As big as the National Assn. of Broadcasters convention is, stations are bristling over a proposal they fear makes them look small in the digital future.

The issue is an FCC plan to reallocate as much as 120 MHz of spectrum currently held by broadcasters and reconfigure it so it can be used for wireless services, which are expected to see exponential growth over the next decade. The agency wants to do this through voluntary “incentive auctions,” whereby stations would decide on their own whether to give up spectrum and then share with the federal government the proceeds of the sale to telcos.

Starting with the release last year of the National Broadband Plan, FCC chairman Julius Genachowski has been warning of a shortage in spectrum that could hobble the ability of the U.S. to compete with other countries with advancing technologies.

The broadcast lobby says it supports auctions that are “truly voluntary” but fears that stations will be somehow pressured into giving up spectrum and that the plan is riddled with technical uncertainties.

There’s also the matter of perception, and what it says about the broadcast biz itself if stations start to sign off or switch their channel positions. Although many broadcasters are developing or introducing their own mobile services, the FCC anticipates that in some cases struggling stations will find the auctions a lucrative option.

As he received an award for service to the industry at Monday’s opening session, former NAB prexy Edward Fritts warned of “an entire telecommunications industry out to minimize or dismiss the invaluable contributions that local broadcasters provide every day, across America for the public good. Theirs is a campaign characterized by sharp elbows, enormous war chests and a public notion that if it computes, it must be good.”

At a later panel on the spectrum reallocation plan, William Lake, chief of the FCC’s media bureau, faced skeptical fellow panelists who argued that the agency has yet to produce enough details on how the auctions would work. Alan Frank, CEO of Post-Newsweek Stations, said those questions should be resolved before Congress gives the FCC the authority to conduct the auctions.

“I had the honor of serving in the Army, and I understand ‘voluntary,’? ” Frank quipped.

Lake said the auctions would aim “to find a willing seller and a willing buyer” — a market-based approach in which the FCC would serve as a middleman. He said the plan would require a realignment of spectrum to segregate the wireless portion from the broadcast portion.

The government would pay expenses of broadcasters required to change channels. It would not move any channel from VHF to UHF against its will, although the feds would for those who volunteer to do that “for a price they would set,” he said.

“We want to make that process as simple and painless as possible for those who just want to go on broadcasting that they are in the business to do,” he said. “We understand that many people think we just finished a bunch of disruptions including the (digital) transition, just leave us alone for a while, but we don’t think the world is leaving us alone.”

Nevertheless, communications lawyer John K. Hane called the notion that there is a spectrum crisis “beautiful marketing spin.” Moreover, he suggested that behind the drive for more spectrum is mobile companies who aren’t using what they have to maximum efficiency.

Lake said, “We are in a situation where we see a crunch, not a crisis … but we do see that happening.” He said the situation could be more dire five years from now, and broadcasters will find themselves with “less attractive” options as lawmakers try to figure how to free up space.

Genachowski is expected to make the case himself today, when he addresses an NAB audience. Last week, the spectrum auction plan received the support of 112 economists, who sent a letter to President Obama outlining the reasons why it was needed and why it would work.