Genachowski Defends Incentive Auctions

FCC Chairman Julius Genachowski charged today that “some who want to preserve the status quo” are floating “misimpressions” about the FCC incentive auction plan.

Genachowski did not name names, but the assertions that he characterized as “misimpressions” have all been made by broadcasters.

The incentive auction would allow broadcasters who voluntarily give up some or all of their spectrum to share in the proceeds from the auction of that spectrum to wireless broadband operators. It’s part of the FCC’s larger National Broadband Plan, which among other things seeks to reallocate 120 MHz of spectrum from broadcast to broadband.

According to the unnamed critics, Genachowski said, cable and wireless companies are “hoarding” unused spectrum that could readily remedy any wireless spectrum shortage. “That’s just not true,” he said in a speech at the Mobile Future Forum in Washington. “It is not hoarding if a company paid millions or billions of dollars for spectrum at auction and is complying with the FCC’s build-out rules. There is no evidence of non-compliance.”

The critics have also demanded a inventory of current spectrum usage to see what spectrum is available before going after broadcast spectrum.

But that’s already been done, Genachowski said. “Our inventory confirms that there are no hidden vacant lots of commercial airwaves, but that there are a few areas well-suited to mobile broadband, such as the TV and MSS bands.

“We certainly know more than enough about existing spectrum uses to move forward with a mechanism that would simply bring new market-based options to these bands.”

Another misimpression is that broadcasters could sub-lease spectrum to wireless providers on their own, Genachowski said. “This won’t solve the spectrum crisis because it won’t free up contiguous blocks of spectrum over broad geographic areas, which is what’s needed for mobile broadband,” he said.

“Keep in mind that the original broadcast allocation — the one that still exists — is a checkerboard approach with large gaps between full-power broadcast assignments.

“Freeing up, say, 6 MHz on ch. 9 in Detroit and 3 MHz on ch. 36 in Albuquerque and 6 MHz on ch. 28 in San Francisco won’t allow mobile providers to offer the kinds of nationwide mobile services that consumers demand. 

Genachowski also said he understands that some broadcasters have concerns about the channel realignment that would follow a reallocation of broadcast spectrum — the so-called repacking.

“Our plan would seek to minimize the number of stations affected, and it calls for fully reimbursing broadcasters’ costs for such moves. Plus, we would propose that stations not be forced to move from the UHF band to the VHF band; rather, any such moves would be purely voluntary — indeed, we have suggested that stations willing to do so could participate in the auction and put a price on a UHF-to-VHF move.”

Genachowski said the FCC is committed to limiting any loss of broadcast service to the public. “In fact, we anticipate that the consumer impact of realignment will be quite small, as any shift in broadcaster frequencies will merely require that over-the-air viewers rescan their televisions or converter boxes.

“The simple truth — the overarching context for the few easily addressable questions that have been raised about incentive auctions — is that the enormous benefits to consumers and to our economy of incentive auctions overwhelm the potential costs.”

Reacting to the speech and the tacit criticism of broadcasting’s position, NAB President Gordon Smith said that he was “encouraged by [Genachowski’s] repeated promise that reclamation of additional TV spectrum will be entirely voluntary, and that broadcasters who don’t ‘volunteer’ would be forced into inferior bands.

However, Smith also asked for “an independent study to confirm Chairman Genachowski’s assurances that spectrum suitable for wireless broadband is not lying fallow, given recent verbatim remarks to the contrary from current FCC licensees.”

Smith is among those who have accused cable and telephone companies of hoarding spectrum.