latest salvo in the intensifying battle over spectrum is a research paper that
asserts broadband is a more cost-effective use than broadcasting. The
conclusion of the Coleman Bazelon of The Brattle Group is that the radio
frequencies used for broadcast would be the easiest to reallocate for
broadband, and bring about $62 billion at auction. The research was
commissioned by the Consumer Electronics Association.
“Spectrum below about 3 GHz is most valuable for mobile communications...,”
Bazelon wrote. “About 22 percent of all frequencies below 3 GHz are allocated
as licensed and available for mobile broadband uses. That implies that there
are likely significant opportunities for additional allocations of licensed
radio spectrum for broadband uses.”
Broadcast television is in sub-3 GHz territory, along with mobile satellite, radio
location, aviation navigation, ham operation, maritime communications and a
host of government uses. Bazelon argues that broadcasting would be the easiest
spectrum to reallocate. E.g., taking Channel 37, which is now dedicated to
astronomy, “would require valuing the benefits from the science that relies on
those frequencies--a truly courageous exercise.”
“If it were possible to continue to do science using those frequencies by placing
radio astronomy equipment on the dark side of the moon, then one measure of the
opportunity cost of using those frequencies on earth would be the cost of such
facilities. That cost would likely be prohibitively expensive for the benefit
of freeing 6 MHz of spectrum. Other bands would be less expensive to free up,”
Reallocating frequencies used by the government would require knowing precisely
what they’re used for. “Unfortunately, there is no good accounting of those
frequencies,” he said, though legislation calling for a thorough spectrum
inventory is circulating on Capitol Hill.
Ideally, the cost of freeing up all the spectrum should be analyzed for
any reallocations, but Bazelon said that
was “beyond the scope” of his research, which focused instead on broadcast.
“These frequencies may or may not be the least expensive to free up,” he said.
Using a formula that assigns a per-household value to each TV channel, then
subtracts cable and satellite carriage, Bazelon comes up with a market value of
$12 billion for over-the-air broadcasting. That amount would presumably be
reimbursed to broadcasters from the projected $62 billion in auction proceeds
under a reallocation scheme. Another option would be to port all over-the-air
households over to a pay service at an estimated cost of around $9 billion.
Bazelon does not mention household willingness to continue paying a monthly fee
He does, however, mention the socioeconomic benefits of broadband on production
and employment--300,000 jobs for every 1 percent increase in broadband
penetration. He also cites an environmental impact study that links broadband
penetration with the reduction of greenhouse gases. He also said that demand
for mobile data is expected to grow 125 percent annually “over the next few
years, and at rates 100 times greater than voice traffic will grow over the
In conclusion, Bazelon says the $62 billion broadband valuation versus $12
billion for broadcast is evidence that “radio spectrum is currently
inefficiently allocated.” The said another $50 million would be gained from
commerce applications, and consumers would benefit to the tune of between $500
billion and $1.2 trillion from “cost savings and increased usage... for
existing services and new services that can only be developed and offered in a
more spectrum abundant marketplace.”
Bazelon’s paper comes hot on the heels of an FCC trail balloon gauging interest
in the broadcast industry with regard to trading in licenses for cash.
Commission advisor Blair Levin reportedly floated the idea to several
broadcasters in recent weeks, to a somewhat cool response. Broadcasters just
finished the multi-billion dollar task of transitioning to digital
transmissions, and are now in full-fledged mobile DTV deployment mode.
The commission is under a presidential mandate to create nationwide broadband,
for which spectrum must be allocated. Sen. John Kerry (D-Mass.), who is
sponsoring a spectrum inventory bill, told The
Hill newspaper that broadcasters should spectrum reallocation seriously.
“They should be worried, and everyone else should be worried,” he said.
FCC chief Julius Genachowski intends to present a nationwide broadband plan by
(Image by T.W. Collins)
The FCC radio frequency allocation
The commission’s “Online Table of
Bazelon’s paper, “The Need
for Additional Spectrum for Wireless Broadband: The Economic Benefits and Costs
More from TVB:
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Sept. 17, 2009: “Legislators Press for
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July 13, 2009: “Boucher Proffers House
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February 6, 2009: “Boeing Receives
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