back as long as participation by broadcasters is voluntary.
“Right now that’s a concept that CEA believes the FCC should strongly consider,” he says. “We think it’s time for the FCC and stake holders to be really creative in figuring out how we free up spectrum.”
As far as I can determine from looking through comments online, only CTIA, the big lobby for the wireless operators, has gone as far as CEA in putting the broadcast spectrum into play. CTIA said the broadcasters’ use of spectrum is “highly inefficient.”
(T-Mobile, in a footnote to its FCC comments, also called the Levin plan “an innovative example of driving marketplace solutions worthy of serious evaluation and consideration.”)
No doubt CEA members see billons more to be made in selling various pocket-size gimcracks and gizmos if wireless operators can get their hands on more spectrum.
But I’ve got a hunch something more is at work here. By getting out in front on this, Shapiro and company may be trying to win points with Democratic policymakers, pretty much the only ones that count these days. I’m hearing that the White House is behind the FCC on this.
This issue is far from central to CEA, and Shapiro’s declaration that the country is facing a critical spectrum shortage sounds a lot like what FCC Chairman Julius Genachowski and Levin have been saying publicly lately.
I really don’t know if the broadcasters are irrevocably opposed to any spectrum give-back or just in the initial phase of what will be a long and painful negotiation.
But, either way, it doesn’t help when an industry that has been broadcasting’s close partner in bringing radio and then TV to the American public for 90 years begins adding its considerable weight to the other side.
Harry A. Jessell is editor of TVNewsCheck. He can be reached at 973-701-1067 or [email protected]