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Government offers broadcasters sweet deal

After months of rumors, hints and threats that the federal government was going to reclaim broadcast TV spectrum for its National Broadband Plan, the FCC laid its plans on the table last week. For most outsiders, at least, it appears to be a sweet deal.

The government’s goal is to free up a whopping 500MHz of spectrum over the next 10 years to accommodate the rapid growth of such devices as Apple’s iPhone, iPad, smartphones and mobile computers. It wants to take much of this spectrum — with an estimated value of as much as $50 billion — from television broadcasters.

Essentially, the FCC plans to allow broadcasters to give back their spectrum in exchange for a payoff from a spectrum auction. Remember, this is spectrum the broadcasters never paid for in the first place. It was loaned to them in exchange for some form of public service. Congress would have to approve the broadcasters being paid for spectrum they were loaned in the first place.

FCC chairman Julius Genachowski, in a speech before the New America Foundation in Washington, said as part of the national broadband plan due to Congress on March 17, the FCC will propose a voluntary mobile future auction that will allow TV broadcasters and other licensees to give up spectrum in exchange for a share of the proceeds.

The plan will “propose a mobile future auction — an auction permitting existing spectrum licensees, such as television broadcasters in spectrum-starved markets, to voluntarily relinquish spectrum in exchange for a share of auction proceeds, and allow spectrum sharing and other spectrum efficiency measures,” Genachowski said.

Emphasizing the plan is voluntary to broadcasters, the chairman said “while overwhelmingly — roughly 90 percent — of Americans receive their broadcast TV programming in most major markets through cable wires or satellite signals, there are still millions of Americans who receive TV through over-the-air antenna TV. Broadcasters would be able to continue to serve their communities with free over-the-air local news, information and entertainment; and they would be able to experiment with mobile TV.”

He called the proposal a “win-win” for broadcasters and the public. “For broadcasters, who win more flexibility to pursue business models to serve their local communities; and for the public, which wins more innovation in mobile broadband services, continued free, over-the-air television, and the benefits of the proceeds of new and substantial auction revenues,” Genachowski said.

The new plan would also consider “second carrier” plans, which would allow two or more carriers to share the same spectrum. It would also resolve longstanding debates about how to maximize the value of spectrum in bands such as the Mobile Satellite Service (MSS) or Wireless Communications Service (WCS) by giving licensees the option of new flexibility to put the spectrum toward mobile broadband use — or the option of voluntarily transferring the license to someone else that will.

What was not addressed is what happens if most broadcasters refuse to take the government’s “voluntary” deal. It appears that the proposed transaction is set. Either the broadcasters get a buyout for spectrum they received for free in the first place, or the government will move to take it “involuntarily.”