FCC plans auction of some TV spectrum for next June

Computerworld - The Federal Communications Commission has rescheduled to June 19 an auction in which portions of the UHF TV spectrum now held by TV stations will be sold to cellular carriers. Critics view the move as a billion-dollar giveaway to the broadcasting industry, which obtained the licenses for free.

The auction is for airwaves in the 700-MHz band, which is occupied by about 100 TV stations operating on channels 60 through 69. While the money from the auction will go to the federal government, the auction winners will also have to pay the broadcasters to vacate that space, which they can occupy until 2006. The auction had been previously scheduled and postponed in May and again on Sept. 12, the day after the terrorist attacks on the U.S.

Craig Mathias, an analyst at Farpoint Group in Ashland, Mass., said winners of the 700-MHz auction could end up paying as much as $10 million to each TV broadcaster, or a total of $1 billion nationwide above and beyond their multibillion-dollar payments to the FCC.

Mathias said the entire auction process is driven by politics and lobbying, adding that he wouldn't be surprised to see more delays. "This [FCC action] will certainly enrich the legal community," Mathias said.

Broadcasters obtained the UHF channels for free in the 1990s to help smooth the nation's transition to digital television. The plan was for those UHF channels to continue broadcasting conventional analog signals while broadcasters converted their original channels to digital television by 2006.

This, the FCC reasoned, would allow viewers to receive an over-the-air TV analog signal until the conversion process was completed and only digital televisions were sold. A delay in the development and rollout of digital television as well as a demand for more spectrum from cellular carriers led to a decision last month by the FCC to allow broadcasters additional, but unspecified, delays in converting their original channels to digital while at the same time allowing broadcasters to reach agreements with wireless carriers to move off the UHF band.

Bunnie Riedel, executive director of the Alliance for Community Media in Washington, which represents cable TV public access stations and producers, called the UHF-band auction and the deal with the broadcasters a "giveaway that I guess could equal billions." She added that these actions reflect the new "corporate mentality" at the FCC toward airwaves, which she said "belong to the people, not the broadcasters."

Tom Wheeler, president of the Cellular Telecommunications & Internet Association, said the FCC's decision would result in "extortion" ofhis industry by the broadcasters. "Even after the auction, the broadcasters will have to be paid extortion money to move," Wheeler said in a statement.

Lowell "Bud" Paxson, chairman of Paxson Communications Corp. in West Palm Beach, Fla., who has lobbied heavily for the new auction date and rule change, said in a statement, "Broadcasters are poised to complete arrangements required for early clearing of the band as well as furthering transition to digital television." Paxson operates 17 stations in the UHF band and is the largest group operator with stations in that band.