Genachowski Talks Spectrum at NAB

Facing a potentially hostile audience of broadcasters, Federal Communications Commission Chairman Julius Genachowski broached the subject of spectrum reclamation at last month’s National Association of Broadcasters (NAB) show in Las Vegas.

Prior to the chairman’s speech, NAB President Gordon Smith riled broadcasters by referring to the recently released National Broadband Plan as the "great spectrum grab," but Genachowski attempted to convince the audience that spectrum reallocation is a good thing. (Editor’s note: The FCC’s National Broadband Plan calls for the recovery of 500 megahertz of spectrum during the next 10 years from multiple private and government users.)

"More broadcasters are seeking to extend their reach beyond the traditional platform," he said. "We need to go where the audience is going – online and mobile." But he warned that demand for spectrum quickly will outstrip the supply, citing some facts: An advanced Internet-connected smartphone generates 30 times the data volume of the cellphone it replaces. And data from multiple sources predict a 40-fold increase in mobile Internet demand – and that was before the introduction of the iPad.

"While it’s not the time to panic, it is the time to plan," he said.

But what about broadcast spectrum?

According to the chairman, “Some have suggested that all 300 megahertz now allocated to broadcasting should be reclaimed and auctioned. Others take the view that the status quo is fine; no change needed. The Broadband Plan recommends neither course. Instead, it lays out a well-balanced plan designed to be a win-win-win for broadcasters, mobile Internet providers and the American people.”

The commission’s plan gives broadcasters the chance to enter into a voluntary incentive auction aimed at giving broadcasters “the choice to contribute their licensed spectrum to the auction and participate in the upside.” There are four salient points to the auction:

• Auctions are voluntary. Participation is up to the licensee and no one else.

• For the plan to work, the FCC doesn’t need all, most or even very many licensees to participate.

• The commission anticipates mechanisms to reduce or even eliminate risk and to maximize upside for broadcasters that elect to participate in the auction. The plan could allow broadcasters to set a reserve auction price below which their licenses wouldn’t transfer. And the mechanism could lock in a payment for broadcasters while allowing for participation in upside above that level.

• Auction rules and mechanisms will be developed through an open and transparent process, with ongoing dialogue about the best design mechanisms for incentive auctions, focusing on what will actually work while meeting the country’s needs.

– Linda Hardesty