FCC Chairman Tom Wheeler Pitches Broadcasters on ‘Once-In-a-Lifetime’ Chance to Auction Spectrum

Tom Wheeler FCC

FCC chairman Tom Wheeler said Thursday that TV stations have a “once in a lifetime” opportunity to sell off their spectrum as part of plans to auction off airwaves for wireless use.

Wheeler’s hard-sell remarks at the Computer History Museum in Mountain View, Calif., come as broadcasters express reservations about participating in the incentive auction — at least until they have more information on how it will work. The incentive auction, to be held in mid-2015, is intended to free up spectrum that will then be auctioned off for wireless use. But the changes are expected to remake the channel lineup in many markets, as stations that participate would go out of business or share their spectrum with other license holders.

“I cannot remember a point in history when it has been simpler, safer or more profitable for an incumbent service provider to take advantage of new technology,” Wheeler said, according to his prepared remarks. “Typically, new technology plows under the old business models; in this case, however, the FCC is overseeing a once-in-a-lifetime opportunity for profitable repurposing of an important business activity.”

Wheeler said that stations that participate stand to “walk off with a big check from selling their old spectrum,” as they will share in the government proceeds of the auction.

Nevertheless, many detail remain to be worked out, including whether restrictions will be placed on the participation of major telcos AT&T and Verizon in bidding for the available spectrum. Wheeler said that more information “will be forthcoming in the next few months.”

“That this is a once-in-a-lifetime opportunity is not hyperbole,” he said. “The rebanding associated with this auction is hard enough; when it is done, the ability to do it again will be virtually nil. There will not be another round of broadcast incentive auctions.”

In December, Preston Padden, representing an organization of about 70 stations that have expressed interest in participating, warned that the FCC doesn’t have ƒ›Š‹‰ƒ’’‘ƒ…Š‹‰Š‡…‹‹…ƒŽƒ••ƒ›Š‹‰ƒ’’‘ƒ…Š‹‰Š‡…‹‹…ƒŽƒ••”anything approaching the critical mass” of station volunteers to give up their spectrum and make the auction successful.

Wheeler, making his first visit to Silicon Valley since he was confirmed as chairman, once again expressed his support for the FCC’s Net neutrality rules, passed in 2010 but facing the threat that they will be struck down by D.C. circuit court judges.

The issue surfaced earlier this week when AT&T announced a new mobile offering in which subscribing companies pay for the bandwidth when a subscriber accesses their app or website. Such a “sponsored” bandwidth offering has already raised the hackles of digital rights orgs, which contend that it may violate Net neutrality principles that otherwise apply to wired Internet connections.

Wheeler, however, noted that the FCC’s Net neutrality rules “did not discourage this type of two-sided market for mobile uses.” The FCC passed stricter rules for wired Internet providers than mobile providers “based in part on the premise” that there were more consumer choices in the wireless sphere, Wheeler said.

“This seems to me to be the right approach,” Wheeler said. “It may well be that the kind of offering AT&T has announced enables increased competition and increased efficiency, both things that benefit consumers. It is not the sort of thing that should be prohibited out of hand. But, again, history instructs us that not all new proposals have been benign. There has to be some ability on the part of government to oversee, to assess and, if warranted, to intervene.”

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