FCC's Genachowski affirms voluntary spectrum sales

Unleashing spectrum to help mobile grow is on the top of the FCC’s to-do list for 2011, said FCC Chairman Julius Genachowski, who made it clear that “voluntary release of spectrum” will be one of the main strategies for boosting mobile broadband.

“I applaud the companies whose billions of dollars into 4G investment will bring about changes,” Genachowski said at the 2011 International CES.

Speaking to a packed hall, Genachowski addressed the audience and then sat down for a brief conversation with Consumer Electronic Association President Gary Shapiro. The topic almost entirely focused on the need for more spectrum for mobile broadband.

Genachowski stressed that a robust mobile broadband infrastructure was necessary for the United States to compete in nearly every field in the coming years.

“It’s not just an issue for the future of gadgets,” he said. “It’s a vital strategic issue for our global competitiveness and quality of life. If we don’t act, we’ll put our country’s economic competitiveness at risk. We’re in a race … and we have to move and move faster than our global competitors.”

Where at least part of the additional spectrum would come from was made clear from the start.

“Our spectrum policies are outdated, representing the needs of the 20th century, not the 21st,” he said. “Our first goal is to unleash spectrum.” The goal is to free up 500MHz of spectrum by 2020, he added. “By lifting restrictions on satellite bands, we’re close to freeing up 100MHz,” he said.

But, clearly, the majority of the spectrum would come from the voluntary auction of broadcast spectrum, which the NAB and its member call-letter stations have vehemently opposed.

“By next year’s CES, I hope the FCC will be further ahead with voluntary incentive options to harness free market forces to make sure spectrum is put to its most valuable uses,” Genachowski said. “The incentive option proposal would tap great potential.”

Developed in the National Broadband Plan, the spectrum would be supplied on a voluntary basis by mobile satellite operators and broadcasters.

“In the case of TV broadcasters, the station could share a channel with more or one stations, not broadcast or give up the 6MHz station,” added Genachowski, who noted that “the percentage of viewers who watch TV over the air has declined from 100 percent to under 10 percent … How can we justify shielding broadcast spectrum from the auction? Auctions of continuous spectrum would unlock value.”

In the brief sit-down with Shapiro, Genachowski, who was awarded the CEA Digital Patriot Award, reiterated some of his key points. Shapiro asked audience members who had experienced communication issues in the last few days at CES 2011, and nearly everyone raised their hand. Shapiro noted that he had angered broadcasters when he protested against compensation for taking back spectrum.

“Why do they have to be compensated?” Shapiro asked. “They’re being loaned the spectrum anyway.”

Genachowski’s politically adept answer was that “the National Broadband Plan was actionable, so that we could move quickly and move to the result we need, which is freeing up a substantial amount of spectrum … It makes a tremendous amount of sense and would be/should be bi-partisan,” he said. “It can happen quickly. We could auction this spectrum in the next year or two. That’s the pace we need to move given the increase of demand for spectrum. Every day we delay will have a cost.”

Shapiro asked, “What do we do with the people who are ‘squatting’ on spectrum? Do you want to put this on eBay?”

Genachowski’s response was that the FCC has created a framework for “this two-sided auction … We’re liberalizing the rules so it can be used for mobile and allowing broadcasters to share,” he said. “Then we’ll develop the auction process in a transparent way.”

Genachowski further noted that the “allotment of a checkerboard of 6MHz stations made sense in the 20th century and worked well … We commercialized our spectrum better and faster than other countries,” he said. “It’s one of our most important exports. Part of the struggle we have as a country is that some of the things that made us global leaders in the 20th century pose strategic challenges in the 21st. Some of that includes the spectrum policies. This is nothing negative against broadcasters. But (mobile broadband) is a disruptive technology we have to take advantage of for our economy.”