A Free Market Myth

Spectrum vultures want regulatory hand over

There are more cell phones in the market than just about any other device. Consequently, service providers have just one way to grow revenues. They have to sell more features. One is TV. Cell-phone TV is just getting legs, so the last thing service providers need is a bunch of broadcasters offering the same thing for free. One way to stop the competition is to relieve broadcasters of spectrum. Two lobbies in Washington have figured out how by suggesting broadcasters be moved to a distributed transmission scheme.

The CTIA-The Wireless Association and the Consumer Electronics Association claim such a scheme would free up spectrum between channels—the white space. Never mind that white space has already been handed to Google and Microsoft. Let’s pretend that regulatory abuse never happened, and we will all have free broadband service on Google’s ad-supported Nexus.

The broadcast lobbies say DTS won’t provide the same coverage as high-power broadcasting, but that’s beside the point. Redesigning the broadcast television infrastructure is a waste of taxpayer money. The federal government put up billions of dollars to transition public TV stations and the public to digital television. The fed helped pay for the DTV transition because the fed ordered it. The fed ordered it to give wireless providers more spectrum, which they got last year and have yet to fully use.

The CTIA and the CEA say spectrum freed by repacking broadcast licenses for DTS would bring anywhere from $36.5 billion to $65.6 billion. From whom? AT&T and Verizon, possibly. Few other companies have $65 billion lying around, and the software guys know how to get spectrum for free. The CTIA/CEA filing suggests that such lucrative auction proceeds could help underwrite this new broadcast transmission system, though they don’t factor in the cost of the one that’s not yet entirely completed.

The many, many tons of gear Americans just paid for to accomplish the digital transition?

That would be called, “scrap.”

There is the economic argument that nationwide access to broadband has the potential to increase small business opportunities for people in even the most remote areas. That might well be true, but phone companies will wrench underwriting from the fed to serve remote and rural communities, just like they’ve done for years with voice service. Estimates for the universal broadband service fund haven’t been floated. The end cost to the consumer has not been floated.

Money is the singular reason that every U.S. household, school and business does not already have access to broadband. It’s not at all about spectrum. The wireless industry wants to hold everyone hostage to exorbitant monthly subscriber fees for using what is purported to be the public airwaves. And by marginalizing broadcasters, they eliminate potential competition for mobile video services.

Tooth fairy, Santa Claus, Easter Bunny, free market.