Hail to the AuctionsIncentive auctions, expanding mobile broadband are Obama priorities 9/19/2011 12:01:00 AM Eastern
Spectrum auctions may have been an afterthought on the
deficit-reduction bill last month, but they are front of mind in
the new jobs package the administration has sent to Congress—a
document that carries a hypnotically repetitive “pass this bill” message
from President Barack Obama.
The incentive auctions were excised from the deficit bill for procedural
and political reasons. But with billions of dollars from the auctions earmarked
for deficit reduction and the broadband first-responder network
tied to them, the measure could have stronger legs this time.
TV broadcasters will be exempted from the
spectrum fees authorized by the legislation,
though apparently radio stations would not—
a partial victory for the National Association
of Broadcasters, which labeled spectrum fees a
nonstarter. Last week, the NAB reiterated that
its non-opposition to voluntary auctions still
carries a big “but,” being that “the FCC can’t
mandate a loss of local TV service to millions
of viewers, and broadcasters are held harmless
if they choose to remain in business.”
Going forward, much will depend on how the
NAB defines holding harmless. The jobs bill currently
authorizes the FCC to move broadcasters
whether they want to move or not—participation
in the auction is voluntary, but the FCC has
the authority to “repack” broadcasters to free up
spectrum, which the bill makes explicit. And
while the bill authorizes the FCC to compensate
broadcasters for that apparent forced move, it does not require it. The bill
does require that the FCC cover the costs of such moves, voluntary or not,
and pay cable providers for any costs to accommodate those moves.
While broadcasters have been pushing for more details on the incentive
auctions, the bill would give the FCC until three months before the
auction to tell the relevant committees in the House and Senate how it
plans to calculate payments to licensees.
The bill also asks the FCC to consider “the value of the spectrum vacated
in its current use,” which means the value as a broadcast channel rather
than for wireless mobile—the latter is generally calculated by economists
at a much higher value—combined with “the timeliness of clearing it.”
There could, therefore, be a premium over the broadcast value.
The spectrum auctions had a short and uneasy tenure in the deficit bill,
stripped in part because it was a revenue-raiser in a bill that the Republicans
insisted be confined to budget cuts. But the spectrum reclamation
from government and private broadcasters, the incentive auctions and firstresponder
network portions are a central element of the jobs bill. Part of
the National Wireless Initiative section, they take up 16 pages of the bill, or
about 10% of the total tree-kill, with the president brandishing a thick copy
of the legislation in his press conference unveiling it.
The president made expanding wireless broadband deployment to 98%
of the country a State of the Union priority, and he has beat the drum hard
for all the job proposals. Sounding like Peter Finch in Network, the president
called for the American people to push Congress to get the bill passed: “So
I want you to pick up the phone. I want you to send an email. Use one of
those airplane skywriters. Dust off the fax machine. Or you can just, like,
write a letter. So long as you get the message to Congress: Send me the
American Jobs Act so I can sign it into law. Let’s get something done.”
The FCC is clearly champing at the bit, given that it will take years to
reclaim the spectrum even after a successful auction.
Rick Kaplan, the FCC wireless bureau chief, said at a spectrum forum
sponsored by the Information Technology and Information Foundation
(ITIF) that it was time to attack the spectrum problem. He said the FCC
needed to think long-term and flexibly about spectrum policy, but that
incentive auctions are a “short-term step that we can do today.”
Suggestions have come from computer companies and others backing
ITIF that broadcasters should be forced to share channels if they don’t give
up spectrum—or else there needs to be a second digital transition. Kaplan
said those were things for the FCC and Congress to think about carefully.
But he also acknowledged the issue carries political and practical realities.
Kaplan said he could understand broadcasters saying: “I don’t want to be
moved, what’s in it for me?” He added, however, that the incentive auctions
were actually designed to say to broadcasters that there was a lot in it for
them: “Instead of being forced to move, you can actually get a lot of money
out of it, which seems great for the broadcasting industry to me.”