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TV broadcasters await FCC’s National Broadband Plan

As the FCC prepares to present its National Broadband Plan recommendations to Congress on March 17, many TV broadcasters are keenly aware that its recommendations regarding spectrum reallocation could have a direct impact on their future business success.

At the very moment more than 30 broadcasters have deployed Mobile DTV channels within their 6MHz channel allotments in an effort to gain experience, learn how viewers respond and let consumer electronics companies test receiver performance, the chairman of the Federal Communications Commission has proposed asking TV broadcasters to voluntarily relinquish spectrum in exchange for a portion of a future spectrum auction to avert what he has characterized as a looming shortage of spectrum for wireless broadband service.

Plagued by years of a declining over-the-air audience, many TV broadcasters have looked to Mobile DTV to re-vitalize their businesses. Not only could Mobile DTV let them more profitably monetize their RF infrastructures, but more importantly it has the potential to attract significant new ad dollars and create greater revenue.

Two years ago, a study commissioned by the NAB and conducted by BIA Financial Network found Mobile DTV would generate $2 billion in new ad revenue –more than $1 billion of which would fill station coffers. In a market that saw spot TV ad spending decline an average of 15 percent last year, the significance of the potential revenue from Mobile DTV service becomes all the more important.

A lot can change in two years, however. The popularity of Apple’s iPhone, Research in Motion’s Blackberry and other Web-enable smart phones among consumers has mobile operators increasingly concerned about meeting future demand, which relies on having access to more spectrum. In October 2009, FCC chairman Julius Genachowski told a wireless industry gathering in San Diego his agency recognizes their concerns and has a goal of “unleashing spectrum for 4G mobile broadband.”

But doing so requires a bigger portion of a finite resource. “By some estimates it (mobile data usage) will grow from 6 petabytes per month in 2008 to nearly 400 petabytes per month in 2013,” he said.

The solution, in part, is reallocating spectrum. Saying “there are no easy pickings on the spectrum chart,” Genachowski added, “…we have no choice. We must identify spectrum that can best be reinvested in mobile broadband.”

Last week, Genachowski acknowledged he would like to get some of that spectrum from TV broadcasters. Speaking to the New America Foundation in Washington, D.C., the chairman laid out a proposal to let broadcasters voluntarily surrender spectrum in exchange for a share of the proceeds from an auction of their spectrum.

According to NAB executive VP Dennis Wharton, out of the nearly 1800 full power TV broadcasters in the country, a handful might be interested –but taking the deal may be risky.

“They have to bet that the FCC would be able to live up to its pledge that they are going to be compensated for their spectrum,” he said. “If you’ve ever watched the sausage-making process in Congress, that’s a risky bet to be making,” he said. “In an era of a trillion dollar budget deficit, where’s the guarantee that Congress simply takes the FCC recommendation and says, ‘Presto, we’ve turned it into law’? That rarely happens.”

It’s important to remember that the National Broadband Plan is just that – a plan. Nothing will come to pass without a Congressional go-ahead. While on the surface, the idea of reclaiming broadcast spectrum might seem attractive to cash-strapped lawmakers looking more for revenue, actually allowing broadcasters to do so is likely to raise serious questions about serving the broader public interest.

Both the Association for Maximum Service Television and NAB have frequently reminded those in favor of spectrum reallocation that local broadcasters are obligated by law to serve the public interest, especially in times of emergencies. Would sacrificing a portion of their spectrum allow broadcasters to maintain the same level of public service that they traditionally have provided during tornados, flash floods, hurricanes and other emergencies?

Less than five years ago, the FCC itself acknowledged the special role of broadcasters following the devastation of Hurricane Katrina. As flood waters receded and the commission took stock of the important public safety function broadcasters fulfilled in transmitting emergency massages, it modified its own rules to require DTV tuners to be built into even the smallest new DTV sets –similar in size to the portable analog sets many Katrina victims relied upon to stay informed. At that time, the commission specifically acknowledged the value of broadcasting public safety information, saying that portable, battery-powered TVs enable “the reception of news and public-safety information in times of emergency.”

At this point, the reaction of Congress to the FCC’s National Broadband Plan is anyone’s guess. But a powerful House committee leader may have given a clue.

Speaking at the NAB 2010 State Leadership Conference dinner in Washington, D.C., March 2, Rep. John Dingell (D-MI), Chair Emeritus of the House Committee on Energy and Commerce, expressed concern about plans under consideration at the commission to mandate reallocation of broadcast spectrum.

“Broadcasters already surrendered a third of their spectrum during the digital television transition, and I remain unconvinced by arguments that broadcasters are using their remaining spectrum inefficiently,” he said. “It is my hope that the Congress and commission can find a way to increase the spectrum available for the purposes of mobile broadband without threatening the availability of free, over-the-air broadcasting to the public.”