FCC Gets Earful From House on Spectrum of Issues

Spectrum hearing ranges into ownership and network neutrality issues

By John Eggerton -- Broadcasting & Cable, 12/12/2012 1:54:57 PM

House Energy and Commerce Committee members came prepared with a boatload of questions for the five FCC commissioners in a Wednesday hearing on the status of the FCC's framework for spectrum incentive auctions, but a number of the flashpoint issues were off that point.

The hearing was held in the Communications Subcommittee, which helped draft the legislation that directed the FCC to auction broadcast spectrum.

FCC chairman Julius Genachowski, when pressed on why the Title II docket was still open, said the public was still commenting and that he had no plans to close it. He was advised by Republican Marsha Blackburn (R-Tenn.) that closing the docket, which is the proposal to apply some common carrier regs to Internet access service, would provide some regulatory certainty. Genachowski countered that he called on Verizon drop its legal challenge to the Open Internet order, saying that is what would provide some certainty.

Several legislators brought up diversity and the FCC's media ownership proposal. Leading that charge were Reps. Bobby Rush (D-Ill.) and Anna Eshoo (D-Calif.). Rush said he was tired of a procession of platitudes from commissioners over his past 17 years on the committee, "but absolutely no performance." He thanked the FCC for putting off a vote on the item -- the chairman had wanted to vote it by the end of the year, but has effectively put that off, at least until early January. But Rush said he was "tired of this continuum of excuses," and wanted to know what, other than a tax certificate policy, could be done to boost minority ownership.

All the commissioners agreed that it was not acceptable that there were only 28 full-power TV stations in the country owned by minorities.

Genachowski pointed to the FCC's recent vote to open up more low-power FM licenses, FCC efforts to bring together capital and potential women and small business entrepreneurs, the Open Internet order, which he said keeps the Internet and its content available for developing and reaching and audience, and also suggested earlier in the hearing that incentive auctions were a net gain for minorities since it could be an infusion of capital for ownership who could remain in business via sharing or moving channels.

The chairman defended his decision to proceed to a vote on loosening cross-ownership rules, saying it was time to wrap up the 2010 quadrennial and that the FCC would continue to make diversity a core mission, including seeking funding to complete the studies that would allow it to better justify a number of associated diversity proposals, which were remanded back to the FCC by the Third Circuit Court of Appeals for better justification.

Critics of that dual-track strategy continue to argue that the FCC should not take any action on its rules until their impact on diversity can be gauged via those studies.

The spectrum issues at the hearing were many and varied, but the political division broke out as expected.

Democrats on the panel stood by the FCC's proposal to set aside guard bands in the broadcast spectrum that would not be auctioned but could be used for unlicensed wireless. Republicans suggested that was a "suboptimal use" of that spectrum, as Communications Subcommittee chairman Greg Walden put it. Walden suggested that the guard bans were too fat -- 6 MHz up to 10 MHz -- and that it could mean essentially reducing the auction take by $7 billion. Commissioner McDowell said that might be lowballing the cost, and that it could mean cutting the take by as much as $14 billion to $16 billion.

While a number of Republicans echoed commissioner Ajit Pai's concern that the auction, according to the FCC's proposed framework, could be closed without taking in enough to pay for an interoperable emergency broadband network, all five commissioners agreed paying for the net needed to be one of the goals of that auction. Pai said he hoped the final auction closing condition would reflect that.

The other big divide was over whether the FCC should be able to limit to what extent larger players could potentially concentrate more spectrum via the auction. Democrats generally favored the FCC using its spectrum screen or spectrum aggregation authority to prevent undue concentration, while Republicans countered that would be a case of the FCC over-engineering the auction and could result in reducing the auction's take.

Walden said the committee did not want to micromanage the FCC, but instructed it to follow the statute, including maximizing the proceeds.

Among the other key takeaways from the lengthy hearing:

Chairman Walden said, in having a letter from the Expanding Opportunities for Broadcasters Coalition, that there were more than 25 broadcasters expressing their desire to participate in the auction. The coalition is not revealing its membership.

Commissioner McDowell said he was not sure the FCC would get even 65 MHz from broadcasters for re-auctioning -- the FCC's initial target was 120 MHz, though it has since stopped citing that figure.

Rep. John Dingell (D-Mich.), using his traditional "yes or no" approach to questioning, got the chairman to commit to explicitly defining the "all reasonable efforts" the FCC is required to take to replicate the coverage areas of stations moved or repacked to make room for spectrum to auction for wireless broadband.

Rep. Rush said that while there were 31 minority-owned cable systems back when the there was a tax certificate policy. "Currently there are no minority-owned cable systems operating today."

Genachowski said he would work with the committee to preserve low-power TV stations, "where it makes sense," but also has an obligation to the statute. The FCC has also indicated low-powers, who do not get to participate in the auction, could find new homes on multicast spectrum or online.