Wireless vs Broadcast: A Clash Over Who Controls the Airwaves Hits Washington

This is the latter-day version of the legendary Gunfight at the OK Corral. Old media and new media are going Mano a Mano. Separating the good guys from the bad guys depends on where you sit. The US is running out of spectrum. The Federal Communication Commission's solution is to take spectrum away from 'inefficient users,' eg, those who have been losing market share and arent using their full allotments. That would seem to favor the wireless industry and their allies over broadcast media. Except that the broadcasters claim the call on their demise is wrong and that this would unfairly penalize them for technological changes to which they are now adapting. Who wins? Momentum appears to favor wireless, but in this battle, with political interests in play, it's too early to bet on anything other than lots of money changing hands in an effort to influence the outcome. It's going to be a good year to be a telecommunications lawyer in Washington. Edward Wyatt reports in the New York Times:

"Dropped calls. Maps that take eons to load. Echoing voices on a mobile phone. And, as iPhone users know, the dreaded “Cannot Open Page.“

Selling TV's airwaves would "start a train wreck,” said Charles Glover, chief executive of Telos Digital Television Networks.

Those annoyances are likely to get worse, as airwaves that carry cellphone signals and wireless Internet connections grow ever more crowded.

The Federal Communications Commission has a solution: reclaim airwaves from “inefficient“ users — specifically, television broadcasters — and auction them off to the highest bidder, sharing some of the proceeds with television stations that volunteer to give up airwaves, known in the trade as spectrum.

Broadcasters, however, are furious with the plan, setting the stage for an old media vs. new media lobbying battle with cellphone companies and the government.

“We’re in full battle mode to protect broadcasters from being forced to give up spectrum,“ said Gordon H. Smith, president of the National Association of Broadcasters and a former United States senator, addressing his members at their meeting here last week. The CTIA, the lobbying group for the wireless industry, quickly fired back, accusing broadcasters of “desperate and inaccurate stall tactics,” said Steve Largent, the group’s president, who is a former Oklahoma congressman and member of the Pro Football Hall of Fame.

Broadcasters have long been under siege, their audiences slipping away to cable television, their advertisers defecting to the Internet. Although giving up spectrum would go unnoticed by most viewers, the fight to hold onto a chunk of the airwaves could be the industry’s biggest battle in years.

“We are not going to volunteer,“ said Leslie Moonves, the CBS chief executive. “Spectrum is our lifeblood.“ CBS owns and operates 14 stations in the large markets that the F.C.C. is considering for spectrum sell-offs.

Some lawmakers on Capitol Hill, in whose hallways the battle is likely to be fought over the next year, have already challenged the assertion that the auctions would be completely voluntary.

“Sounds kind of like a bank holdup to me,“ Representative John D. Dingell, a prominent Michigan Democrat, told Julius Genachowski, the F.C.C. chairman, at a hearing in February. “You hold a gun at the teller’s head and say, ‘We know that you are going to voluntarily give me this money. If you don’t, I’m going to shoot you.’ “

To the government, the overcrowded cellphone spectrum and wireless broadband networks have put the United States on the verge of a “spectrum crisis“ that, unaddressed, will threaten the nation’s technological leadership and economic growth. The 120 megahertz of spectrum being sought from the broadcasters would increase the amount available for cellphones and other wireless devices by about 22 percent, to 667 megahertz. On top of that, the Obama administration has said it wants to free an additional 380 megahertz for wireless Internet use.

“This growing demand is not going away,“ Mr. Genachowski told broadcasters last week. “The only thing that can address the growing overall demand for mobile is increasing the overall supply of spectrum and the efficiency of its use.“

From the days of analog signals, television bands leave broad spaces between stations to prevent interference — hence, their inefficiency. For cable TV or satellite viewers, airwave changes make no difference in reception. But for the 11 million households that still use an antenna to receive over-the-air signals (and thus do not subscribe to cable or satellite) there could be some interference between stations as the F.C.C. tries to press TV signals into a tighter spectrum bands.

Government officials deny this, but as the conversion to digital broadcasting showed, there can be unexpected consequences when you mess with the physics of broadcasting.

Mr. Genachowski has garnered support for the idea of reclaiming spectrum from some broadcasters. Also, a group of 112 economists who specialize in telecommunications, competition policy and auction design sent a letter to President Obama urging him to push Congress to approve incentive auctions. Three bills have been introduced in Congress supporting the idea.

But some members of Congress have opposed the plan, and the broadcasters’ group is a formidable foe. The group spent nearly $14 million on lobbying last year and made another $886,000 in campaign contributions toward the 2010 elections, according to the Center for Responsive Politics, in Washington.