The ideas so far present an opportunity to free up valuable spectrum now occupied by TV broadcasters. Such spectrum is much needed for the new and innovative wireless technologies on the horizon. Spectrum auctions also will benefit taxpayers to the tune of many billions.
Powell and staff suggest changing the way households capable of receiving a digital signal are measured. This is a critical metric, because, according to current law, 85 percent of households in any market must be able to receive digital broadcasts before the extra TV channels broadcasters were given to get them through the transition can be freed up.
Congress established a 2006 target for the end of the digital TV transition and the release of this "analog spectrum." But the process is stalled because, as calculated, it is not likely that the 85 percent trigger will ever be achieved.
Digital TV offers a number of advantages, including the ability to provide better-quality pictures, a greater array of programming and new services, such as interactive TV. But the transition has foundered on the shoals of a government policy at odds with market reality. That policy is premised on a transition to free over-the-air broadcast TV when, in fact, only 10 percent of viewers receive television this way, and that percentage is declining.
This issue is politically difficult, because it pits powerful interest groups (the broadcasters and the cable and satellite providers) against each other.
The proposal floated by the FCC staff recognizes that most consumers get their TV from cable or satellite and counts those services toward the 85 percent trigger, if subscribers are able to convert digital signals for their analog sets. Currently, cable and satellite viewers are for all practical purposes not counted. This means, in effect, that 85 percent of the viewers in any market must be capable of receiving over-the-air digital broadcasts.
This, in turn, means that consumers would have to buy expensive over-the-air receivers for the 85 percent trigger to be satisfied. These receivers would have virtually no utility for cable subscribers and would be useful for satellite subscribers only in selected areas, where satellite may not carry local signals.
Hopefully, these new FCC options signal a broader discussion of ways to accelerate the digital TV transition. The United States is not the first nation to confront this challenge. In Berlin, analog TV transmission was turned off at a fixed date. Low-income households were given a digital-to-analog converter box; other households were expected to convert to a subscription service or buy their own converter.
There is no alternative to government taking the lead and doing it sooner rather than later.
The law also permits rebroadcast of distant signals, if the programming is not available locally. But the current distant-signal provision of SHVIA applies only to analog signals. When the act is renewed this year, this provision should be extended to apply to distant digital signals.
This would help the transition in two ways. By making digital broadcast satellite more desirable, it would move viewers to subscription TV. And, by increasing the digital programming available, it would increase demand for digital TVs.
Moving the nation the rest of the way from its current approximately 90 percent subscription viewership raises the prospect of reclaiming the entire amount of spectrum currently reserved for broadcast TV (402 MHz) and auctioning it off for other, higher-valued uses. Estimates, based on recent auctions for 3G spectrum in both the United States and Europe, put the market value of the TV spectrum as high as $367 billion. If just analog spectrum were returned, the amount of spectrum relinquished would be smaller but still very valuable.
This issue is politically difficult, because it pits powerful interest groups (the broadcasters and the cable and satellite providers) against each other. But there is no alternative to government taking the lead and doing it sooner rather than later. When demand for the airwaves for innovative new wireless communications technologies is exploding, the costs of delay are huge.
Biography
Thomas Lenard is vice president of research at the Progress & Freedom Foundation in Washington, D.C.
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- Suspect Value
- I presume the "analog stations" for sale that you talk about are channels 51 through 69 which are already on the block. That is a total of 19 stations. Three of them have been sold in Auctions 44 and 49 and the total proceeds was around $140 million. If we upped the take to $50 million per station and applied it to the rest of the stations to be auctioned, 16, less the four reserved for Public Safety, 63, 64, 68 and 69 you are left with 12 stations. At $50 million each that would total a whopping $600 million or something less than the wild numbers I see constantly predicted. Most predictions are predicated on the British and German Auctions of 2000 which brought in around $35 and $45 billion respectively. Those days are gone for some time to come. Those prices were paid for spectrum wireless telcos thought they needed for 3G phone service. If telcos need more spectrum today or in the near future it would be in the cities and it is precisely there that they will see their spectrum needs actually diminish as ubiquitous WI-FI networks offer their customers with dual purpose cell phones the automatic option of using VOIP. Other uses for the spectrum initially at auction, channels 51 through 69 would be mobile Internet access. Why pray tell would people who paid money for their 700 MHz spectrum at auction use it for mobile Internet when the FCC is allocating higher power levels and more spectrum to WI-FI and WILAN and it seems politically correct thing for them to continue to do? Someone who owns such spectrum would find that much of their supposed mobile Internet cusotmer base may be satisfied with WI-FI hot spots and Metro-Spots. They may indeed find themselves "Iridiumed" with only customers that travel regularly to the North Pole. So what will this spectrum be auctioned off for? Less! What will it be used for? Broadcasting!
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