Michael Grotticelli /
07.23.2010
Originally featured on BroadcastEngineering.com
Proposed legislation would tax broadcasters who keep their spectrum

A spectrum bill authorizing the sharing of spectrum auction proceeds with broadcasters (and others) includes a new annual fee that would tax station owners that choose not to participate. Sens. John Kerry, D-MA, and Olympia Snowe, R-ME, introduced the legislation in Washington, D.C., last week.

Sen. Jay Rockefeller, D-WV, also plans to introduce a similar bill that gives the commission the authority to pay broadcasters to give up some or all of their spectrum for a national wireless broadband plan. However, it was not clear whether or not Rockefeller planned to include a spectrum tax in his bill.

Specifically, the Kerry-Snowe legislation would authorize the U.S. Commerce Department to impose annual fees on the existing spectrum users based “on the fair market commercial value of that spectrum” as determined by the FCC. The tax could end the broadcaster’s free use of spectrum in exchange for providing a public service to viewers — an arrangement that dates back to the beginning of the medium.

The looming reality of a reduced presence for over-the-air stations is not lost on industry trade groups like the National Association of Broadcasters. Faced with potentially exorbitant taxes (a near certainty in larger DMAs), some station owners might consider their shareholders’ best interest and sell their spectrum entirely.

The Kerry-Snowe legislation, called the “Spectrum Measurement and Policy Reform Act,” requires a study on “spectrum occupancy and use.” It also authorizes revenue sharing for licensees who voluntarily relinquish spectrum — as proposed for broadcasters in the FCC’s National Broadband Plan.

“Our nation’s airwaves are finite resources, and we need to use them as efficiently as possible,” said Kerry. “This analysis will help us empower innovation, encourage competition and lower prices for emerging technologies nationwide.”

The bill requires the FCC and the National Telecommunications and Information Administration (NTIA) to determine not just who’s using what band of spectrum, but how much and for how long. It would also give the Secretary of Commerce the authority to “refuse assigning frequencies to mobile radio or other radio service,” and to collect fees from licensees.

The Rockefeller bill would provide the FCC with the authority to hold incentive auctions.

“This proposal will not require the return of spectrum from existing commercial users, but will instead provide them with a voluntary opportunity to realize a portion of auction revenues if they wish to facilitate putting spectrum to new and productive uses,” Rockefeller said

Also, in a letter last week to Genachowski, Kerry and Snowe called for the FCC to free up unused “white spaces” spectrum because it could help narrow the digital divide.

Arguing the move would “empower manufacturers and consumers to construct multiple paths to the Internet,” the senators said the proposal would help bring the Internet to those who still lack access. “The ‘white spaces’ spectrum provides an opportunity to reach these Americans,” Snowe said.

It asks for the examination of spectrum between “at least 100MHz and 10GHz,” over a diverse geographic region for “an appropriate period of time.” It also asks that future occupancy and usage patterns by existing licensees and government users be predicted, and to correlate those predictions with past usage.



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