FCC chief talks up auction plan

Genachowski warns NAB about looming broadband crunch

FCC chairman Julius Genachowski tried to assuage broadcasters’ concerns about aspects of the National Broadband Plan in his keynote address to the National Assn. of Broadcasters confab on Tuesday.

Genachowski repeatedly assured the packed ballroom at the Las Vegas Hilton that the FCC’s effort to reclaim some of the broadcast spectrum currently allocated to local TV stations is entirely voluntary for broadcasters.

The broadband plan the FCC presented to Congress last month proposes that the FCC auction off chunks of spectrum to wireless broadband providers (with stations sharing in the proceeds) in an effort to spread the availability of high-speed Internet service across the country. The NAB has raised red flags about language in the 377-page plan that suggests the FCC would take back some spectrum now allotted to broadcasters if there was not enough voluntary participation by stations.

NAB prexy Gordon Smith decried the spectrum reallocation proposal as “not voluntary as originally advertised” in his remarks to the confab on Monday.

But Genachowski called that one of several “myths” circulating about the broadband plan in his 40-minute speech.

“These auctions are voluntary. Period. Participation is up to the licensee and no one else,” Genachowski said.

The FCC chief sounded the alarm about a looming crisis in broadband service for the country as more consumers use data-heavy devices such as iPhones and wireless laptops. Genachowski cited projections that demand for mobile broadband services will increase 40-fold over the next five years, but the amount of available spectrum to service that demand will only grow three-fold.

“On our current trajectory, the demand for spectrum for mobile Internet access will outstrip the supply. By a lot,” he said.

Genachowski cited the U.S.’s lagging status in broadband usage and availability as an issue of competitiveness, and he repeatedly stressed the economic benefits of broadband growth.

“If we wait for the crisis to hit, it will be too late to act without significant cost to our economy and global competitiveness,” he said.

Genachowski laid out a few options for broadcasters to give back some of the 6 megahertz of spectrum that is now licensed to every full-power local TV station. Stations could simply give up a portion of their spectrum, or seek a spectrum- sharing arrangement with another station in the market. Genachowski also raised the suggestion that Congress would set a floor price for spectrum that would allow stations to pull their inventory back if that price wasn’t reached in an auction.

“The plan could allow broadcasters to set a reserve auction price below which their licenses wouldn’t transfer. The mechanism could lock in a payment for broadcasters, while allowing for participation in upside above that level,” Genachowski said.

That suggestion raised eyebrows among station operators in the room, who anticipated that the process of determining such a floor price would be “a nightmare,” in the words of one indie station owner.

Alan Frank, prexy of Post-Newsweek Stations, said flatly that his company “would not be interested in auctioning spectrum.” Frank said that Post-Newsweek stations, which include NBC and ABC affils in such markets as Detroit, Houston, Miami and San Antonio, are focused on developing mobile TV and other services that will use every bit of spectrum allotted to each station.

Frank emphasized that in general broadcasters are supportive of the goals of the National Broadband Plan, as stations stand to benefit as they roll out next-generation services like mobile broadcasting.

“We’re all in favor of it — the issue is how do we achieve it,” Frank said.

Genachowski also touched briefly on another hot-button issue for broadcasters — the push by cable, satellite and telco operators to revamp the retransmission consent legislation. Public brawls between broadcasters and subscription TV providers have increased in recent months as TV stations push hard for cash in exchange for the right to carry their signals. In response to a petition filed last month by cablers and sat-TV operators, the FCC is seeking comments on the issue of a potential overhaul of the nearly 20-year-old retransmission consent laws.

“I’m concerned about sudden program interruptions, and about the potential for rising cable rates,” Genachowski said. “Some ask: is ‘free TV’ really free when cable rates go up because of retransmission fees?…As we move forward, I’ll be focused on making sure we have a framework that is fair to consumers, as well as each of the businesses involved.”

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