The Federal Communications Commission has put the wheels in motion to take some airwaves from broadcasters and auction that spectrum for wireless broadband.
In a 5-0 vote Friday the FCC issued what is known as a notice of proposed rulemaking, which is a first step toward determining how its airwaves auction will work. Broadcasters are being asked to voluntarily give up some of their spectrum, which will then be auctioned off to wireless companies. FCC Chairman Julius Genachowski and the wireless industry believe that the nation is running out of spectrum for new platforms and mobile devices, particularly in large urban areas.
Broadcasters, who use spectrum for their TV stations, have countered that there is no such shortage. However, the industry has agreed to support a voluntary process for any broadcaster to sell spectrum.
"Our earnest hope is that those broadcasters who are not volunteers remained unharmed by this process," said Gordon Smith, president of the National Assn. of Broadcasters, the lobbying arm of the television industry. Smith and many broadcasters have indicated little desire to part with their spectrum. "If there is a stampede coming we certainly aren’t hearing any hooves," he said.
The FCC will use a complex reverse auction to try to achieve its goals. The commission will name a price it will pay for airwaves and see how many broadcasters will sell. Simultaneously, regulators will approach the wireless industry to see how many will buy at that price. Then, the agency will start a back-and-forth negotiation until reaching a level both sides agree upon.
The spectrum has been valued at $25 billion and the potential cut for broadcasters is $1.75 billion. The proceeds would go toward building a new national network for law enforcement and public safety officials as well as paying for an extension of payroll tax and unemployment benefits.
Broadcasters looking to sell some or all of their airwaves have a few options. A TV owner can sell all 6 mhz it uses and exit the business or perhaps team up with another owner in its market and each could sell some spectrum and then share their remaining airwaves.
A vote on the auction will likely take place early next year and the FCC would like to have the auction completed by June 2014.
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