President Stumps For Paying Broadcasters For Voluntary Exits - Broadcasting & Cable

President Stumps For Paying Broadcasters For Voluntary Exits

Will also propose putting $5 billion in USF for one-time 4G wireless push.
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President Barack Obama this week is actively pushing for "voluntary" incentive spectrum auctions that would  pay broadcasters and others to clear off some spectrum real estate as part of his recently announced National Wireless Initiative to expand wireless broadband to 98% of Americans within five years. That is the same timetable for getting broadcasters to give up as much as 120 MHz of spectrum (multiple FCC sources have suggested the figure is not an immovable object).

The president will also call for government creation and funding of the long-contemplated national, interoperable public safety communications network. He supports legislation reallocating the D Block (Sen. Jay Rockefeller (D-W.Va.) has introduced such a bill, as well as investing in building out that network.) White House staffers briefing reporters on the plan called it "a central part of [the president's] overall economic agenda," and the president's plan to "win the future."

The plan will be outlined by the President Thursday in a speech at Northern Michigan University in Marquette. He will also participate in a distance learning demonstration, one of the FCC's national priorities for broadband. The president plans to invoke a spectrum "crunch" that needs to be addressed by a combination of more efficient use and incentivizing current users to give up some real estate.

"As recommended in the FCC's National Broadband Plan, legislation is needed to allow the FCC to conduct 'voluntary incentive auctions' that enable current spectrum holders to realize a portion of auction revenues if they choose to participate," the White House said in a briefing paper e-mailed to reporters. Broadcasters will be glad, if not entirely assuaged, to see the use of "voluntary" and "choice" by the White House, since it has been concerned that the effort would not be truly voluntary.

Deputy Director of the National Economic Council Jason Furman, briefing reporters on the speech, did not have a figure for how much the White House was expecting to have to compensate broadcasters or other commercial users for giving up spectrum, saying that would depend on how the auctions were structured and how much each broadcaster was willing to take for giving up their spectrum. "It depends on how the auction functions. what type of bids people make and what price they would be willing to [give up] the spectrum," he said. "But he said it reflects a "give or take" division of the proceeds between federal and commercial users."

The President in June put his stamp on the FCC's National Broadband Plan of freeing up 500 MHZ of spectrum for mobile broadband. He said that the government had already made better use of its spectrum and freed up 115 MHZ worth of spectrum, but said that "the much higher quality, more important spectrum is to come. What we'd like to set up is an incentive mechanism so that broadcasters who are using that for now, would have the choice if they decided to, to give up some of their spectrum.... the end result is that that spectrum would be in the hands of whoever had the greatest benefit of using it."

The president has referred to the wireless initiative in other speeches, starting with the State of the Union, but the initiative is the focus of the Michigan speech.

According to a copy of the details of the plan, he will also propose a one-time $5 billion cash infusion (from spectrum auctions not fees) into the FCC Universal Service Fund (USF) to subsidize 4G wireless broadband service; $3 billion for wireless R&D, and $10.7 billion to create and run an interoperable wireless emergency communications network using D block spectrum allocated--rather than auctioned--for that purpose. Actually, White House officials told reporters that it will be more like $15.7 billion for that emergency network, since it expects the $5 billion USF infusion to do double duty creating infrastructure that will also be used by the emergency network. So, in a way the FCC will get its wish for a public-private partnership, only not one created by auctioning the D block to a private user who would share it with public safety.

While the FCC proposed auctioning the spectrum, FCC Chairman Julius Genachowski said this week that the prime directive was to get the network up and running and that he would support the best way to do that. The bill will be footed by the $27.8 billion in spectrum auction proceeds the White House projects the government will have left over after it compensates broadcasters and other private entities and pays any relocation costs for government entities also being displaced in the effort to reclaim 500 MHz for wireless broadband.

There will even be $9.6 billion left over after all that investing for deficit reduction, the White House says.

The President's speech came the same day the House Communications & Internet Subcommittee was holding an oversight hearing on the Obama Administration's $7 billion-plus in broadband stimulus grants and loans handed out as part of the American Recovery and Reinvestment Act. The President's talking points include a shout-out to that investment for boosting broadband deployment and investment.

It also came the same week that the FCC launched USF reforms, including migrating subsidies to broadband. White House officials said the wireless initiative would complement that effort.

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