The FCC chairman tries to reassure broadcasters that any incentive auction plan of TV spectrum would be voluntary, saying it’s “essential that broadcasters be treated fairly.” He reinforces his claim that such action is needed to meet a growing need for wireless broadband services, saying, “If we wait until there’s a crisis to reallocate spectrum, we'll have waited too long — for consumers, for our global competitiveness — and, I believe, for broadcasters.”
Genachowski Preaches To The Unconverted
Making yet another pitch for his incentive auction plan for recovering a large swath of TV broadcast spectrum, FCC Chairman Julius Genachowski today sought to reassure broadcasters that participation in the auction is strictly voluntary and that those who choose not to participate will not suffer any harm to their wallets or over-the-air coverage.
“[I]t’s essential that broadcasters be treated fairly,” he said in a speech before a ballroom full of skeptical station owners and managers. “That means, for example, that broadcasters should be fully compensated for any costs of any channel changes, and that any moves from UHF to VHF should be voluntary.”
Genachowski also tried to allay concerns that the so-called repacking of the band after the auction would diminish the over-the-air reach of the remaining TV stations. These concerns were colorfully expressed yesterday by Post-Newsweek Stations President Alan Frank, who compared the incentive auction plan to the decision to move Jay Leno into primetime.
“I’m confident that, working together, we can resolve relocation issues, as multiple relocation issues have been resolved since the FCC held its first auctions nearly 20 years ago.” Genachowski said.
The incentive auction is a means by which the FCC intends to recover up to 120 MHz of TV spectrum to meet what it says is the increasingly urgent demand of wireless broadband.
Volunteer broadcasters would offer up their spectrum for auction to wireless broadband providers with the FCC playing the middleman and dividing the proceeds between the broadcasters and the federal treasury.
Although Genachowski wants to make sure that non-participating broadcasters come out whole in the process, he said there is a limit to how much they can be accommodated.
“[V]oluntary 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,” he said.
“This would not only be unprecedented, it would give any one broadcaster veto power over the success of the auction — and be neither good policy for the country, nor fair to the other participants.”
NAB President Gordon Smith, who introduced Genachowski, said afterward that the NAB is willing to talk to the FCC about developing a workable auction plan. “We will be at the table with you.”
The FCC doesn’t have the authority to conduct incentive auctions in which proceeds are shared with incumbent users of that spectrum. That will take an act of Congress.
But Genachowski expressed confidence that Congress would eventually act, citing a powerful and growing consensus to find more spectrum for broadband through incentive auctions not just of broadcast spectrum, but of other bands as well.
“Over the past year since the voluntary incentive auction proposal was introduced, it’s become clear that this is an idea whose time has come.”
Without naming names, but undoubtedly with broadcasters in mind, Genachowski said he is disappointed by those who are trying to undermine incentive auctions with a variety of arguments. “For example,” he said, “some have argued that there’s no spectrum crunch — but the data couldn’t be clearer.
“Some have argued that we should spend more money and years on even more detailed inventories before moving forward. But the commission’s extensive prior work on spectrum and baseline spectrum inventory made clear that there are only a few major opportunities to unleash spectrum, and that there is no big swath of unused spectrum that we’ve missed.
“Some have argued that there is massive warehousing of spectrum. But market forces and build-out requirements are designed to ensure that those who paid for spectrum at auction will put it to its highest and best use. And beyond that, the projections of a growing spectrum gap assume that all previously auctioned spectrum will be built out.
“Some have argued that incentive auctions would stop mobile DTV, but it won’t. The current standard and commission rules permit it, and indeed encourage experimentation and the development of mobile DTV business models.
“Some have argued that we should wait — up to a decade or more — until a new broadcast standard is adopted. I note that other broadcasters have argued against moving to a new standard, but in any event we don’t have a decade to wait, and the transmission standard issue is separate and distinct from incentive auctions, which don’t affect the transmission standard for a 6 MHz broadcast channel one way or the other.”
Genachowski did not say which stations should participate in the auction and which should not, but he gave a strong hint. “[N]ot all broadcasters are investing in news and new platforms,” he said.
“For example, of the 28 commercial, over-the-air stations in the New York market, only six invest in news coverage of any kind. In Los Angeles, it’s eight out of 23.
“Some stations choose not to invest in this type of content, and some simply can’t — it just doesn’t make economic sense for them. But it does affect any objective of broadcast markets in view of national spectrum needs.”
Again, without pointed the finger at broadcasters, Genchowski argued against trying to stall incentive auctions in Congress through delaying tactics.
“If we wait until there’s a crisis to reallocate spectrum, we’ll have waited too long — for consumers, for our global competitiveness — and, I believe, for broadcasters.”