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The FCC Goes Spectrum Hunting

Reallocation of Broadcast Space Is Part of the Thinking at the Genachowski FCC

A chapter of the FCC’s National Broadband Plan is devoted to spectrum. One goal in that chapter is to make more spectrum available for broadband within 10 years. A recommendation within that goal is to make 500 megahertz available within the next 10 years, of which 300 megahertz between 225 MHz and 3.7 GHz should be freed for mobile use within five years.

And one way to accomplish that, the FCC wrote, is to reallocate spectrum from broadcast TV.

Any action by regulators toward a strategy of spectrum reallocation — and the thinking behind such action — are likely to of interest to other broadcasters, even if radio stations are not named in the plan. Here’s the relevant section of the FCC’s report.

Recommendation 5.8.5: The FCC should initiate a rule-making proceeding to reallocate 120 megahertz from the broadcast television (TV) bands …

The spectrum occupied by broadcast television stations has excellent propagation characteristics that make it well-suited to the provision of mobile broadband services, in both urban and rural areas. Enabling the reallocation of a portion of this spectrum to broadband use in a way that would not harm consumers overall has the potential to create new economic growth and investment opportunities with limited potential impact on broadcast business models. Consumers would retain access to free, over-the-air television. Reallocation would focus primarily on major markets where the broadcast TV bands are most congested and the need for additional spectrum for broadband use will be greatest. Moreover, the FCC should study and develop policies to ensure that its longstanding goals of competition, diversity and localism are achieved. Changes to the TV broadcast spectrum need to be carefully considered to weigh the impact on consumers, the public interest and the various services that share this spectrum, including low-power TV, wireless microphones and prospective TV white space devices. While the FCC has performed initial analyses to consider the viability of various options, further work will be required and all options must be examined through rulemaking.

The FCC report laid out actions and a timeline to meet its proposed goal of 300 megahertz for mobile use by 2015. Over-the-air television continues to serve important functions in our society. It delivers free access to news, entertainment and local programming, and provides consumers an alternative video service to cable or satellite television. It is the only such service to a segment of the population that either cannot afford paid television or broadband services or cannot receive those services at their homes currently. Over-the-air television also serves numerous public interests, including children’s educational programming, coverage of community news and events, reasonable access for federal political candidates, closed captioning and emergency broadcast information. Through broadcast television, the FCC has pursued longstanding policy goals in support of the Communications Act, such as localism and diversity of views. Finally, emerging broadcast applications, such as mobile DTV and data casting, may provide an opportunity to take advantage of the relative efficiencies of point-to-multipoint and point-to-point architectures in order to deliver various types of content in the most spectrum-efficient ways.

Because of the continued importance of over-the-air television, the recommendations in the plan seek to preserve it as a healthy, viable medium going forward, in a way that would not harm consumers overall, while establishing mechanisms to make available additional spectrum for flexible broadband uses.

The need for such mechanisms is illustrated by the relative market values of spectrum for alternative uses. For example, the market value for spectrum used for over-the-air broadcast TV and the market value for spectrum used for mobile broadband currently reveal a substantial gap. In 2008, the FCC held an auction of broadcast TV spectrum in the 700 MHz band recovered as part of the DTV Transition. That auction resulted in an average spectrum valuation for mobile broadband use of $1.28 per megahertz-pop. The TV bands have propagation characteristics similar to those of the 700 MHz band. However, the market value of these bands in their current use ranges from $0.11 to $0.15 per megahertz-pop. Other attempts to size the current economic value of spectrum for over-the-air television using alternative methods have resulted in comparable megahertz-pop valuations. While there are other possible valuation methods that could result in further variations, this analysis illustrates the order of magnitude of the gap.

This gap in economic value between spectrum used for wireless broadband and spectrum used for over-the-air broadcast television reflects in part the long-term market trends in both industries. Demand for mobile broadband services is growing rapidly with the introduction of new devices (e.g., smartphones, netbooks) and with 3G and 4G upgrades of mobile networks. The mobile broadband industry is expected to continue to drive innovation, job growth and investment through the next decade.

Over-the-air broadcast television, on the other hand, faces challenging long-term trends. The percentage of households viewing television solely through over-the-air broadcasts steadily declined over the last decade, from 24% in 1999 to 10% in 2010. Since 2005, broadcast TV station revenues have declined 26%, and overall industry employment has declined as well.

The gap in economic value also reflects two characteristics of broadcast TV licensing constraints. First, since broadcast TV requires channel interference protections, only a fraction of the total spectrum allocated to broadcast TV is currently being used directly by stations. Second, as a universally available, free over-the-air medium, television broadcasting has long been required to fulfill certain public interest and technical requirements. It is important to allow television broadcasting to continue to fulfill these obligations to local communities, while at the same time utilizing less spectrum, thus freeing up additional airwaves for mobile broadband. This could yield more service to local communities overall — broadcast television that consumers have always received along with more and better mobile broadband connectivity.

The FCC should initiate a rulemaking proceeding to reallocate 120 megahertz from the broadcast TV bands. The proceeding should pursue four sets of actions in parallel to achieve this objective. In addition, the FCC should take a fifth set of actions to increase efficiency of spectrum use in the broadcast TV bands. [The commission went on to detail those steps, which are summarized here.]

  • – Update rules on TV service areas and distance separations and revise the Table of Allotments to ensure the most efficient allotment of 6 megahertz channel assignments as a starting point.
  • – Establish a licensing framework to permit two or more stations to share a 6 megahertz channel.
  • – Determine rules for auctions of broadcast spectrum reclaimed through repacking and voluntary channel sharing
  • – Explore alternatives — including changes in broadcast technical architecture, an overlay license auction or more extensive channel sharing — in the event the preceding recommendations do not yield a significant amount of spectrum.
  • – Take additional measures to increase efficiency of spectrum use in the broadcast TV bands.

Possibilities listed to meet the final item include full-power TV spectrum fees; a deadline to achieve the DTV transition for LPTV stations; technical steps to address VHF reception issues; and creation by Congress of an endowment to fund public interest media from auction proceeds or spectrum fees.]

Read the National Broadband Plan “Spectrum” is Chapter 5.