The Federal Communications Commission, citing a need for more spectrum, is mulling an auction on broadcast television frequencies for more broadband, reports Reuters.
One proposal (pdf) would be to keep VHF channels (2-13) for over-the-air broadcasting and make the UHF channels (14-35, 37-51) available for reallocation. According to the Brattle Group study, such a proposal would free up 216 MHz or 73% of the frequencies. The 10 million people who rely on over the air broadcasting may also get subsidized “lifeline” cable if their viewing is disrupted.
Up to $62 billion of spectrum could be made available for the cost of $9 billion to $12 billion. Such a significant mismatch between value and cost indicates radio spectrum is currently inefficiently allocated. Also, the gains-from-trade of as much as $50 billion only represents the direct dollar impact of reallocating the broadcast spectrum. Consumer benefits from the wireless sector would likely be between $500 billion and $1.2 trillion. These additional benefits represent both cost savings and increased usage to consumers for existing services and new services that can only be developed and offered in a more spectrum abundant marketplace.
But it is not known when and how the FCC would formally make the move to force broadcasters to auction a portion of their airwaves. The agency has released few details.
“We believe there is a material likelihood that at least some broadcast spectrum will ultimately be repurposed, though this will be a long process,” Stifel Nicolaus analyst Rebecca Arbogast said.
“We don’t know all the specifics of the FCC proposal, but at this point, it’s not a very appealing proposition to most broadcasters,” said Dennis Wharton, spokesman for the National Association of Broadcasters.
The 700 Mhz auction generated more than $19 billion for the Treasury last year. AT&T and Verizon Wireless, represented almost 75% of that revenue.
The CTIA has asked the FCC to make up to 800 MHz of additional licensed spectrum available for them. Blair Levin, the FCC official in charge of the broadband plan, wrote in his blog that there was about 50 MHz of spectrum in the pipeline, “and it’s not very good spectrum for mobile broadband.”
Meanwhile $2.4B in AWS spectrum was bought by cable operators Comcast, Time-Warner Cable, and others, but the frequencies have not been used. SpectrumCo, an AWS bidding consortium with Cox, Comcast and Time Warner Cable, picked up 137 licenses in 2006’s Advanced Wireless Services auction (at 1.7/2.1 GHz). SpectrumCo won a total of 137 AWS licenses for $2.37 billion. Comcast’s share was $1.29 billion, followed by Time Warner Cable’s $632.2 million, and Cox’s $248.3 million. (See SpectrumCo Gets Licenses)
|Bidders||Net total of high bids|
|1. T-Mobile||$4.2 billion|
|2. Verizon Wireless||$2.8 billion|
|3. SpectrumCo||$2.4 billion|
|4. MetroPCS||$1.4 billion|
|5. Cingular||$1.3 billion|
|6. Cricket||$710 million|
|7. Denali Spectrum||$365 million|
|8. Barat Wireless||$127 million|
|9. AWS Wireless||$116 million|
|10. Atlantic Wireless||$81 million|
Sprint got out of cable’s spectrum investment group, SpectrumCo, leaving $2.4 billion in AWS licenses in New York, Boston, Washington, Detroit, Atlanta and other major cities for cable operators. But cable operators haven’t touched their AWS frequencies (at 1.7/2.1 GHz). Instead, Comcast and T/Warner invested over $1.6 Billion in their Clearwire joint venture and now use Clear’s 2.6 GHz spectrum for mobile broadband.
Cable operators are sitting on their $2.4B in unused AWS spectrum, hoping to drive up prices through scarcity. Their strategy appears to be working.
“We are just entering the age of mobile data,” said Blair Levin, the FCC’s top broadband coordinator, who added that regulators are exploring all options as they mine for spectrum. “We are looking at everything and talking to everybody.”
“White Spaces” could have as much an impact on the economy as Wi-Fi has had in the last decade — if it’s kept free. The CTIA now has more money and influence than the NAB — and money talks.
The FCC adopted rules for unlicensed use of tv white spaces on November 4, 2008 (pdf). Giving away unused television spectrum for unlicensed wireless broadband wouldn’t generate any money for the Treasury, although it could provide broadband to poor and rural citizens. White spaces might also help the newspaper and magazine industry, if ubiquitous “free” spectrum is available for e-books and magazines.
The FCC’s broadband plan, mandated by Congress, is due next February and the consideration of freeing spectrum for commercial use isn’t final. Broadband.gov overviews initiatives intended to accelerate broadband deployment across the United States.
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