Even With Low Participation, White House Expects Billions From Voluntary Auctions
Broadcaster participation need not be high to raise nearly $28 billion from voluntary incentive auctions, said Phil Weiser, National Economic Council senior adviser to the director for technology and innovation. The White House estimated in its FY 2012 budget that the wireless effort could raise $27.8 billion. At a New America Foundation event Wednesday on the Hill, Weiser and other government officials acknowledged that the auctions and much else in Obama’s wireless plan rely on Congressional action. Meanwhile, speakers from industry and public interest groups urged government not to lose focus on spectrum sharing as it moves forward on auctions.
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"Not that many licensees” have to participate in incentive auctions “to give you a great return on clearing spectrum for auction,” Weiser said. “Most of the broadcasters are not going to participate, and most of them don’t need to participate for this to be a win,” he said. The Congressional Budget Office is working on rescoring the auctions, he said.
It’s up to Congress to decide how much of the auction proceeds go to broadcasters, but the administration doesn’t envision broadcasters getting an unreasonably high portion, Weiser said. If the Obama administration wanted to give broadcasters “every last drop of penny,” it wouldn’t have scored auctions so high, he said. “It doesn’t need to be a huge return for the broadcasters to be a win, because many of them … can actually stay on the air on a shared transmission platform.” The White House is “agnostic on exactly which stations participate and what type of arrangements enable them to,” Weiser said. The administration doesn’t want to “go in with a categorical view” of how to achieve the most efficient use of spectrum, and instead seeks to use market-based incentives, he said.
An aide to Sen. Olympia Snowe, R-Maine, asked if the effort to free up broadcaster frequencies could spoil efforts to take advantage of TV white spaces. In addition to auctions, Obama has proposed freeing spectrum for unlicensed use, Weiser said. “You're right in terms of the math: If you try to pack in the broadcast bands into a tighter set of bands, that will mean less white spaces. We also think it can mean, among the freed up spectrum, some of that can and should be unlicensed.” Incentive auctions aren’t “necessarily incompatible with the white spaces, [but] it just needs to be done mindfully,” said Harold Feld, legal director of Public Knowledge.
It’s “doable” but difficult to free up government spectrum without Congress streamlining the process, Weiser said. Congress must authorize incentive auctions and the Wireless Innovation Fund, he said. Achieving 98 percent access to wireless 4G will require Universal Service Fund reform. The FCC can do that on its own, but a one-time $5 billion investment would “catalyze” the process, he said. Obama supports reallocation of the 700 MHz D-block to public safety, but recognizes that the FCC will be forced to auction if Congress doesn’t intervene, Weiser said: “But we hope we don’t get to that point.” The White House spent a lot of time deliberating the best approach, and is “developing even more details on that,” he said. The administration is “working with a number of folks in Congress on this and there’s a lot of interest in getting this done."
NTIA seeks legislative changes to the Bush-era Commercial Spectrum Enhancement, said NTIA senior advisor Larry Atlas. Agencies incur a lot of expenses upfront, but auction revenue under CSEA doesn’t come until much further in the process, he said. Congress should update the Act to allow for planning funds to be made available, and “more liberal use of the funds,” he said. NTIA plans to complete a report by the end of September on how to free up a “beachfront” 95 MHz band of spectrum between 1755 and 1850 MHz for broadband use in 10 years, Atlas said. Last year, NTIA found 115 MHz that can be shared between commercial users and the government, and the agency “very recently” issued a formal recommendation to FCC Chairman Julius Genachowski, he said.
To address the looming “spectrum crunch,” the FCC wants to increase “the size of the spectrum pie for broadband both for licensed spectrum and for unlicensed spectrum,” FCC Wireless Bureau Chief Ruth Milkman said. The FCC has identified a number of bands to free up, but incentive auctions are a key part of the equation that require Congressional authorization, she said.
Industry and public interest officials emphasized that sharing must be part of spectrum policy. Microsoft and Google officials urged policy to encourage development of TV white spaces and smart radios to improve efficiency of spectrum sharing. TV white spaces provide a test bed on which more efficient radios can be developed to address the spectrum crunch, said Feld.
Spectrum auctions are “just one tool, and we need a more comprehensive, forward-looking spectrum policy” to meet demand long term, said Michael Calabrese, senior research fellow at New America Foundation. “The huge struggle that is to come with just the broadcasters, for example … shows that we're kind of down among the last few bands that can be cleared of its current use and then auctioned.” He called for long-term policy emphasizing more band sharing, “dynamic spectrum access technologies,” more spectrum reuse and more use of unlicensed spectrum.