Federal Communications Commission

Winners and Winners

January 19th, 2010 by Phil Bellaria - Director, Scenario Planning, Omnibus Broadband Initiative

Very early in the process of developing the National Broadband Plan, we recognized the impact that exploding growth in wireless broadband usage would have on spectrum policy. Though the Plan will make recommendations spanning many areas of spectrum policy - including getting spectrum "in the pipeline" to market and fostering more productive use in existing broadband bands - there's no getting around the need to reallocate some spectrum from current uses to broadband use.  We must get more spectrum out there for broadband if we want a world-leading broadband infrastructure.

The perception, reinforced by recent press articles and television commercials, is that any such reallocation effort creates “winners” and “losers”. So, the public discussion about spectrum policy has centered on reallocations and, more specifically, reallocation from TV broadcasters.  It’s just more interesting and tangible to talk about or report on something that could have winners and losers… human nature, I suppose.  I hesitate to perpetuate this over-emphasis on one aspect of spectrum policy, but given the attention it’s received, I do think it’s important to explain our current thinking.

The most attractive spectrum for wireless broadband is below 3.7 GHz; since broadcast TV bands occupy 294 MHz within that sweet-spot, they have naturally been one of the areas we are examining. For example, on average there are 20 full-power TV stations in the top 10 markets; they directly use only 120 MHz of the 294 MHz allocated to broadcast TV. Across all markets, they only directly use on average 54 MHz (9 channels) of the 294 MHz total.  Naturally, we asked the question – is there a more efficient way to deliver free over-the-air TV and reallocate spectrum for broadband use?

In trying to answer this question, we have followed 3 core principles:

  • Preserve free, over-the-air TV
  • Reallocate a portion of the broadcast TV bands to broadband use
  • Establish a market-based mechanism to effect that reallocation

Initially, we identified a set of scenarios that would meet those principles through various means.  We analyzed the impact of each scenario on consumers and spectrum reallocation, gathered feedback on the scenarios from broadcasters and other stakeholders, and absorbed thousands of pages of public filings, analyst reports, and other research material – all to refine and narrow options.  Sounds a lot like a typical strategic planning process, huh?

Where have we landed?  Of course, the process is not done yet, but our current preference is to establish a voluntary mechanism through which owners of broadcast TV stations could choose what they want to do with the spectrum they current license.  Some may choose to retain all of it; some may choose to share bandwidth with another station for continued high-definition, standard-definition, and/or mobile DTV broadcasts; some may relinquish their license to pursue alternative business models.   Station owners could receive a share of the auction proceeds from the spectrum they relinquish.  We would repack remaining stations in the most efficient manner, and reallocate the spectrum “freed” to flexible, broadband use.

I hate to disappoint, but such a mechanism wouldn’t create winners and losers, only winners and… more winners.  Broadcasters would win more options in a challenging business and investment climate for the industry; consumers would win more innovation in wireless broadband services and continued free, over-the-air television; auction winners would win capacity to meet customer needs (but pay for that capacity, of course).

Like any strategic planner would, we continue to explore other alternatives if the voluntary mechanism doesn’t receive Congressional authorization or result in sufficient spectrum reallocation – e.g., changes to the broadcast architecture to reduce spacing between channels, auctions of overlay licenses, mandatory channel sharing options. 

Those alternatives are fraught with complexity and tradeoffs.  We can get out of the “winners and losers” mindset if we actively support and pursue a voluntary, market-based mechanism to effect the reallocation of spectrum to meet the country’s future needs for wireless broadband.

One Response to “Winners and Winners”

  1. Brett Glass says:

    Unfortunately, Phil, allowing the broadcasters to sublicense or auction off their spectrum could create "winners and losers" too. Large cellular providers would sweep in and snatch up the spectrum so as to foreclose competition, then do nothing with it -- preventing the public from receiving new and competitive services. (Remember the DoJ's recent filing, in which it noted that the foreclosure value of spectrum is often far greater than its utility value?) A regime in which this "beachfront" spectrum could be shared via cognitive radios and spectrum etiquettes would be far preferable.

    I operate a small wireless ISP which -- under the current auction regime -- does not have any prospect of getting the slightest shred of licensed spectrum to call its own. I and my colleagues could be wonderful competitors -- if only we were able to access this artificially scarce resource on which large corporations have cornered the market. What's more, because we have the lowest deployment cost per customer of any technology in rural areas (including satellite, if you count the cost of the customer equipment), we can reach more unserved and underserved areas -- more economically -- than anyone. Please review my presentation from the "wireless" Broadband Plan workshop and include the notion of making this spectrum available on a nonexclusively licensed basis -- subject to the use of cognitive radios and spectrum etiquettes such as 802.11y -- part of the Broadband Plan.

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