McAdams On: $pectrum, Guard Bands and Ch. 51

REALLY? Congress is genuinely concerned about how much money it will get from the sale of TV spectrum. The veritable buffet of ironies here begins with Congress caring now, when it couldn’t give a hoot in the past. The Congressional habit of spending phantom spectrum revenues goes back to the last auction of TV channels, when lawmakers put $26 billion on the spectrum credit card in 2006 to balance the budget. They then delayed the concomitant auction until 2008, when the budget deficit reached $438 billion, and the auctions raised just $19.4 billion that went toward who knows what.

This year, we have the so-called “Middle Class Tax Relief and Job Creation Act of 2012,” which created jobs by extending unemployment benefits for two years to the tune of $30 billion. That expense would normally go on the credit card, but the plastic’s maxed, so once again, Congress spent spectrum auction proceeds before they materialize.

The widely published already spent unemployment offset figure is $15 billion, but the aforementioned bill explicitly states that “$20,400,000,000 shall be deposited in the general fund of the Treasury.” That’s a separate item from the $7 billion dedicated to a first-responder broadband network, $135 million for states and municipalities to tap in, $115 million for e-911, $200 million for research, and up to $1.75 billion to move TV stations in together, bringing the total expected TV spectrum auction revenues to $29.6 billion. That would be $1.9 billion more than the Congressional Budget Office estimate, without factoring in the cost of the incentive to get broadcasters to give up spectrum.

These figures presume a direct path between income and expenditures, which is not the case here, as all of this is spread over several years projected to include pay-as-you-go items, otherwise known as, “it won’t be our problem any longer,” or, “this is how Congress digs a hole.” Even if future pay-as-you-go revenues materialize, the Spectrum Act portion of the Tax Relief hoo-haw expects an undetermined amount of TV spectrum to bring in $10.2 billion more than 108 MHz sold for in 2008. (Recall that 10 MHz of that total sat untouched because no one was interested in building a business on spectrum that fire trucks could commandeer at any moment.)

And so irony No. 2 writ large here is that Congress is betting enough TV stations voluntarily either move in together or get out of business such that it will raise upwards of $30 billion. This means that Congress fully expects at least 20 TV channels in every market to be cleared—just like the National Broadband Plan anticipates.

That’s one thing in North Platte, Neb., the second smallest of the 210 designated market areas in the United States. According to the Telcordia white-spaces database, North Platte has 23 open TV channels. Plenty. So, let’s check a large market, where spectrum is most in demand. New York, at No. 1, has zero open channels. Los Angeles, DMA No. 2, also has zero available TV channels. Let’s try DMA No. 3, Chicago… Chs. 2 and 9 are open there—both VHF assignments, where broadcasters cannot be forced to move according to the Spectrum Act.

How was it again that Congress expects to raise $30 billion from the sale of TV spectrum? (Drums fingers, looks at ceiling….) The august body is beginning to wonder itself. Republican members of the House telecom subcommittee recently took the Federal Communications Commission to task for proposing 6 MHz guard bands between TV and wireless transmissions in the post-incentive auction repack.

The FCC proposes to designate the guard bands for unlicensed use, meaning Google entrepreneurs would make money in the space, rather that Congress. Members of Congress, therefore—particularly GOP members—have decided spectrum licensees don’t need no stinkin’ guard bands. And they ought to know, because they’re all radio frequency engineers. No, they are not.

Oregon Republican Greg Walden, chairman of the House telecom subcommittee, produced a pie chart during the hearing illustrating how those guard bands and another 11 MHz potentially dedicated to unlicensed use could bring in conservatively as much as $7 billion at auction, and possibly $14 billion, one commissioner testified. All things being roughly equal, the high estimate would value the TV channels targeted for auctioning at $59 billion.

Consequently, Walden and his camp are questioning the need for 6 MHz guard bands between TV and wireless broadband transmissions. Maybe they can be smaller, goes this new line of logic in complete dismissal of the pesky Ch. 51 freeze. Que demandez-vous? Ch. 51, the high end of the TV spectrum after Chs. 52-69 were auctioned off in 2008. The FCC froze new and pending applications for new TV station facilities on Ch. 51 last year after—you guessed it—wireless carriers requested it.

“Licensees of 700 MHz A block spectrum have encountered significant technical challenges to deploying wireless broadband service in this spectrum, owing primarily to the fact that there is no guard band between Ch. 51 and the A block and that Ch. 51 broadcast operations pose a substantial interference threat to mobile systems deployed on the A Block.”

In perhaps the coup de grâce of ironies, the FCC granted the Ch. 51 freeze and went so far as to encourage incumbents to relocate, despite the fact that federal law was supposed to protect the broadcasters on Ch. 51 from interference promulgated by their wireless neighbors!

It may or may not be the case that guard bands of less than 6 MHz may be adequate to prevent interference between wireless data and TV transmissions. But the FCC certainly didn’t offer to give the A Block winners a couple of MHz elsewhere to create a guard band next to Ch. 51. They instead endeavored to clear 6 MHz to create one.

Props, then, to FCC Chairman Julius Genachowski for consistency, intended or otherwise, when he testified at the hearing that “until we can change the laws of physics, we’re going to have to have guard bands.”

I suspect that defying the laws of nature will require more than a pie chart.
~ Deborah D. McAdams