Lawmaker Says Spectrum Bill Could Help Broadcasters

Legislation to authorize voluntary incentive auctions could include provisions to spur investment by broadcasters, Chairman Greg Walden, R-Ore., said Tuesday at a House Communications Subcommittee spectrum hearing. Most members appeared to support incentive auctions. But Walden and others said they are still considering how best to use the 700 MHz D-block to build a national public safety network.

Walden told reporters he expects “a couple” more spectrum hearings before the subcommittee reviews any legislation. “I don’t want to rush it,” he said. Nothing is set, but Walden said a comprehensive spectrum bill is most likely because there are many interrelated moving pieces. Walden said he has “talked briefly” about the D-block with Homeland Security Committee Chairman Peter King, R-N.Y., who has a bill to reallocate the band to public safety. Walden wouldn’t elaborate.

Incentive auction legislation could help increase capital for broadcasters “to explore next generation services” like mobile DTV and “broadband-like broadcast services,” said Walden, a former broadcaster. It could also “strip regulatory obstacles” confronting TV stations, he told the hearing. Title III of the Communications Act is outdated, he said. Spectrum in the AWS band is “close to ripe for auction,” Walden said. “If paired with other spectrum, such as some currently held by government users, that spectrum could be auctioned in the near future.” Congress could update the Commercial Spectrum Enhancement Act to smooth clearing of government spectrum, Walden said.

Subcommittee members said they are examining the D-block issue, even though last year the subcommittee on a bipartisan basis supported auctioning the band. Both approaches “have promise,” said Rep. Henry Waxman, D-Calif., the parent Commerce Committee’s ranking member. President Barack Obama and the chairmen of the Senate Commerce Committee and the House and Senate Homeland Security committees have endorsed giving the D-block to public safety. “We need the support of the members of this subcommittee to get [reallocation] legislation passed,” said Charles Dowd, a deputy chief of the New York City Police Department.

Public safety understands the fiscal realities but needs the D-block to protect American lives, Dowd said. Former Sen. Slade Gorton, R-Wash., said a major new government program to fund a public safety network is “not in the cards” in a Congress focused on cost savings. Giving the D-block away would give up a chance to reduce the deficit, he said. No one in public safety supports a D-block auction, Dowd said. Gorton countered it’s not surprising that public safety would support getting spectrum free. Gorton was a member of the 9/11 commission but testified Tuesday for a coalition including Sprint Nextel and T-Mobile that favors an auction.

Walden asked whether public safety could use spectrum that it now devotes to voice communications. Converting it to digital “would free up a lot of spectrum, probably half of what you're using today,” Walden said. Dowd replied that if public safety had the D-block, it could put all its communications in one place and later give the FCC back some spectrum now used for narrowband. Rep. Lee Terry, R-Neb., asked whether public safety has spectrum it isn’t using. Julie Knapp, chief of the FCC Office of Engineering and Technology, said public safety spectrum is generally being used, but 700 MHz narrowband is not being used everywhere in the country.

U.S. Cellular can see how reallocation might work but would prefer for commercial operators to build and run the shared network and then create partnerships with regional public safety groups to ensure interoperability and first-responder prioritization, said CEO Mary Dillon. A D-block auction without burdensome conditions would offer the most bang for the buck, said Coleman Bazelon, a Brattle Group economist.

Broadcasters aren’t against “truly” voluntary incentive auctions but believe that broadcast-band repacking “could adversely affect more than 600 local television stations and millions of viewers across the country,” said WGAL Chief Engineer Robert Good. UHF is better than VHF for digital broadcasting, but the FCC’s repacking plan could claim 20 of 37 UHF channels, he said. “The consequences of that proposal for the affected stations and your constituents would be staggering.” If channels were packed too close, there likely would be increased TV interference and reduced use of unlicensed devices in white spaces, Good said. Forced channel sharing would aggravate the problem, he said. Moving a station from one UHF channel to another would require each to replace equipment at the cost of $1 million to $1.5 million, Good said. Moving a station from UHF to a high-VHF channel could cost more than $4 million, he said. And some consumers may have antennas that receive only UHF, he said.

Knapp said broadcasters shouldn’t fear repacking. “While realignment of some broadcast stations will be necessary to ensure efficient use of the spectrum freed up in an incentive auction, our proposal seeks to limit the number of stations that would need to switch frequencies as part of the realignment process,” he said. “For those that do, we would work to limit any loss of service to over-the-air television viewers and would fully reimburse them for any costs associated with relocating. No stations would be required to move from the UHF band to the VHF band unless they freely chose to do so in exchange for a share of the auction proceeds."

Repacking should not be voluntary, said Intel Associate General Counsel Peter Pitsch. Making it voluntary would “give many broadcasters ‘hold-out’ power, leaving little or no money for the U.S. Treasury,” he said. To be successful, voluntary incentive auctions should allow many competitors to bid and win licenses, Dillon said. “By design,” incentive auctions won’t shift spectrum “from a higher valued use to a lower value use,” Bazelon said. He estimated that 120 MHz probably would sell at auction for more than $35 billion.

Walden asked whether AT&T’s planned purchase of T-Mobile could reduce the number of bidders at a spectrum auction. Bazelon said he doesn’t believe that the deal would change “any of those fundamental demands for spectrum or supply of spectrum.” The purchase doesn’t mean Congress can hold off on spectrum legislation, said CEA in written testimony. “The proposed acquisition does not create any additional spectrum, it merely transfers corporate ownership of existing spectrum already dedicated to wireless broadband,” said Senior Vice President Michael Petricone.