Broadband plan includes spectrum auction

FCC asks for authority to create dominant Internet

The Federal Communications Commission on Monday unveiled key details of an ambitious blueprint to make faster and perhaps cheaper Internet access ubiquitous across the country, but the proposal already has run into turbulence from broadcasters and scrutiny among studios that it addresses fears of rampant piracy.

The full details of the National Broadband Plan — which would essentially set forth the Internet as the dominant means of communication over the next decade — are scheduled to be released on Tuesday, but broadcasters expressed their concern with provisions asking them to give up spectrum space to facilitate the greatly enhanced Internet capacity.

The plan calls for the FCC to make 500 megahertz newly available for broadband use in the next 10 years, of which 300 mg would be made available for mobile use. One of the plan’s goals is for the U.S. to become the leader in “mobile innovation,” with the “fastest and most extensive wireless networks of any nation.”

The FCC asks Congress to give it the authority to have “incentive auctions” to sell spectrum space to private broadband service providers. The plan calls the auction proposal “a practical, market-based way to assign spectrum, shifting a contentious process to a cooperative one.” One idea would be for the government to share revenues raised in auctions of spectrum space with broadcasters who give up their claim to a portion of the spectrum space allocated them by the FCC.

But the plan also calls for Congress to let the FCC impose “spectrum fees” on license holders as a way to give them a financial reason for giving up their airwaves.

That proposal in particular drew consternation from the National Assn. of Broadcasters. Its executive vice president, Dennis Wharton, issued a statement in which he said that broadcasters were initially told that any spectrum reallocation would be on a voluntary basis.

“However, we are concerned by reports today that suggest many aspects of the plan may in fact not be as voluntary as originally promised,” Wharton said. “Moreover, as the nation’s only communications service that is free, local and ubiquitous, we would oppose any attempt to impose onerous new spectrum fees on broadcasters.”

But broadcasters also are faced with a much different landscape in a world of split-second Internet speeds. It could accelerate the migration of viewers from traditional, over-the-air broadcasting to Internet vid sources. The loss of the spectrum could impede broadcasters’ efforts to delivery high-quality HDTV, multicast channels and burgeoning mobile services.

“Worst case scenario, this would be akin to the government telling an automaker: You can still make cars, but they have to be Model Ts,” Wharton said, also noting that broadcasters qualify as “the original wireless technology.”

While Hollywood studios and unions have expressed general support to the idea of Internet growth in hearings and workshops before the FCC, they have raised concerns that the buildout of broadband will only make it that much easier to download pirated movies and TV shows, at a time when they already are grappling with how to best fight copyright infringement. It’s expected that the plan will address such concerns, and industry lobbyists will surely raise the issues with lawmakers. A spokesman for the MPAA had no comment, saying that they were waiting until details were released.

Patrick Corcoran, a spokesman for the National Assn. of Theater Owners, said that he had not seen the full details of the plan but said they hope to see “reasonable and rational protections” for copyrighted content. He added that the higher speeds and penetration could provide benefits for lower-cost digital film distribution to theaters, as well as “lower barriers to entry” for independent distributors.

The FCC plan calls for expanding the broadband infrastructure so 90% of Americans have high-speed Internet access, compared to 65% today. One barrier to entry has been price for low-income Americans, and the plan also calls for a National Digital Literacy Corps to teach online skills. The goal is for some 100 million more households to be connected over the next decade to “affordable 100-megabits-per-second service,” which is 10 or even 20 times the speed many homes have today.

Some tech groups and cable operators offered early praise for the plan. In a blog post, Joe Waz, Comcast’s senior vice president of external affairs and public policy counsel, wrote in a that “we like a lot about what we have heard about the plan so far.”

As an example, he wrote, “Finding more spectrum to promote mobile broadband? It is long overdue and needs to be done.”

Like telecom companies, Comcast and other cable operators are concerned that the plan will add new levels of regulation, along with another FCC “net neutrality” proposal to ensure that Internet providers do not give preferential treatment to certain content over others.

FCC chairman Julius Genachowski, in releasing the broadband plan’s executive summary on Monday, said that “action is necessary to meet the challenges of global competitiveness.” The FCC warned that a “looming shortage of wireless spectrum could impede U.S. innovation and leadership in popular wireless mobile broadband services.” Its plan sees applications in everything from health care to energy conservation to national defense. With comparisons made to the country’s electrification in the early 20th century, the plan also calls for bringing broadband to rural communities, and to give every American community access to at least 1 gigabit per second service in schools, hospitals and government buildings. It also calls for increased transparency among broadband providers as a way to increase competitiveness.

The plan was mandated by the $787 billion stimulus bill last year, which set $7.2 billion for broadband initiatives. The report states that the costs of the plan are likely to be offset by the money raised from the spectrum auction.

David S. Cohen contributed to this report.

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