WASHINGTON-Formulating future spectrum policy not only is a hot topic for those who must handle the regulatory and legislative aspects of parceling out channels, those that need more frequencies and those that want to hold onto what they’ve got also are making their opinions known.
At a recent House Subcommittee on Telecommunications, Trade and Consumer Protection hearing, congressmen expressed concern over the way the Federal Communications Commission and the National Telecommunications and Information Administration were handling spectrum allocation. Several also had problems with clauses in the administration’s newly submitted budget that depends heavily on future auction revenues to balance out. In particular, Congress wants to make sure auctions don’t turn from being a method of distributing licenses to those that can build them out best to a method of garnering more money to bail out budget plans.
Communications industry representatives were split as to whether auctions should continue or take a hiatus. James Keelor, president of Cosmos Broadcasting Corp. in South Carolina, stands square against the early return and auction of six megahertz of broadcast spectrum following the transition from analog to digital television. Citing figures that portray broadcasters as users of only 1.34 percent of spectrum below 30,000 MHz, he claimed the timely return of spectrum-in the year 2006 and beyond-would ratchet broadcast use of channels down by some 34 percent, if done correctly. He cautioned against flooding the market with more spectrum, including his own.
“With 80 megahertz of additional spectrum already nearing the auction block for voice and data wireless services, serious thought should be given to putting any more on the market in the near term,” Keelor said. “An over-allocation for narrowband uses could lead to warehousing, deflated auction revenues and inefficient spectrum use. By flooding the market with small channels, it could also inhibit the development of technologies that require aggregated or wider channels.”
One of Keelor’s main concerns centered on the possibility of increased interference to TV transmission from services packed into a small sliver of spectrum. To mitigate that situation, he suggested that spectrum allocated to digital TV contain channels 2 through 69, “so as to reduce the disruption of existing television service while securing for the public a new service that at least replicates the scope of the old.”
The Clinton administration already has made plans to allocate channels 60-69 to wireless use, some for auction and some for public safety. Keelor, however, saw this as a disaster in the making.
“Mobile transmit and receive operations, if inserted into the television band, would cause destructive interference to television service,” he said. “By the same token, if the FCC adopted rules to protect television service, the mobile assignees could only use slivers of any given channel, thus decreasing the efficiency of the spectrum use.” He added that mobile users themselves have “complained that the assignment of certain digital television channels would interfere with their operations.”
As an alternative, Keelor suggested that the FCC mandate refarming at 800 MHz, as it had with spectrum below 450 MHz, so that new spectrum could be given to those-particularly the public-safety community-that need it most.
Agreeing with Keelor was heavy hitter Robert Wright, president and chief operating officer of NBC Inc., who opened the hearing with a demonstration of new and improved high definition TV. “While NBC strongly supports balancing the budget and appreciates fully how tempting projected auction revenues are to help achieve that objective, the adverse macroeconomic consequences of killing digital television dwarf the benefits to be gained by a one-time auction,” he said. “We cannot forfeit the wave of new jobs and capital investment that flows from the transition to digital for a quick revenue hit.”
Wright reiterated that the analog-to-digital transition would not be complete by 2002-the year broadcast auctions could be held, according to Fiscal Year 1998 budget proposal-and he railed against another proposal-that broadcasters be assessed an additional fee if auctions do not bring in the required amount of cash. Channels 60 through 69 also should be off limits, he said, “because it would imperil the operations of many existing broadcasters and create potential havoc in some larger markets by creating digital channel shortages.”
Countering such claims was Michael Amarosa, deputy police commissioner of technological development for the New York City Police Department and one of the linchpins of the Public Safety Wireless Advisory Committee, which formulated a recently submitted spectrum-policy paper of its own that has been submitted to the FCC and to the NTIA.
“There is a clear and immediate need for the spectrum that could be made available through the use of TV channels 60-69,” he said. “The spectrum for these channels is immediately contiguous to the 800 MHz band, which is used extensively by many public-safety agencies. This would mean that agencies that were `closed out’ when 800 MHz channels were allocated could now receive this spectrum, and agencies presently using 800 MHz could expand their systems to include more agencies and more users.”
Amarosa pointed to the president’s desire to hand over some 40 percent of these channels (24 megahertz) for exclusive public-safety use coupled with support from Attorney General Janet Reno for the plan. He also said Sen. John McCain, chairman of the Commerce Committee, has introduced legislation to reserve those channels for public-safety use.
Amarosa also made the House panel aware that his constituency was against any radical changes in frequency coordination. “It has been suggested by some that the spectrum-management responsibility be opened to competition,” he said. “Management of scarce radio spectrum allocated for public safety is best handled by direct representation from the public-safety community on a not-for-profit basis … In an era where the call for competition seems paramount, we must consider the consequences of leaving spectrum management to those whose sole existence is to establish and maintain financial gain. Under those conditions, our frequency-assignment process will go to the coordinator with the lowest bid and the lowest standards who does not have a vested interest in this mission-critical radio spectrum.”
Amarosa added that any plan that included giving coordination responsibility to individual states would create chaos.
“We will be opening a Pandora’s box of interstate coordination and concurrence difficulties if we take the licensing mechanism away from the FCC and rely on 50 different databases that may or may not communicate with one another,” he said. “With radio channels becoming increasingly complex as new technologies emerge, we must consider that only federal regulation combined with state and local coordination can serve as the guide for properly controlled spectrum management.”
Agreeing with how auctions have been used in the past but questioning their future was Benjamin Scott, president and chief executive officer of PrimeCo Personal Communications L.P., which paid more the $1 billion for 11 major trading areas. He placed the onus of future failure in the laps of both Congress and the FCC.
“The success of these auctions lies not in the $20 billion that has been bid for the licenses but in the rapid and efficient assignment of the licenses to firms placing the highest value on their use,” he said. “Notwithstanding this important observation, many policymakers now mistake an important communications policy for a fiscal tool.”
Scott cited the FCC’s upcoming 2.3 GHz auction, scheduled for April 15, as an example of fiscal concerns driving policy. Although no specific service offering has been mandated for this
spectrum as yet, the commission is bound by law to sell it so that procee
ds can be counted as revenues in this fiscal year.
“Treating auctions as a fiscal device encourages the FCC to allocate as much of the available spectrum as possible to commercial uses, which can be auctioned, rather than to public uses, which cannot,” Scott continued. “The FCC’s proposed flexible use of the [2.3 GHz band] points to a still larger problem for communications policy … Recently, several white papers from various sources have proposed that auctions be used not only for license assignment but also as a mechanism for making the frequency allocations themselves. This approach to spectrum management is wrong because it would have the government abdicate its responsibility to consider the public interest as it allocates spectrum for specific uses.
“For the FCC to abandon this responsibility to competitive bidding under the seductive guise of yielding to market forces will return one of this country’s fastest growing industries to the anarchy that reigned in the first decades of this century. I doubt that many firms would bid aggressively for spectrum for which no use has been determined,” Scott concluded.
