It would appear that television broadcasters are sitting on a gold mine. Their spectrum, valued at $62 billion, could be turned into $1 trillion if it were reallocated to wireless broadband usage, the Consumer Electronics Association (CEA) has found in a new study.
Recently submitted to the FCC, the CEA study was conducted by economist Coleman Bazelon. The goal was to establish a model for the value and use of the 300MHz of spectrum assigned to broadcast TV.
“The vast majority of programming from over-the-air broadcasters is viewed on subscription services such as cable and satellite,” Bazelon wrote in the study. “Increasingly, the over-the-air portion of broadcasting is becoming less economically relevant to broadcasters. Consequently, the large amounts of radio spectrum allocated to broadcast television could be reallocated, in whole or in part, to wireless broadband uses.”
Bazelon calculated the market value of that TV broadcast spectrum at about $62 billion, minus about $12 billion to pay off broadcasters for the spectrum they actually occupy, or about $9 billion if the 10 million over-the-air households are given lifetime subsidies for multichannel video service.
A second option, Bazelon wrote, is to allow some broadcasting to continue on reduced allocations, freeing up about $48 billion in spectrum. This option would cost $6 billion to compensate broadcasters.
Bazelon said the pay-off would be between $500 billion and $1.2 trillion in cost savings, increased usage for existing wireless services and new services that can't be offered without abundant spectrum. He also noted the social and economic activity of "ubiquitous, affordable broadband connectivity."
The CEA insisted that it did not endorse the study's results or analysis, and conceded those results and analysis would generate criticism. The association said, instead, that it was offering the study up as an example of the kind of analysis that the FCC should consider.
Acknowledging a spectrum “crisis,” the CEA urged the FCC not to wait for Congress but to work with the Obama administration “in the absence of a formal congressional mandate” to inventory and assess efficiency of spectrum use.
“The fact is we need more spectrum to continue to fulfill spiraling consumer demand,” said CEA president Gary Shapiro. “We do have swaths of underutilized or inefficiently used spectrum. We must work together to ensure this spectrum crisis does not threaten our national priorities and competitiveness.”