In this four-part Industry Spotlight series, Telecompetitor looks at the key ideas proposed in the Obama broadband wireless plan, the rationale behind them, and what would be required to move them forward. In Part 1 of this series we offered an overview of those plans. In Part 2 below, we look in more detail at the plan’s proposal to conduct a voluntary incentive auction with the goal of freeing up spectrum that could be used for mobile broadband wireless services.
In his January 2011 state of the union address, President Obama set a goal of bringing high-speed wireless to 98% of the U.S. population within five years—and in an address at Northern Michigan University the next month, he provided some additional details about his wireless plans. The proposal calls for the proceeds from that auction to be used to help fund a variety of wireless initiatives including wireless research and development, a nationwide public safety network and a Universal Service wireless mobility fund—initiatives we will explore in more detail in Part 3 and 4 of this series.
The voluntary incentive auction
Not a lot of details have been made public about President Obama’s wireless initiatives. A summary on the White House web page offers only a very high-level view, indicating among other things that the president recommends a voluntary incentive auction of broadcast spectrum. But based on recommendations made in the National Broadband Plan, it appears that the spectrum proposed for the voluntary incentive auction is in bands that traditionally have been used to transmit channels 31 to 51.
Currently much of this spectrum is unused because when U.S. television broadcasters converted to digital signal transmission in 2009, they were able to transmit four different channels in the amount of spectrum that previously would have been required for just a single channel. That move already enabled broadcasters to give up the spectrum previously used for channels 52-69, which they agreed to do several years ago. Most of that spectrum, which is in the 700 MHz range, has already been auctioned to wireless network operators such as AT&T and Verizon to support 4G wireless networks.
Broadcast spectrum was licensed decades ago at a time that pre-dated spectrum auctions. Because broadcasters did not pay for the spectrum initially, some people have argued that the broadcasters should not share in the proceeds—and at a minimum, legislative action would be required to enable voluntary incentive auctions to occur. Several bills have been introduced in Congress that would use auction proceeds to fund a nationwide broadband wireless public safety network, and at least one of those bills, The Public Safety Spectrum and Wireless Innovation Act proposed by Senator Jay Rockefeller (D-W.V.), would give the FCC the authority to conduct a voluntary spectrum auction.
NAB weighs in
Some pundits say legislation of some sort has a good chance of passing because all of the bills proposed have both Democrats and Republicans behind them. But even if legislation passes, there is good reason to question how willing broadcasters will be to relinquish additional spectrum again so soon, even for a price.
“The broadcasters I talk to on a regular basis have no desire to get out of the business,” comments Dennis Wharton, executive vice president of communications for the National Association of Broadcasters. “They spent $15 billion to make the transition from analog to digital with the promise that they would be able to recoup the investment if they made the transition.”
One of the ways broadcasters hope to recoup that investment, Wharton says, is through digital mobile television, which some broadcasters will be rolling out within a few months. Digital mobile TV will enable end users to view live local programming on handheld mobile devices and in the back seats of cars, offering a more spectrum-efficient delivery mechanism than what is used by cellular operators that offer video services, argues Wharton.
But new services such as these need spectrum—and Wharton says it needs to be near the upper end of the broadcasters’ current holdings, which include VHF channels 2-13 and UHF channels 14-51. That could mean that broadcasters will be particularly reluctant to give up channels 31 to 51, which are at the upper range of broadcast spectrum holdings.
“We promised all these innovative new services to millions of viewers less than two years ago when we asked them to swap out their old TV set,” says Wharton, adding that 43 million U.S. citizens rely exclusively on over-the-air television.
Read Part 3 of this four-part series, where we look at plans for Universal Service and wireless research and development.