incentive auction

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Congress finally has given to the FCC authority to conduct spectrum auctions to reclaim parts of the TV spectrum for wireless users, and most DC-based industry associations, including the NAB, have reacted favorably. For a process that was so controversial, this seems like a very favorable result. Television stations, in particular, will have much relief from concerns about the forced-reallocation of their operations to less favorable spectrum. While most trade press reports have reported on these statements and the very general outlines of the legislation, few have looked closely at the provisions that apply to the broadcaster auctions. Just what do they provide?

The auction provisions were adopted as part of the legislation that just extended the Social Security payroll tax deduction rollbacks, extended unemployment benefits, and fixed certain limitations that had arisen on Medicare reimbursements to doctors. All these benefits needed offsetting revenues to avoid unduly increasing the Federal deficit, and the one seemingly easy place to “find” money, was through spectrum auctions. So Congress ordered the President to identify certain Federal spectrum that could be made available for wireless users, and also authorized the FCC to conduct auctions of broadcast spectrum, but under the very specific guidelines set out below.Continue Reading Congress Authorizes FCC Incentive Auctions to Clear Part of Broadcast TV Spectrum for Wireless Broadband Users – The Details of the Legislation

The battle over the reclamation of television spectrum for wireless broadband rages on, and some in the television industry fear that the future of over-the-air television may be sacrificed to Congressional attempts to reduce the Federal deficit. The current Congressional “Super Committee” that is attempting to find billions of dollars in spending reductions to lower the Federal deficit is reportedly considering “finding” potentially 20 billion dollars or more from the proceeds of an auction of spectrum reclaimed from television broadcasters. Various Congressional proposals have been submitted for the committee’s consideration, essentially to authorize the FCC to conduct “incentive auctions” to reclaim some TV spectrum. But, the National Association of Broadcasters and others have claimed that broadcast television service to a number of markets, particularly those in areas near the Canadian border and in urban, densely populated northeast corridor between Boston and Washington, will be particularly hard hit – imperiling the continued existence of free over-the-air service to some markets, including Detroit. In other markets, broadcasters fear there will be a lessening of the protections from interference that stations currently enjoy, or a repacking of the spectrum that will put stations on new and potentially inferior channels, without reimbursement of the costs of relocation.

The proposal for the reclamation of television spectrum was first advanced in the Commission’s Broadband Report, where the FCC committee that drafted the report suggested that as much as 120 MHz of television spectrum  be reclaimed for use for wireless broadband – 20 television channels from 32 to 51 on the TV dial.  With tablets and smartphone usage growing quickly, and the ever-increasing demands for wireless spectrum to deliver video, audio and other rich internet content, the Commission fears a spectrum shortage – especially in certain urban markets. As over-the-air viewing rates have been falling over the last two decades as more people sign up with multichannel carriers, the Report suggested that the TV band could be shrunk, with some of the spectrum being redistributed to wireless. TV stations could be incentivized to surrender their spectrum for wireless use or to share channels, an option that the proponents of reclamation claim is very feasible, as digital technologies now allow one television channel to rebroadcast multiple streams of programming.

Television broadcasters have fought back, claiming that, while the digital transition does allow for more channels in the same spectrum, they are just now rolling out new uses of that spectrum – including new programming streams and, soon, mobile video targeted to smartphones and other digital devices. An article in one newspaper  last week reviews some of the new ways for over-the-air TV viewers to get access to additional video programming to augment over-the-air programs, allowing some consumers to “cut the cord” – eliminating their multichannel video subscriptions. Some studies have suggested that such cord-cutting opportunities, combined with the recent economic turmoil, has actually increased the amount of over-the-air television viewing in the last few years, reversing or slowing the trend of decreasing broadcast TV viewership.Continue Reading Reclaiming Over-the-Air TV Spectrum for Wireless Broadband Use – What Will the Budget Super Committee Decide?

The debate over repurposing some of the television spectrum for wireless broadband have been raging over the normally quiet Washington summer, as issues as diverse as the budget negotiations, the tenth anniversary of 9-11 and international treaties all play their part in the discussions.  Whatever changes are made could have a profound impact on TV broadcasters nationwide, not just those in the congested metropolitan markets where everyone acknowledges that any spectrum crunch that may exist would be most acute.  This week, Congressman John Dingell, long one of the most influential Congressmen on telecommunications issues, complained that the FCC was deliberately withholding details of its plans for spectrum allocation – plans that the National Association of Broadcasters have challenged as unworkable as they would doom over-the-air television in many markets, especially those near the Canadian border.  With all the issues swirling around the spectrum reallocation debate, the realistic timing of any reallocation of the spectrum and the real impact on the free over-the-air television broadcast industry are becoming major issues being considered in Washington.

The FCC has been pursuing the idea of repurposing some of the television spectrum for wireless broadband use since well before the Broadband Report was issued last year.  As we summarized in our review of the Broadband Report, the FCC suggested that as much as 120 MHz of television spectrum could be reallocated from TV to wireless broadband uses.  The FCC and the consumer electronics and wireless industries have contended that there is a looming spectrum crunch, particularly in major markets, as smart phones, tablets and other connected devices become a bigger part of the lives of many consumers in serving not only their entertainment needs, but also providing information and business services.  The FCC’s Broadband Report thought that as much as 500 MHz of spectrum would eventually be needed, and that 120 MHz could come from the television spectrum, which proponents feel has been underutilized by broadcasters since the digital television transition in 2009.  Proponents of the reallocation contend most consumers get their TV service not over the air, but from cable or satellite providers, so the need for spectrum dedicated to broadcast television is far less than it was 70 years ago when the television service was first popularized.  Broadcasters, of course disagree with that assessment, contending that the digital transition is still very new, and that uses of the digital spectrum – including a mobile DTV service and multicast channels – are just developing.  Moreover, TV broadcasters have argued that their digital offerings, when combined with Internet service, are providing an option to many to "cut the cord" from pay TV options, leading to more over-the-air viewing.  In recent weeks, as detailed below, the National Association of Broadcasters has also been contending that the proposed reallocation would irreparably damage the over-the-air television industry, especially in markets in the Northeast and near the Canadian border where, in some markets, the reallocation would be impossible without ending most or all over-the-air television service.  The radically different pictures painted by the participants in this debate have led to some of the recent charges that the FCC is being less than forthcoming about the manner in which this transition would occur and the impact that it would have on broadcast TV. Continue Reading The Debate Continues Over Using TV Spectrum for Wireless Broadband – Incentive Auctions, International Considerations, Deficit Reduction, and Public Safety All Play a Role

In another example of how seriously the FCC is considering the reallocation of portions of the TV spectrum for wireless broadband use, the Commission today issued a Public Notice freezing any new petitions for changes in the channels of television stations.  Since the DTV transition, almost 100 stations have changed channels – mostly moving from VHF to UHF channels, as television operators have in determined that VHF channels are subject to more interference and viewer complaints about over-the-air reception.  Many predict that these problems with the remaining VHF stations will be worse when the new mobile DTV devices roll out later this year.  Yet, as the FCC is looking at implementing its plan to recapture portions of the television spectrum for use by wireless broadband, this freeze has now been adopted.  No new Petitions for channel changes will be accepted, though requests already on file will be processed.

The FCC itself has acknowledged the difficulties with the reception of digital DTV signals broadcast on VHF channels, and has asked for public comment on how these difficulties can be overcome, though many engineers seem to feel that, short of repealing the laws of physics, the quest may be an impossible one.  In that same proceeding, the FCC has asked about how it should repack the television spectrum, so that the Commission could provide a contiguous swath of spectrum for broadband users.  These actions are being taken by the FCC even though, so far, there is no legislation authorizing the incentive auctions that would be used to pay some broadcasters to abandon their spectrum.  Without such legislation, the FCC cannot move forward with its plans – thus this freeze may be in place for some time.Continue Reading FCC Freezes Channel Changes By Digital TV Stations While Evaluating Reallocation of Television Spectrum for Broadband Use

The Commission’s recent Notice of Proposed Rule Making proposing a framework and time line for the transition of Low Power Television stations to digital operations — which we wrote about last month here — was published in the Federal Register today setting December 17, 2010 as the deadline for Comments and January 18, 2011 as…