ANALYSIS: FCC Has Legal Obligation to Preserve Free TV

Legislators suggest FCC should not push too far
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It appears that the FCC could not reclaim all of
broadcasters' spectrum even if it wanted to. That, however, doesn't mean the
commission can't recapture a lot of real estate.

But what happens if too many broadcasters volunteer to
give up their spectrum-including, for instance, all of the stations in a
particular market-when the FCC comes calling with an offer to pay broadcasters
to relinquish it?

FCC broadband plan spokesman Mark Wigfield says the
commission, by law, has to ensure that some level of over-the-air service
remains in each market. That means the commission, at least under current law,
can't clear the broadcast band. It also means that not everyone who wants a
buyout may get it.

FCC Chairman Julius Genachowski said in a Feb. 24 speech
to the New America Foundation that, as part of the national broadband plan, the
FCC will propose a voluntary Mobile Future Auction that will permit TV
broadcasters and other licensees to give up spectrum in exchange for a share of
the proceeds. Agency officials had previously signaled that the proposal would
be part of the broadband plan.

"[T]he FCC is already required by law to make sure there
is a fair representation of broadcasters in every state," Wigfield says. "There
are a number of levers the FCC could use to ensure continuation of over-the-air
broadcasts in a market, including establishing rules in any spectrum auction
that would require a level of over-the-air service remain."

Wigfield's reference to fair distribution stems from the
Telecommunications Act's requirement that "in considering applications for
licenses, and modifications and renewals thereof, when and insofar as there is
demand for the same, the Commission shall make such distribution of licenses,
frequencies, hours of operation, and of power among the several States and
communities as to provide a fair, efficient, and equitable distribution of
radio service to each of the same."

"If everybody in a market wanted to take their deal? Yeah,
that would be a problem," said a broadcast attorney who asked not to be
identified. He says that absent a band-clearing, he isn't sure how different
the FCC's voluntary plan is from broadcasters' current ability to turn over
spectrum-and in this case, lease it-for compensation.

"As long as you put on one free standard-definition
signal, which does not take up much space, you can sublease the rest of it.
This really doesn't seem to change much unless you want to go out of business."

Veteran broadcast attorney John Crigler of Garvey
Schubert Barer agrees that the commission has to navigate this statutory
requirement concerning fair access, but Crigler sees it more as a hurdle than a
wall: "This is something the FCC is going to have to deal with if it starts to
recapture broadcast spectrum. There is a mandate under [Section] 307(b) to
provide a fair distribution of broadcast services everywhere."

But that provision does not necessarily give Crigler much
comfort. "One reason is that you can change the statute, particularly
when a large sum of money is raised under a congressional nose," he points out.
"And second, it might just complicate the recapture rather than make it
impossible. The way that 307(b) has been read is that [it provides] at least a
first broadcast service everywhere," which the FCC could do without changing
the statute by leaving at least one station in every market. That, however,
does not resolve the problem of figuring out who stays and who goes.

Some legislators-John McCain comes to mind-have
complained long and mightily about the prospect of broadcasters being
compensated for their public spectrum, in reference to analog and digital
duplication during the DTV transition. In this case, congressional opposition
to compensation might throw a monkey wrench into the FCC's reclamation plans;
that could be a good thing for broadcasters, especially those who might
otherwise view the "voluntary" program as a mandate cloaked in an invitation.

Both House Communications Subcommittee Chairman Rick Boucher
(D-Va.) and former Energy and Commerce Chairman John Dingell (D-Mich.) said
last week that they opposed any mandatory move of broadcasters off the band.
Boucher added that whatever moves the FCC makes should not reduce any
broadcaster to only standard-definition signals, and it should first do a
thorough spectrum inventory to figure out where the spectrum should come from.

The likelihood of an
oversubscription by broadcasters to the plan is not great, if the National
Association of Broadcasters' vociferous defense of all its spectrum is any
indication. Still, there are plenty of private equity companies in the business
that might take the government-sponsored opportunity to cash out.

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