McDowell Seeks Spectrum Leasing Ideas, Warns Against ITU Web Power Grab

FCC Commissioner Robert McDowell sought feedback on letting TV stations lease spectrum in the rulemaking the agency’s expected to start in what he expects to be a multi-year effort to auction the frequencies of broadcasters who agree to participate (CD March 15 p1). He’s happy Chairman Julius Genachowski is “talking more and more about the need to have flexible uses of spectrum” as the commission seeks to reallocate frequencies to wireless broadband. On Internet governance, McDowell said U.S. companies and the government must step up efforts to oppose a growing number of nations’ desire to have authority he said could include charging for international over-the-top video and other traffic (http://xrl.us/bmztw6). Much of McDowell’s Q-and-A with Media Institute President Patrick Maines was devoted to Internet and spectrum matters.

It’s clear the sale of broadcast frequencies will be “the most complicated auction in world history,” McDowell told a luncheon audience of lobbyists and executives in Washington Thursday. He hopes the commission avoids what he called the Rube Goldberg-like setup of the 700 MHz auction, where requirements on the C block led to more competition to bid on the A and B blocks that knocked out smaller companies. “Let’s try to avoid that -- let’s try to learn from mistakes,” McDowell said: “And let’s certainly try to not engineer certain spectrum blocks” like in 2008.

Last month’s spectrum law has “overshadowed” the idea of spectrum leasing, McDowell said in response to a question from audience member Lonna Thompson of the Association of Public TV Stations. “It is hanging out there as something I think could be attractive to a lot of broadcasters.” When the FCC seeks comment in a rulemaking, McDowell asked public broadcasters and others to file comments on spectrum leasing and any other ideas. Asked by us about what sort of information the FCC can release soon to get the incentive auction moving, such as a spectrum allotment optimization model from the Office of Engineering and Technology, McDowell sought an answer from Media Bureau Chief Bill Lake, who was in the audience.

"We are thinking very hard about what to do first, second and third” on the upcoming auction, Lake replied: Look for Genachowski to discuss what’s coming from the FCC when he speaks to the NAB’s convention in Las Vegas next month, and Lake will discuss the subject in April too at a Media Institute lunch. Until it’s clear how many broadcasters are “actually interested” in selling spectrum and “at what price,” it’s hard to make some predictions about the auction, McDowell said. “The band plan, I hope, would have a place for large carriers, for small carriers ... and new entrants” without excluding any bidder and “minimal ... encumbrances,” he said. “These things always do take longer than expected. And I don’t want to be a wet blanket on what is otherwise a positive piece of legislation.” McDowell counseled patience. Current and former FCC officials working with Genachowski have said an auction can occur in a year or two.

It appears about 90 of the ITU’s 193 member nations back all or some of efforts by developing countries and major powers like China, India and Russia to counterbalance what they see as U.S. dominance of the Internet by giving members of the union more power over Web traffic, McDowell said. Parliamentary procedures in the past have stopped such proposals from advancing, and “you're getting to a tipping point here, and obviously that causes great concern,” he said of negotiations on the 1988 World Administrative Telegraph and Telephone Conference slated for December in Dubai (CD March 1 p8). “The ITU wants more authority” for a body that predates the UN, to have “relevance as technology marches on,” McDowell said: “Somehow the developing world in particular must wrest control” of the Internet from the U.S., is the thinking of proponents of a bigger ITU role, “and countries such as Russia and China take advantage of it."

The move’s been opposed by all facets of the Web industry and the administration of President Barack Obama, but they need to do more, McDowell said. “So far, substantively, we're all on the same side” including companies that are rivals, and there’s a “very good team at the State Department” which takes the lead on such issues because it’s a treaty, he said. “I'm just a bit anxious that we seem to be slower moving on this one than we have been on similar fights in recent years.” He said the proposal envisions cybersecurity, privacy, standard setting and domain address administration being “taken away from the multi-stakeholder process and put under the ITU,” which can “create confusion in a marketplace that has been benefiting the world."

The U.S. needs to make clear it’s in developing nations’ interests to keep the status quo, McDowell said. Some state-owned phone companies see the proposal as a way to charge for content consumed over the top, which some nations may see as “enticing,” McDowell said. “What they're not understanding is that may snuff out the potential for over-the-top applications in their countries” by raising the very low barriers to entry, he continued. “If you start raising the economic costs of that kind of business, that will snuff it out.”