Ranking Member of the House Committee on Energy and Commerce Henry Waxman (D-CA) is expected to join the chorus on Capitol Hill recommending to the so-called Supercommittee that auctions of spectrum in the television band be part of any deficit reduction package of legislation.
According to Hillicon Valley, Waxman has a draft of a letter that he intends to send to the members of the Joint Select Committee on Deficit Reduction – and as in most of the other stated opinions we are aware of, it signals approval of plans to authorize the FCC to hold incentive auctions of television spectrum. Waxman would join with others, too, in the call to make spectrum currently held by the government available for auction.
As the plan has been presented, it would share proceeds of such an auction with broadcasters who agree to share a frequency band or who agree to exit the business entirely, and would compensate other broadcasters for expenses incurred moving to a new channel to make contiguous room for new entrants into the swathe of spectrum, most likely companies planning to offer wireless broadband service.
Whatever is left over would be used for deficit reduction. According to Waxman, that might be about $15B. However, a Congressional Budget Office estimate placed the net at only $6B.
Broadcasters have said they would sign off on auctions as long as they are truly voluntary, they do not cause loss of service area or otherwise degrade their signal, that they are compensated for all expenses incurred because of auctions, and that there be only one auction. Low power television interests are also seeking fair treatment in the process.
NAB also produced a study that questions the feasibility of auctions in certain markets, including the nation’s largest where capacity is already strained, and also in markets near the nation’s borders where international factors come into play.
Further complicating the matter are studies showing that telecom companies seeking spectrum in the television area are currently sitting on unused spectrum.
RBR-TVBR observation: The NAB has stated over and over that broadcasters are not opposed to incentive auctions as long as they are completely voluntary. It has also pointed out seemingly intractable technical obstacles to finding enough spectrum in the most crowded markets. The devil will as usual be in the details. What is very clear is that the NAB is going to have its hands full with this issue, and that broadcasters are going to need every friend they can find on Capitol Hill before this is over.
Just as a reminder to any policy wonks who may be reading this – there is highly technical battle being waged here that pits the broadcast and the wireless industries against one another. If broadcasters are seriously damaged, the losers could well be the poorest citizens who cannot afford broadband and rely on over-the-air television. Add to that every citizen who is cut off from information during a crisis because wireless networks and their inefficient one-to-one distribution model cannot hold up to sudden periods of high demand.
Even if Waxman is right and we get $15B in deficit reduction out of an auction, the amount is next to nothing in an enterprise where the stakes are measured in the trillions of dollars. We’ll keep saying this until we hear a politician say it – this is too complicated, technical and important a matter to tie to deficit reduction given the fact that the amount on the table will have no noticeable deficit-reduction benefit.