Grant TV Stations More Spectrum Freedom

FCC Chairman Julius Genachowski has demonstrated exceptionally energetic devotion to increasing the availability of broadband. But his perceptions of the need for broadband and how to meet it are both misguided and backward-looking.

The value of broadband in education, health care and economic growth is obvious. But it does not follow that all broadband must be wireless or that TV service must be curtailed, stifling innovations like HD, multiple streams and 3D.

If the seemingly insatiable appetite for wireless services can be met with a finite amount of spectrum, the only effective way will be by removing technical constraints, allowing a mixed broadcasting and broadband service to evolve.

Freeing broadcasters from the constraints of the ATSC digital standard can be done now, without legislation, and will produce a much faster and more effective broadband result than any spectrum “repurposing” plan. The question is not whether spectrum should be used for broadband or broadcasting but whether the FCC will allow it to be used for broadband and broadcasting.

The FCC must plan spectrum use based on the technology of the second decade of the 21^st century, not the first decade. Let’s skip the question of whether most of the escalating demand for wireless is driven by socially useful needs or by entertainment and games.

If demand continues to rise rapidly, and we stay with today’s technology, wireless companies know that there is not enough spectrum to go around. They are building wi-fi into smartphones to drive traffic off cellular networks. Verizon says it will introduce a TV broadcast component into its LTE system, knowing it cannot meet video programming demand any other way.

The main cause of spectrum shortage is the architecture of first-decade technology, where each user’s content request generates a separate digital stream.

One remedy is to drive traffic to wired systems, not a bad idea but seemingly unpopular with the “unwired generation.” Another is to deliver frequently used content only a few times instead separately to each user, which is exactly what broadcasting does. Its services occupy the same amount of spectrum regardless of the number of users.

Today’s demand for time-shifting can be met without more spectrum, by storing and replaying content in the user’s device. DVRs and set-top boxes do it now, and cellphones and portable tablets have already started to do it.

Today’s ATSC digital TV standard is a poor choice for maximizing efficiency and for the two-way communication that broadband users expect. Other well-developed standards can do a better job and will accommodate both multiple TV broadcast channels and individual user content requests. ATSC TV sets will not be made obsolete because translating one digital format into another is easy and inexpensive.

Broadcasters must pay the government 5% of their non-broadcast digital revenues, providing an ongoing perpetual public financial benefit. The FCC’s plan for huge one-time auction proceeds may make the federal budget look better for a year, but it will cheat future taxpayers and inevitably make the public pay for the bids through higher prices, because even competitors do not provide service below cost over the long term.

There are also important structural dangers in the FCC’s relentless drive to truncate TV spectrum. The first TV stations to fall will be small businesses, minority owners and stations serving minority audiences. They will be tempted by incentive auction money or may be squeezed out by new regulatory fees and burdens intended to discourage survival. Broadcast ownership will become more concentrated, notwithstanding concerns repeatedly voiced by FCC commissioners about lack of diversity in today’s media marketplace.

TV will become an all-pay commodity, with prices that historically have risen far faster than inflation. Auctions will deliver spectrum to the largest wireless companies, which have the most money to bid, even though they have accelerated wireless ownership concentration during the past decade and have generated complaints from rural areas about poor service and lack of access to the newest handsets.

In other words, even though there is much professed concern about today’s ownership concentration levels, the real long-term legacy of the current FCC will be the greatest increase in concentration of ownership in both the media and wireless industries that the nation has ever seen.

The FCC says that it wants its decisions to be data-driven, yet it is influenced by major corporate lobbyists who camp out daily in the FCC building and drown out the voices of entrepreneurs with new ideas.

The government’s spin machine is in full swing, through endless articles, speeches and panel discussions, designed to persuade the public that TV spectrum reallocation is the only hope for the future of our society. Commissioners are now advocates, not decision makers. Their premature announcement of conclusions, before a formal rulemaking even starts, has already scared capital away from new and better ways to use spectrum for both broadcasting and broadband.

It has always been difficult for the FCC to lead the way to truly new technology rather than adjusting regulations to accommodate what has already been developed. Today’s FCC shows no signs of breaking free from that history. It has already forced one innovative spectrum developer to suspend operations and seems determined to freeze the status quo and keep others out until its preconceived program can be implemented.

The FCC should reach for truly increased spectrum efficiency by letting the public vote with marketplace dollars on what services will be provided with spectrum instead of deciding by government fiat.

The way to accelerate the availability of wireless broadband now, without a long political process, is not by “unleashing” inanimate spectrum and putting it in a grab bag but by unleashing companies already serving the public and new entrepreneurs by removing technological straitjackets.

These companies include locally-owned broadcasters of all sizes, who are more likely to start broadband service sooner, serve rural areas, and provide more new jobs and new ideas than the FCC’s plan to give to the largest corporations more control over the spectrum that is supposed to belong to the American people.

Peter Tannenwald is a veteran communications attorney at Fletcher, Heald & Hildreth in Washington. He can be contacted at [email protected].