Broadcasters have been lobbying hard against what they see as a spectrum grab by the FCC in favor of wireless broadband, a proposal they say threatens their business model and even their very existence.
Phil Bellaria, the FCC's lead staffer on the commission's spectrum reclamation plan, tells B&C that broadcasters have been lobbying against a worst-case scenario that is no longer on the table, if it ever was. That would have meant broadcasters no longer having the bandwidth to broadcast in HD—or do mobile TV. However, Bellaria says that never got past the discussion stage after the FCC zoned in on the value of high-definition programming.
Bellaria, a former cable executive with Charter Communications who has been working on the plan as director of scenario planning for the broadband team, says the plan currently being prepared for vetting by the FCC commissioners would be voluntary and would not require any broadcaster to sell its spectrum to the government, or give up the ability to do HD or multicast or mobile, at least initially. The commission, however, might have to look at the spectrum issue again later, depending on demand. For broadcasters that do decide to clear their spectrum in exchange for compensation (broadcasters can't sell spectrum because they don't own it), Bellaria is looking to late next year as the time frame to get the process going.
The plan anticipates paying broadcasters to clear the spectrum, with Congress needing to approve any compensation, a recommendation to the Hill that would be part of the plan.
According to Bellaria, suggestions by broadcasters that the FCC or special interests were trying to take broadcasters' spectrum were off the mark. In fact, he says that during the process of talking to stakeholders, the commission narrowed the scenarios and has come up with one that he says gives broadcasters flexibility while still preserving free, over-the-air TV, which he says is a key FCC goal.
“The reality is that we are not trying to take spectrum from any individual broadcaster unless that broadcaster chooses to do it,” he says, “but there are ways to be more efficient with the overall allocation of spectrum for broadcasting just as there was with the digital transition. It is really about how we use spectrum more efficiently.”
The FCC was looking to get its side of the story out last week as the days dwindle down on the release of the plan, though the deadline has been extended by a month to March 17.
The National Association of Broadcasters (NAB) has met with FCC broadband team members to make the case for the value of their spectrum, including the importance of HD programming to their value in retrans deals that are increasingly important to broadcasters’ economic health. The NAB has also been running a TV spot suggesting the government could be pulling the plug on free TV. That ad was prompted not only by talks between the FCC and broadcasters, but pitches to the FCC by wireless and tech companies that it buy out all broadcasters and turn over all the spectrum to wireless broadband.
It also did not help broadcasters’ blood pressure when the FCC named a resident scholar, Stuart Benjamin, whose charter included pondering spectrum issues and whose writings included suggesting broadcasters be regulated out of existence to get their spectrum for other uses.
The NAB had no comment on Bellaria’s scenario, but a couple of veteran broadcasters, in Las Vegas two weeks ago to attend CES, signaled that they thought the FCC was getting the message about the value of mobile DTV as part of a broadband plan.
Samsung VP John Godfrey said he believes the FCC is “taking a comprehensive look” at the overall spectrum picture, and that the commission understands the different bandwidth considerations involved in sending video through “unicast,” or one-to-one, distribution systems such as wireless broadband, and “multicast,” or one-to-many, systems like mobile DTV.
Mark Aitken, director of advanced technology for Sinclair Broadcast Group, has been meeting with FCC engineers to explain the advantages of mobile DTV in delivering live video to the mobile masses. Aitken believes the commission has a “core understanding” of the inherent challenges of providing popular live content through cellular networks, but he won’t feel comfortable that those realities have been addressed in the broadband plan until it becomes public. “Tell us what the plan is, and we’ll work with you,” Aitken says.
Aitken cautions that there “isn’t one solution” to the spectrum crisis. For example, using a distributed transmission system with multiple low-power transmitters for DTV instead of the single-transmitter “big stick” model, as CEA and CTIA have suggested to the FCC as a way to free up spectrum, might work in some areas but wouldn’t in others, he says.
Aitken adds that one might free up 8 or 10 MHz of spectrum in rural areas like Nebraska, but clearing that amount of spectrum in a congested market like New York was unlikely. He also notes that the same markets where it would be unlikely to free up spectrum by overhauling the broadcast system tend to be markets where broadcasters are serving the greatest population density. “Six megahertz in New York City is pretty damn efficient,” he notes. “And those are the kinds of places where you’re least likely to free up spectrum.”
Bellaria also says that he continues to explore multiple options for the broadcasters who remain on their spectrum, including “DTS” or a “cellularized” broadcast architecture, to gain efficiencies within the broadcast TV band.
Bellaria talked with B&C about the FCC's plans for spectrum and the broadcast service he says the FCC wants to preserve.
What is the plan for getting spectrum back from broadcasters?
Where we have landed is a scenario that establishes a voluntary marketplace mechanism so that broadcast TV stations have a choice in how they want to use their spectrum. That choice could include retaining all of it and continue to broadcast in HD with broadcast and mobile, or relinquishing some of it because there are many stations not using all of the bandwidth available to them. Or, in some cases, stations making the decision to relinquish all of their spectrum.
You call it a voluntary proposal, but does that anticipate some threshold of spectrum return below which it becomes mandatory?
We think about this as trying to keep the pipeline of spectrum coming into the market to meet the needs of broadband usage over time, and so it is a process where we want to keep more spectrum in the pipeline. Some of that may come from broadcast TV. It may come from other bands where there are opportunities to reallocate spectrum. It is kind of an iterative process. Certainly, the first step that we would prefer would be voluntary.
I would expect that certain stations would take advantage of the opportunity of relinquishing their spectrum in exchange for compensation based on conversations we have had with many broadcasters, and just based on the current state of some broadcasters' business models and the dire straits that some of them are in. I don't expect there would be an issue where nobody would volunteer. Another thing is that, due to the nature of the broadcast spectrum and the interference rules associated with it, if one station decides to relinquish its spectrum in exchange for that, it actually frees up more than just one channel because of adjacent and co-channel interference protection.
The most congested TV markets are ones where need most spectrum for broadband. Those tend to be the most highly populated urban areas. Up and down the Eastern Seaboard [New York], or Chicago, and L.A. We don’t envision any scenario where there would be an impact on more rural broadcasters.
Any concern about a land rush of private-equity money getting out of the business that could hurt the broadcasting business?
There may be situations like that, but that depends on being able to set up a market-based mechanism where the price for the spectrum in any given area will be dependent on the characteristics of that area, as it is on any spectrum. The urban areas will be priced more highly, and there will be more incentive for people to quote-unquote cash out in those areas. Those also tend to be the areas where there are the most broadcasters and the most competition in the market already.
For broadcasters who want to go straight to cable after they give up their signal, any kind of must-carry for HD signal?
We are not currently contemplating any change to the must-carry regime.
What do you say to broadcasters who suggest you are basically offering them a life raft but not letting them take both of their kids?
If you want to save both your kids, do it. One of our fundamental principles in starting this process across all the band we are looking at is how to preserve or strengthen the viability of the incumbent users. We are trying to establish a mechanism that, for those broadcasters who don't see future viability in their current business models, gives them the opportunity to either turn in their license or experiment with a different model, or perhaps get together with another station where they can multicast. In that case, their cost structure is fundamentally lower. They are no longer supporting two separate transmission facilities, two separate power bills, two separate business models. That perhaps makes their business model much more sustainable.
The principle of this is not to take the knees out of the broadcast industry. The principle throughout has been: How do we set up a structure that strengthens the viability of an industry that it is going through some tough short-term and long-term challenges?
As currently constituted, your proposal is that no broadcaster has to give up any spectrum.
I would only qualify that to say that is the initial thought. As we continue to manage this pipeline of spectrum coming in, at some point we may have to go back and re-look at alternatives if we face some new shortages.
What are the timelines for getting this spectrum back?
The voluntary timeline would be as soon as possible, within the timeline of getting things done at the FCC and establishing auctions and running them. I think late 2011 or early 2012. I can't really establish a timeline beyond that because it depends not only on what happens with the voluntary mechanism with broadband, but with all the other things we are looking at, too.
But you think that there are enough broadcasters willing to give up spectrum that you can do this voluntarily, with a mandatory element only if that does not suffice?
Yes.
Have you made it clear to broadcasters that the worst-case scenario is off the table?
We have in all of our conversations with broadcasters talked about establishing a voluntary mechanism.
Summarize the plan for broadcasters.
One of the points I want to make is that we have a clear objective as part of the broadband plan to preserve free over-the-air television. Commercials raising doubt about that now are just patently wrong. So there is nothing in the national broadband plan that contemplates the end of free over-the-air TV. Instead, the perspective is how we can establish a mechanism that will not only preserve but strengthen the viability going forward.
So, is the FCC trying to pick winners and losers, with broadcasters obviously seeing wireless broadband on the winning side?
I think that concept is ironic. What we are trying to do is establish the mechanism where the market decides who continues to hold spectrum and who doesn't. Certainly, any broadcasters could participate as a buyer in that auction for spectrum, just like they could have bought spectrum in the 700 MHz auction but, other than Qualcomm and DISH, chose not to.
There are a lot of incomplete messages out there right now, so we just kind of wanted to set the record straight. We have had and continue to have productive discussions with broadcasters, and I don't think the public message reflects that.
So, what happens to broadcasters who give up spectrum? They can’t give up only part of it and continue on another part, can they?
According to the ATSC standard, a particular channel has to broadcast over the entire 6 MHz channel, meaning I could not choose to give back half my spectrum and broadcast over 3 MHz. In that scenario, a station would have to find another broadcast partner and multicast their signal. The FCC could explore making modifications so that each of those could be considered a primary video signal by a station. I think that would be one of the follow-up action items coming out of the plan that the commission would explore.
Which would then qualify them for must-carry on cable under current rules?
Yes.
Does this plan anticipate that most network affiliates won’t opt for giving up spectrum?
Yes. And even if a network affiliate wanted to participate and relinquish its spectrum, a network would turn around and sign a new affiliate agreement with a station in that market because it is in that network’s interest.
Talk about repacking stations to fit more in after some have cleared out.
It is possible we could more efficiently repack stations [after some have given up spectrum] and revise the table of allotments, but with the same interference protections.
I think that broadcasters have pitched this as the FCC or special interests trying to take spectrum from them. The reality is that we are not trying to take spectrum from any individual broadcaster unless that broadcaster chooses to do it, but there are ways to be more efficient with the overall allocation of spectrum for broadcasting just as there was with the digital transition. It is really about how we use spectrum more efficiently.
—Glen Dickson contributed to this story
E-mail comments tojeggerton@reedbusiness.com, and follow him on Twitter:@eggerton
