WASHINGTON-The Federal Communications Commission is crafting a politically correct auction plan that would convert TV broadcast spectrum into a launching pad for new wireless telecommunications services.
The initiative, briefly mentioned by FCC Chairman Reed Hundt at a Senate Commerce Committee oversight hearing last week and confirmed by his staff, would reallocate TV channels 60 to 69 and make the spectrum available through competitive bidding for next-generation voice, data and video wireless services.
The 10 TV channels (6 megahertz each) would yield 60 megahertz, enough, for example, to fuel two additional 30 megahertz broadband personal communications services.
The FCC, which has begun to float the proposal before officially unveiling it next month, has not decided how the broadcast spectrum would be divvied up among wireless services.
But as a technical matter, TV channels 60 to 69-which bump up against the 800 MHz band-are particularly well-suited for this use because of propagation characteristics for wireless mobile services like cellular, dispatch and other mobile radio services that occupy that band.
It is possible, on the other hand, that the FCC could adopt a flexible allocation approach and let market forces decide how the redesignated spectrum is used. Yet there is apt to be pressure from public safety and other private wireless sectors for a piece of the pie.
TV channels 60 to 69 are not heavily used by broadcasters, with less than 100 television stations in use nationwide.
The plan, which draws in part from industry and legislative input, has been carefully devised to accommodate and balance a number of prickly public policy issues.
For budget hawks, like Sen. John McCain (R-Ariz.), the plan in the short run would likely bring the federal government billions of dollars in auction revenues long before broadcasters complete their move from analog to digital technology.
Once that happens, broadcasters must give up a second TV channel loaned to each of them to make the cutover possible without disenfranchising a nation of TV viewers.
Some lawmakers, like McCain and former Senate majority leader Robert Dole (R-Kan.), have advocated selling digital TV spectrum right now instead of waiting until after a lengthy transition period.
The Clinton administration wants an early auction of analog TV channels.
McCain hammered FCC Commissioner James Quello, a Democrat with strong ties to the broadcasting industry, for his opposition to broadcast auctions.
“I believe the taxpayers deserve the maximum return on what they own,” said McCain.
Despite FCC efforts to preserve the transition, broadcasters do not embrace the FCC auction plan.
“We don’t see how it’s going to work and still provide a transitional channel for all television stations moving to digital transmission,” said Walt Wurfel, a spokesman for the National Association of Broadcasters.
But because broadcasters are better protected under the FCC plan than under prior auction proposals of McCain and Dole, it was suggested their protests are face-saving efforts intended perhaps to gain concessions in the FCC’s plan.
The wireless telecommunications industry favors broadcast auctions, pointing out that next-generation paging, dispatch and pocket telephone licenses have cost $20 billion and that if TV channels are not paid for, federal regulators might assess spectrum fees on all telecommunications carriers to make up any shortfall of anticipated auction revenues.
Moreover, it is unclear to what extent and at what cost to broadcasters TV station licensees would be able to offer wireless telecom services on the transitional digital channel.
Since public broadcasting has become such a thorny issue for key Republicans, who don’t want taxpayers to continue underwriting it but realize that outright abolition does not play well politically with voters, there is sentiment for establishing a trust fund for public broadcasting with some proceeds from the sale of TV channels 60-69.
Obvious benefits of such an auction are that it would open the door for more wireless competition and for new wireless services.
“There’s no doubt whatsoever that that particular band of spectrum is the beach-front property of cyberspace,” said Hundt. “Its propagation characteristics are highly desirable. It could be used for many, many different services. Clearly, it’s a great deal of money.”
When questioned by Sen. John Rockefeller (D-W.Va.) whether auctions could hurt local broadcasters in his state, Hundt replied, “I don’t frankly give much credit to the notion that auctions drive anyone out of businesses. I think what they do is attract more people into businesses and they tend to give the licenses to the people who have the ability to develop them to the maxim.
“There’s no guarantee, however, the ultimate winners of the licenses will be the same people who happen to be in the business today. One of the beauties of auctions is that they enhance competition by bringing in new entrants.”
The FCC auction plan, which will be presented as the channel allotment part of the advanced TV proceeding at the July 11 meeting, represents an ironic twist and poetic justice of sorts for the wireless industry.
In the mid-1980s, the FCC was on the verge of approving further UHF TV-private land mobile sharing on channels 14 to 69 but the initiative was nixed in part out of concern that spectrum was needed to be reserved for advanced TV systems.
Farther down the road, after the transition to digital TV is complete, more spectrum is apt to be available for wireless telecom services. FCC engineers are contemplating a digital channel allotment that sits in the middle of today’s analog broadcast channel scheme.
By doing so, new spectrum would be available in the VHF band, whose propagation favors high-powered, single antenna systems used by paging companies today, and in the UHF band where frequency re-use has become so popular and profitable.
The main thrust of last Tuesday’s Senate hearing was not spectrum policy, the headliner for Thursday’s hearing, but the topic tended to grab equal time alongside telecommunications reform implementation concerns expressed by Commerce Committee Chairman Larry Pressler (R-S.D.), who’s developing a grand spectrum bill, and by others.
