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Perfect storm

Dark, ominous clouds of potentially cataclysmic, business-changing proportions are brewing in Washington. Formed by converging forces of progressive-philosophy-leaning government officials, increased consumer pressure for bandwidth, the worst economic times since the Depression, and a Congress and president panicked for new revenue, these winds of change could put every TV broadcaster out of business.

In October, the Consumer Electronics Association submitted to the FCC a 22-page report, “The Need for Additional Spectrum for Wireless Broadband: The Economic Benefits and Costs of Reallocations.” The report, authored by Coleman Bazelon, outlines a plan to implement wireless broadband (and kill over-the-air TV) through three simple steps:

  • Buy out broadcasters and turn off OTA TV broadcasting;
  • Provide free subscription cable/satellite programming to current OTA homes; and
  • Sell the freed-up spectrum to the highest bidders.

On the surface, this might seem like a laughable proposal. After all, broadcasters just relinquished more than 100MHz of spectrum and spent billions of dollars to complete the conversion. However, even those efforts may not be sufficient to stop the pro-broadband agenda.

Broadband benefits

Few would argue against the benefits of wider wireless broadband implementation, but this report makes some extravagant claims. Among them:

  • Broadband deployment will create an additional 1.2 million jobs, and every 1 percent increase in broadband penetration will create another 300,000 jobs.
  • A 10-percentage-point increase in broadband penetration will increase gross domestic product by 1.2 percent.
  • “… Lives will be saved and tens of thousands of hospitalizations can be delayed or avoided.”
  • Estimates of potential reductions in greenhouse gases due to additional wireless broadband vary from 1 billion tons over 10 years to almost 8 billion tons by 2020.
  • Consumer surplus (total value of broadband benefits) range from $500 billion to $1.2 trillion.

The proposal requires the selling of all TV channels, which it claims would generate $62 billion. The offsetting conversion costs (free cable/satellite) range from $9 billion to $12 billion. “Such a significant mismatch between the value and costs indicates radio spectrum is currently inefficiently allocated,” says the report's writer. “The benefits of the proposed reallocations could be more than $1 trillion and also represents the cost of inaction.”

Plan B

If you don't want OTA broadcast to go entirely dark, the CEA's report offers Plan B. This scheme would clear only three-quarters of the TV band (216MHz). Among the results:

  • VHF Channels 2-14 would be kept, and UHF Channels 15-35 and 37-51 would be relocated to wireless.
  • Broadcasters would be required to share channels, with no OTA HD.
  • The total value of TV station properties would decrease to $6.2 billion.

More frightening, a similar proposal was apparently raised in an October meeting between FCC broadband czar Blair Levin and key TV broadcasters. One report said he suggested broadcasters might want to consider giving up their channels in exchange for a share of the billions that a spectrum auction would generate.

Should these antibroadcast forces ever get their way, broadcasters may be left with two options: relinquish their license, turn off the transmitter, give up any potential new OTA revenue streams and become a cable-feeding program stream; or simply take the buyout money, turn off the lights, and go home.

What would you do? Visit the Brad on Broadcast blog at, and share your thoughts.

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