Genachowski: Claims of Spectrum Hoarding 'Not True'

Says broadcasters will not be forced from VHF to UHF allocations in spectrum plan
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FCC Chairman Julius Genachowski said Tuesday that
claims that cable companies and others are hoarding spectrum are not true,
that there is a spectrum crunch, and that spectrum can be reclaimed from
broadcasters without diminishing the service that remains and compensating them
for whatever dislocation there is, which the commission will try to minimize.

That came in a speech to the MobileFuture summit in Washington
Tuesday.

Genachowski called broadband is a disruptive new
technology that other countries have used to leapfrog the U.S.,
which is why the country has to put broadband at the top of its agenda.

He gave a shout-out to broadcasters as multiplatform players
and said that the FCC would not force them to move from VHF to UHF allocations
as part of any repacking of stations. But he also took aim at what he said were
misperceptions being perpetuated about the spectrum plan and its consequences.

The chairman said that the explosion in demand has led to a
spectrum crunch and the clock is ticking. He said career engineers are telling
him that demand is outstripping supply. "It's not like daylight
savings," he said. "We can't just turn back the clock."

Genachowski said that the transition won't be easy.
"We are not drawing on a whiteboard," he said, but must deal with
complicated legacy infrastructure.

While he said that broadcasters efforts to be multiplatform
players should be encouraged, he also said spectrum policy must change and
that past, less flexible allocation and use of spectrum by license holders
makes the FCC's job tougher. 

Being more efficient with current spectrum will only get the
FCC part of the way. Incentive auctions will be necessary as well, which he
called a market-based approach that will accommodate existing businesses that have
been shielded from those marketplace dynamics.

The chairman said it will be a win for broadcasters who want
to give up spectrum, and the remaining industry will be undiminished, if not
strengthened, position.

He took aim at what he said were continuing misimpressions
about plans for broadcasters.

He said there were not "vacant lots" of spectrum
going undeveloped, and that the suggestion there was spectrum hoarding was
"illusory." He also said that the spectrum crunch is exaggerated,
that the FCC had conducted sufficient spectrum inventory to know that an
incentive auction is necessary to reclaim spectrum, that broadcasters
subleasing spectrum (as Capitol Broadcasting proposed to the chairman last
week) won't free up the contiguous blocks necessary for national mobile
broadband services, and that the FCC will minimized dislocations in repacking
broadcasters, will fully reimburse the costs, will not force anyone from move
from a VHF to a UHF allocation, and that at the end of the day, broadcasters position
will not be minimized.

Below is the chairman's verbatim point-bypoint refutation of what he said were the misconceptions:

"First, there are some who say that the spectrum crunch is greatly exaggerated - indeed, that there is no crunch coming. They also suggest that there are large blocks of spectrum just lying around - and that some licensees, such as cable and wireless companies, are just sitting on top of, or "hoarding," unused spectrum that could readily solve that problem. That's just not true. Let's look at the facts.

"Multiple expert sources expect that by 2014, demand for mobile broadband and the spectrum to fuel it, will be 35 times the levels it was in 2009. Cisco has projected a nearly 60X increase between 2009 and 2015. This compares to spectrum coming on line for mobile broadband that represents less than a 3X increase in capacity. The looming spectrum shortage is real - and it is the alleged hoarding that is illusory.

"It is not hoarding if a company paid millions or billions of dollars for spectrum at auction and is complying with the FCC's build-out rules. There is no evidence of non-compliance.

And while of course the FCC will be vigilant in any cases of non-compliance, the spectrum crunch will not be solved by the build-out of already allocated spectrum. That spectrum was already built into the FCC's analysis of the spectrum shortage and does not detract from the desirability and necessity of adding the incentive auction tool to the FCC's arsenal.

"Second, some have argued that giving the FCC incentive auction authority should wait for a spectrum inventory. The good news is that we have already completed a baseline spectrum inventory that tells us more than enough to conclude that incentive auctions are an essential item to add to the FCC's toolkit.

"Our inventory confirms that there are no hidden vacant lots of commercial airwaves, but that there are a few areas well-suited to mobile broadband, such as the TV and MSS bands. We certainly know more than enough about existing spectrum uses to move forward with a mechanism that would simply bring new market-based options to these bands.

"Third, others have suggested that, instead of having incentive auctions, we should just allow broadcasters to sub-lease their spectrum on their own. This won't solve the spectrum crisis because it won't free up contiguous blocks of spectrum over broad geographic areas, which is what's needed for mobile broadband.

Keep in mind that the original broadcast allocation - the one that still exists - is a checkerboard approach with large gaps between full-power broadcast assignments.

"Freeing up, say, 6 MHz on Channel 9 in Detroit and 3 MHz on Channel 36 in Albuquerque and 6 MHz on Channel 28 in San Francisco won't allow mobile providers to offer the kinds of nationwide mobile services that consumers demand.

"And this approach would also preclude the approach that would unlock the most value from old allocations, denying taxpayers a significant deficit reduction benefit while also leaving the country on a path to higher mobile prices.

Fourth and finally, we know that some broadcasters have concerns about the channel realignment that would follow a reallocation of broadcast spectrum. We understand those concerns and will do our very best to address them.

Our plan would seek to minimize the number of stations affected, and it calls for fully reimbursing broadcasters' costs for such moves.

"Plus, we would propose that stations not be forced to move from the UHF band to the VHF band; rather, any such moves would be purely voluntary -- indeed, we have suggested that stations willing to do so could participate in the auction and put a price on a UHF to VHF move.

"I would like to acknowledge the many individual broadcasters who have come forward and rolled up their sleeves to work through these and other issues in a pragmatic and constructive manner.

"We're also committed to limiting any loss of service to over-the-air television viewers. In fact, we anticipate that the consumer impact of realignment will be quite small, as any shift in broadcaster frequencies will merely require that over-the-air viewers rescan their televisions or converter boxes.

"The simple truth - the overarching context for the few easily addressable questions that have been raised about incentive auctions -- is that the enormous benefits to consumers and to our economy of incentive auctions overwhelm the potential costs.

"With the clock ticking, the real question is: how can we afford not to bring market-based incentive auctions to spectrum allocations?"

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