McAdams On: Locking Down TV Spectrum
5/12/2011 4:33:41 PM
April 22, 2011: LOS
ANGELES: The move to hand broadcast spectrum over to wireless
providers is a Treasury play, pure and simple. There are products pouring into this
country even now that are endangering citizens whose elected officials have borrowed
away all power to regulate the gray market. Chinese gangstas in dark glasses are
standing on the steps of the Capitol smoking menthols.
Free over-the-air TV service is this Administration’s last concern. It needs money,
and it needs it now.
Remember that Congress has twice “balanced” the budget on projected proceeds from
TV spectrum auctions. The first deadline for getting digital TV on the air was May
1, 2002, the year after Congress passed a balanced budget bill that calculated $26.3
billion from spectrum auction proceeds. When a majority of stations missed the deadline
for lack of funds, proper technology and tower capacity, Sen. John McCain (R-Ariz.),
who at one time seemed to hate broadcast with an intense passion, excoriated the
“I say again, when we gave away $70 billion to the broadcasters, I knew at the time
they would never meet this time schedule,” he said in a May 1, 2002 speech on the
Senate floor. I.e., lawmakers set a deadline they knew the industry could not meet,
and placed a ridiculously inflated value on spectrum. A couple of years later, phantom
proceeds were pegged at $50 billion to balance a budget. The spectrum would actually
bring $19.6 billion from cell phone service providers in 2008, when the economy
was still smokin’.
Because, lads and lasses, there just aren’t that many outfits that have several
billion dollars lying about.
There are, in the meantime, market forces. More and more people are ditching landlines
and relying exclusively on mobile phones. I’m one. I have two cell phones, one of
which can’t hold onto a call from across the room. Not because AT&T lacks the
spectrum, but because AT&T hasn’t yet uprooted every last tree L.A. and replaced
them with the fake Christmas tree towers. And more UHF TV spectrum won’t help them,
because they’re not about to sell handsets with antennas the size of a small pony.
And more and more people are buying TV antennas. St. Louis, Mo.’s Antennas Direct
is on target to more than double its revenues this year compared to last. People
are figuring out that over-the-air TV looks pretty good, and that “free” means it
doesn’t cost anything. Not costing anything does not make Wall Street happy. Incremental
revenue--the type attached to subscription models--does.
Investors and observers alike are wondering if broadcasters can really pull off
mobile DTV, and actually generate incremental revenue out of it. That’s something
the big wireless providers could never substantially nail down. If broadcasters
get to the market with mobile DTV before 4G phones are everywhere, they could dominate
But it’s hard to focus on constructing a house when the government comes along and
insists that it needs your lumber for some other guy’s barn. If broadcasters lose
another 120 MHz to wireless in addition to the 108 MHz they gave up in the digital
transition, they may as well throw in the towel.
So the U.S. Treasury needs money and broadcasters need their spectrum. Instead of
a wholesale reorganization of the airwaves, broadcasters should be allowed to bid
on their own spectrum licenses to lock ’em down. It doesn’t make sense for just
one industry to be allowed to bid on those frequencies. It seems like incumbents
ought to have the chance as well, otherwise, isn’t the government kind of stepping
all over the Fifth Amendment with filthy shoes?
Let broadcasters bid; let anyone bid, for that matter. But let broadcasters bid,
and like wireless companies, hold them completely harmless for indecency, children’s
programming requirements, record-keeping, news-source identifications, public-interest
obligations and all regulatory constraints in general.
And let AT&T build antenna hats.
See . . .
“U.S. Households Increasingly Cut the Phone Cord and Go Pure
“ Fake Chips from China Sold to U.S. Defense Contractors”
October 20, 2004: “Barton Buffaloes Broadcasters”
Since Barton became committee chairman last March, he's made it clear that he
favors the original 2006 deadline set forth in the Balanced Budget Act for the recovery
of analog broadcast spectrum. “The primary reason we're going to do this is dollars,”
August 14, 2002:
Revolution That Wasn’t”
Tauzin is miffed because a timely DTV transition
was necessary for holding scheduled spectrum auctions, which were imperative to
achieving a balanced budget bill that he signed. Never mind that he also offered
legislation that would allow those auctions to be canceled should the transition