FCC Officials Says Cooperation Key to Clearing Broadcaster Spectrum

“There aren’t any more ’spectrum Monets’ in the closet” for the FCC to give out, said Phil Bellaria, director of scenario planning on the FCC broadband team. “Most spectrum is being highly used and used for purposes that provide value to society.” That means tradeoffs are necessary, so it’s better to set up a cooperative process, he said. The broadband plan proposes a band-clearing auction that voluntarily lets incumbents relinquish spectrum for a share of the proceeds, he said. “It’s a win for the incumbents because it gives them another option … to figure out what to do with the spectrum they already occupy. It’s a win for consumers, because” it means quicker reallocation, “and it’s a win for the federal government, because it will release spectrum into the market and therefore generate some auction proceeds more quickly” than a traditional auction would.

“Trying to get people to do things they don’t want to do can take a really long time,” agreed Evan Kwerel, FCC senior economic advisor in the Office of Strategic Planning. “Using a voluntary approach which provides incentives for broadcasters to clear is much more likely to accomplish the goal of clearing quickly, than an approach where they're forced to do something that they don’t want to do.” The approach also means lower costs for clearing spectrum, because the broadcasters that will want to sell probably value their spectrum the least, Kwerel said. For example, it may not take as much money to clear shopping channels as it would to clear the main networks, he said. And since the method uses the market to set compensation for spectrum, the FCC can avoid assigning “arbitrary” prices, he said.

A competitive exchange, also called a double auction, would reduce the risk of clearing too much spectrum, because it would only clear spectrum when the value to new licensees exceeds the value to incumbent broadcasters, Kwerel said. The disadvantage of holding two separate auctions, one to clear spectrum and one to sell, is that it would force government to determine how much it should clear, he said. An exchange allows the market to decide, he said.

“It doesn’t have to be an all-or-nothing clearing” for broadcasters, where “you either give up your full 6 MHz or you stay,” said Kwerel. Through multicasting, multiple broadcasters could share the same 6 MHz channel, he said. “You can imagine an option where instead of full 6 MHz channels, you could be offering a share of your capacity. And then, ideally, the auction could match broadcasters who wish to multicast.”

The FCC is also taking a “fresh look” at policies and incentives to improve use of secondary markets, and to spur unlicensed and opportunistic uses of spectrum, said Bellaria. The plan will recommend creating a dedicated band for unlicensed use, he said. Unlicensed use of spectrum has proven to be complementary to licensed, and it’s been a “driver for innovation,” he said. The FCC is also looking at ways to make more efficient use of existing spectrum, he said. “There are always gaps in time, frequency or geography where spectrum is not being used,” he said.

The U.S. needs a “multi-faceted solution” that includes better spectrum management, and a spectrum inventory is the first fundamental step, said Matthew Hussey, legislative assistant for Snowe. “One-hundred percent of the spectrum isn’t being used 100 percent of the time in 100 percent of the nation,” he said. “If it’s not being used 100 percent of the time, it doesn’t sound like it’s a crisis. It sounds like we just need more effective management.” While recognizing the “insatiable demand” of consumers for wireless broadband, policymakers should also be “cognizant” that government usage is also increasing, said Hussey. “That’s one thing that I think might be getting a little muddied in the waters.” The Defense Department, for example, “is one of the most important, because as our threats and adversaries are changing,” so is DoD’s need for spectrum, he said.

Snowe’s office was pleased to see the spectrum inventory bill (S-649) by Sen. John Kerry, D-Mass., reported out of the committee, said Hussey. “We are hoping that the full Senate will consider it here in the very near future.” A similar bill in the House (HR-3125), sponsored by Commerce Committee Chairman Henry Waxman, D-Calif., was approved by the Communications Subcommittee in late January (CD Jan 22 p2). Senate Commerce Committee Chairman Jay Rockefeller’s, D- W.Va., staff has been in contact with Waxman and Communications Subcommittee Chairman Rick Boucher, D-Va., on their bill, Hussey said. Boucher’s amendment to the bill in the subcommittee markup “brought it a little bit closer … to our draft, which is good,” he said. Both bills have the same goal, “so we wouldn’t expect any conflicts, and have historically worked really well on these issues.”

While it’s important to analyze how much spectrum is needed, the U.S. has historically underestimated, said T-Mobile Vice President Kathleen Ham. Government should get started releasing as much spectrum as possible to encourage wireless industry investment, she said. “It’s very, very expensive to build these networks, and so there has to be some certainty. There has to be some path,” she said. “I'd rather have more [spectrum] than not enough.”