911 broadband network: brought to you by TV spectrum selloff

The latest budget deal out of Congress attempts a telecommunications twofer: …

Matthew Lasar – Feb 20, 2012 7:00 am | 14

Another day, another cliffhanger budget deal passed by Congress. The latest extends payroll tax breaks and unemployment insurance to millions of Americans. But the bill goes further. It attempts a resolution of two of the Federal Communications Commission’s stickiest wickets—the transfer of spectrum from television broadcasters to the wireless industry to curtail an anticipated mobile spectrum crunch, and the financing of a public safety broadband system for the nation.

Discussion drafts and the House version of the law authorize the FCC to allocate the so-called D-Block of the 700MHz band (758 to 763MHz and 788 to 793MHz) to use as a responder network for police, fire, and medical units. The legislation gives the Commission nine years to relocate first responder communications systems from their current location, the two-way radio “T-Band” (470-512 MHz), to the D-Block broadband zone. The money for this process will eventually come from auctions of spectrum used by TV broadcasters in the television bands to mobile ISPs.

But not at first. Before those funds are available, the Department of Commerce’s National Telecommunications Information Agency can borrow money from the Treasury to implement the program. Then “incentive auctions” will hopefully come to the fiscal rescue. These involve getting television station licensees to “relinquish voluntarily some or all of [their] licensed spectrum usage rights” by sharing the proceeds of auctions of that spectrum with the broadcaster.

Freeing it up

Federal Communications Commission’s Chair Julius Genachowski has offered conditional praise for the proposal. “I’m pleased that Congress has recognized the vital importance of freeing up more spectrum for mobile broadband, both licensed and unlicensed,” he noted, “although the legislation could limit the FCC’s ability to maximize the amount and benefits of recovered spectrum.”

It’s unclear from Genachowski’s statement which parts of the legislation he’s talking about. But the bill does restrict the extent to which the FCC can reassign broadcasters to different portions of the TV bands. And it includes provisions requiring “reverse auctions,” presumably to see how little broadcasters will take for their spectrum.

Nonetheless, this bill represents acknowledgment by Congress that a little more proactivity is needed if a national public safety network is ever going to get off the ground. In 2008 the FCC tried to auction off the D-Block zone as a combined commercial/public safety entity during its massive 700MHz sell off, but failed. No bidder was willing to accept the Commission’s asking price, especially since the commercial entity that won the bid would have to share the region with public safety groups at an uncertain cost.

Following that debacle, the FCC pondered various complicated alternative plans for selling off the D Block. But public safety groups around the United States said they just wanted to use their share of the band on a local or regional level. Finally, big telcos and public safety agencies began urging the Commission to ask Congress to allocate the D Block to public safety outright, which is what this bill does.

Uncertain prospects

There’s a certain elegance to the proposal—knocking off several digital fowl with one projectile. Ever since the publication of the FCC’s National Broadband Plan, Genachowski has been on the road warning of a “looming spectrum crisis” ahead for the wireless industry. But from the very start broadcasters have always been lukewarm to the whole idea of selling their licenses.

When we asked the National Association of Broadcasters two years ago about this incentive auction proposal, NAB Vice President Dennis Wharton pointed out that TV license owners just went through an expensive DTV transition—with a price tag of $10 billion by the trade association’s estimate. “These broadcasters have expressed little or no interest in ‘cashing out’ of broadcasting based on a speculative promise from the FCC that we will be receiving money in exchange for spectrum,” Wharton told us.

And on Friday, the Los Angeles Times interviewed the top brass at several TV broadcasting groups, who threw cold water on the idea. “We have no intention of giving up spectrum,” the CEO of Post-Newsweek Stations told the newspaper. Ditto, declared David Smith of the 74 station Sinclair Broadcast group, adding that he “hasn’t heard of any broadcaster who has said they have anything for sale.”

Of course, since the FCC hasn’t launched the auctions yet, it’s a little early to predict who will do what in face of actual cash-money for licenses. But this legislation represents, at minimum, a belated recognition that building a national public safety broadband network and getting more spectrum to the wireless industry won’t happen by osmosis.