The Federal Communications Commission has put U.S. spectrum policy on a path to the world’s first incentive spectrum auction to repurpose broadcast television spectrum for mobile broadband use. But broadcasters appear determined to hold onto their spectrum.
Carriers are supporting the FCC’s auction proposals, eager to see more spectrum freed for mobile broadband use. However, broadcasters — who are supposed to participate voluntarily in the new auction format — have historically been reluctant to give up spectrum. Even before the FCC meeting, some legislators and industry insiders were expressing reservations about coverage loss and fears that the auction may not be strictly voluntary.
The FCC said it anticipates holding the world’s first incentive spectrum auction in 2014. This auction would have three major pieces, as outlined by the commission.
- A reverse auction in which broadcast VT licensees submit bids to voluntarily relinquish spectrum usage rights in exchange for payments.
- Repacking the relevant bands in order to free up a portion of the ultra-high frequency (UHF) and configure it into contiguous blocks of spectrum suitable for flexible use.
- A “forward auction” of initial licenses for flexible use of the newly available spectrum.
Dennis Wharton, executive vice president of communications for the National Association of Broadcasters, said that the complexity of the proposed auction “is going to make the digital TV transition look like a Sunday picnic.”
Wharton added that when the FCC’s National Broadband Plan — which outlines a national strategy on fixed and mobile broadband — came out several years ago, it may have seemed like broadcasting was a dying business. Now, he said, “nothing could be further from the truth,” as the industry has cycled out of the recession and advertising has bounced back.
The FCC, meanwhile, is under intense pressure to open up new spectrum to accommodate the exploding demand for mobile broadband services. FCC Chairman Julius Genachowski said that the U.S. is in “a global bandwidth race. It’s similar to the space race in that success will unleash waves of innovation that will go a long way toward determining who leads our global economy in the 21st century.”
He added that the spectrum crunch is painful for both consumers and network operators. End users, he said, “have to deal with dropped connections or spinning pinwheels when they’re checking the web on the go.” And carriers and wireless innovators “won’t be able to seize the opportunities of [the U.S.’s lead in deploying LTE networks] without taking care of our invisible infrastructure – wireless spectrum.”
The government is working on a goal to increase mobile broadband spectrum to 500 MHz by 2020, but it appears to be lagging behind in accomplishing that, according to a report by Deloitte on how the spectrum shortage can harm U.S. leadership in 4G technologies.
“The incentive auction is … a highly visible indicator of America’s ability to increase the role of mobile broadband in both the commercial and public safety spheres,” according to the report. “How this project fares can have a major impact on the momentum of the overall undertaking. Its successful conclusion is thus an example of a priority goal that could feature prominently in an overall policy framework.”
The commission is asking for comment on a number of band plans for reclaimed broadcast television spectrum in the 600 MHz band, including a proposal for using 5 MHz blocks, in which “the uplink band would begin at channel 51 (698 MHz) and expand downward toward channel 37 based on the amount of reclaimed spectrum, and the downlink band would begin at channel 36 (608 MHz) and likewise expand downward. We seek comment on establishing 6 megahertz guard bands between mobile broadband use and broadcast use, and propose to make this spectrum available for unlicensed use.”
Both AT&T and the Competitive Carriers Association released statements approving the FCC’s actions.
Competitive Carrier Association President and CEO Steven Berry thanked the FCC for contemplating spectrum aggregation limits and the incentive auction.
“Taken together, and if properly implemented, these two spectrum proposals may help restore competition to the mobile market economy, unleashing economic growth and innovation. Fair and reasonable access to interoperable spectrum has been a major problem for competitive carriers, and the FCC’s decision to move forward on these NPRMs is a positive step to ensuring a competitive framework,” said Berry. He added that the commission’s action “supports continued light touch regulation in the mobile industry.”
“Wireless carriers need a clear and reliable understanding of when and under what circumstances spectrum acquisitions will be permitted, something we do not have today,” said Joan Marsh, AT&T vice president of federal regulatory. “With today’s FCC action, spectrum policy can now be taken out of merger-specific proceedings, placed in an industry-wide, open and transparent proceeding, and ultimately subjected to judicial review.”
Marsh added that bringing new spectrum allocations to market and maximizing carrier participation in auctions was “equally important,” and that A&T looks forward to working with the FCC to free up new spectrum bands for mobile broadband services.
However, the FCC made clear that the three-pronged incentive auction of television spectrum is likely to be filled with question marks.
Because the reverse auction must be held first to determine broadcasters’ participation, and then the spectrum repacking must take place, the FCC warned that “we will not know in advance the amount of spectrum we can make available in the forward auction, the specific frequencies that will be available and, perhaps, the geographic location of such frequencies.”
Instead of the old model that relied on a single band plan with identified frequencies, a set number of spectrum blocks and a uniform set of geographic area licenses, the new auction framework must be flexible enough to accommodate varying amounts of spectrum in different locations, the commission added.
NAB president Dennis Wharton says he does not expect broadcasters to flock to an auction that would hurt their spectrum holdings and limit their ability to provide new services such as mobile digital television, HDTV and perhaps ultra-high-definition or 3D TV.
“There are almost 1,800 television stations across the U.S.; I wouldn’t be surprised if some of them would kick the tires on this and look to take advantage of the opportunity to go out of business,” Wharton said. “But the vast majority of stations, from our forecast, plan to stay in broadcasting.”
Broadcasters were already forced to return 108 MHz of 700 MHz spectrum, which was auctioned off to wireless carriers. Wharton says that the NAB “does not concede that there is a spectrum crisis,” and that idle spectrum possessed by various wireless companies should be fully deployed before broadcasters are asked to give up even more.
“When broadcasters hear about this notion of a spectrum crisis, our response is, gosh, why don’t you deploy the spectrum that you’ve got now, build out the network, and come back to us if there’s really a problem,” Wharton said.
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