Spectrum reallocation entices unlikely players

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The possibility of broadcasters selling their spectrum to wireless carriers recently received the surprising consideration of a broadcast executive and a liberal federal regulator.

Blair Levin, the FCC official heading the national broadband plan, has been talking to broadcasters about possible scenarios on how they might return their spectrum to the government, which would then auction it off, according to a Nov. 2 story in Broadcasting & Cable. The publication cited one unidentified broadcast executive who said the industry is facing powerful forces — namely the Obama administration, Silicon Valley and the wireless industry — that could eventually force a settlement.

The executive said Levin floated the idea of forcing the four major networks to broadcast one standard-definition channel with HD only available to pay-TV subscribers. Broadcasters would then get a cut of the auction proceeds.

The idea is starting to gain some traction among other broadcasters as well, which are addressing the issue publicly. In an Oct. 29 earnings conference call, LIN TV Corp. CEO Vincent Sadusky broke from the broadcast industry's usual talking points by acknowledging that some smaller broadcasters lack the facilities of bigger stations and might consider selling their licenses and airwaves.

"There are those of us in the industry that don't have [the resources of the big networks], that have a poor plant, that have a nonaffiliated television station, a station that doesn't produce any localism and … that could be a windfall for those folks if they're ultimately paid on a per-part basis," he said. "But I think there's a huge distinction between how the full-service groups that are utilizing all their bandwidth and have plans to continue to use technology to maximize the consumption of bandwidth for new services versus others that have obtained it and not really maximized it."

Furthermore, Sadusky warned that moving the spectrum from free over-the-air use to a paid service would fundamentally alter the use of airwaves, which will lead to a lengthy review of those issues.

"It all comes down in numbers and whatnot, and numbers have been thrown around that have been pretty mind-boggling, but it's kind of all yet to be determined," he said. "It's an interesting topic though, and it's one that's clearly going to be an agenda item for the FCC."

Sadusky's assessment that the FCC's process will be long is accurate given the complex legal and regulatory questions attached to repurposing spectrum for a vastly different use. By most accounts, the process of moving local broadcasters from analog to digital and auctioning that beachfront spectrum to wireless carriers took about a decade. So this process could take the same amount of time, perhaps even longer.

Furthermore, public interest advocates, which certainly have the ear of the Obama administration and FCC Chairman Julius Genachowski, love the public interest obligations local channels have to abide by, such as programming for children and educational purposes. While those groups are advocates of public interest obligations on broadcasters, they also are vocal about the need for more spectrum for broadband.

In other words, something has got to give.

For his part, FCC Commissioner Michael Copps signaled in a Nov. 3 speech that he might side with the wireless carriers given the inability of local broadcasters to supply robust news to the public.

"If we can't fix what's broken, if we can't rejuvenate broadcast journalism, reopen shuttered newsrooms, put the brakes on mind-numbing monoprogramming, stop the dumbing down of our civic dialogue and take advantage of the great potential of local broadcasting, then maybe those who want that spectrum back have the better of the argument," he said. "Time will tell."