Spectrum, Auctions & Broadband Policy

The FCC plans to vote this month on its plans to auction off spectrum currently held by local TV broadcasters to support development of a national wireless broadband system.  That despite concern that few broadcasters will volunteer to give back their licensed spectrum. (Authorizing legislation requires that any spectrum return be voluntary, and that stations who do must share in auction returns).  It remains unclear how much spectrum will become available, and how quickly.
  Several recent reports from Europe also suggest that a rush to auction might not be a good idea, for different reasons. 
  In one, the Dutch government agency responsible for telecom and spectrum use announced that only five companies had registered to participate in the auction.  The agency didn't divulge the entrants, but those following the auction expressed doubts that the group included any new entrants (some of the spectrum to be auctioned is reserved for new entrants only).  Also, a recent auction of 4G spectrum by France generated only $3.45 billion, significantly below early expectations, and barely above what it indicated would be the minimum target.  Recently, spectrum auctions have rarely approached stated expectations and goals in terms of revenue generation.  Operators are finding that the increased competition and unexpected costs in building the infrastructure (mostly from local opposition to tower construction) are cutting profit potential, particularly when economies aren't performing well.  This has kept bids low.
  There are other issues reflected in a recent announcement from the UK government that it will be scrapping its initial plans for a fast national broadband wireless service similar to that envisioned by the FCC.  While there were strong initial bids for licenses in urban and suburban areas, there was minimal interest in serving the more rural third of the country, despite heavy subsidies.  In addition, they found that service roll-out was taking much longer than expected in urban areas, largely due (again) to local concerns and "red tape".  One approach being considered is to rewrite the regulations so that operators don't need to go through any local planning process, a proposal that is, not surprisingly, generating a lot of concern politically.  Further, many of those supporting broadband access are concerned that the rural systems may be subpar, using older cheaper equipment and lines, and that even in urban areas delays can mean that designs and projects may not utilize the most current technologies in a rapidly changing field.

  What's happening in Europe and elsewhere raises the possibility that if the FCC rushes to set standards and undertakes auctions before the actual spectrum has been secured, it could well result in both reduced auction revenues and poorer system design and infrastructure once implemented.  In uncertain economic times, the potential value of spectrum falls - and is further devalued if the spectrum you're buying won't be available for several years.  On the other hand, the history and tradition of telecomm innovation is that technological capabilities increase rapidly, while also becoming less expensive.  If auction plans include commitments to design, delays between auction and implementation can lock operators into older, less capable and more expensive systems.

  So let's hold off on the auction until the spectrum is in hand.

Sources - FCC to vote on auction of unused broadcasting spectrum,  TelecomEngine
Dutch spectrum auction attracts five participants,  Telecom Engine
French government rasies $3.45 billion in 4G auction,  Telecom Engine
UK government scraps planning regulations for superfast broadband,  Telecom Engine

FCC - Wireless broadband may take a while

Earlier this year, Congress gave the FCC part of what it wanted to set up a nationwide broadband WiFi service, setting aside a chunk of spectrum for wireless broadband from recovered TV broadcast spectrum.  However, the legislation also made the spectrum giveback voluntary for TV stations.  As a result, most experts foresaw difficulties in pulling together enough concentrated spectrum to generate the 80 megahertz sought.
  FCC Commissioner Robert McDowell outlined the problems at the Mobile Marketplace conference Monday.  Strong resistance from TV broadcasters make a quick, smooth, transition unlikely.  Likening the complexity of the situation to "three-level chess," McDowell outlined the FCC's current thinking on the process.

In the first phase, a “reverse auction"--in which multiple stations will compete to sell spectrum to the FCC -- those that want to turn over some or all of their spectrum can seek the price they want, but without any guarantee they'll get it.  If two or more stations in a market offer to sell spectrum, the FCC would be able to choose the lowest price. Then, in a regular “forward auction,” the FCC will resell the frequencies to wireless operators bidding for airwaves.

One problem with the current approach is that unless there is a rush by stations to give back valuable spectrum and/or tack on the costs of moving frequencies, there is no guarantee that the local 6 mHz TV channels returned will be either consistently available, or adjoining (to form coherent spectrum), on a national basis.  Thus, McDowell stressed the need to "design your apps as efficiently as possible," in order to provide the flexibility to deal with what is likely to be a piecemeal spectrum availability in the near term. 
“I don’t anticipate any major chunks of spectrum getting into the hands of consumers for the better part of a decade,” he concluded.

Source - FCC: Bandwidth Relief Not In Sight, Online Media Daily

Related posts - Congress approves TV Spectrum auction (sort of)
Spectrum Spat Continues - Will the Real Squatter Please Stand Up?

Spectrum Spat Continues - Will the Real Squatter Please Stand Up?

  The TV spectrum take-back plan in the latest Obama "jobs" bill is on hold, as a result of the Senate declining to bring the bill to a vote.  In the meantime, the various players are expressing their opinions vociferously, and occasionally with strong language.
  In a recent editorial, the head of CTIA (a wireless operator trade group), accused LPTV (low power television) operators as being "squatters" on the spectrum.  Holding licenses from the FCC, LPTV operators clearly aren't squatters in the normal sense, although they could easily be described as second class citizens, as their licenses and channel assignments are conditional on not interfering with new or existing full power stations.
  The choice of the "squatter" label may be particularly problematic for the wireless group.  As several representatives from the Coalition for Free TV (a LPTV trade group) pointed out, several recent studies have alleged that wireless operators have plenty of spectrum, but are just not using it (for a variety of reasons).  Squatters would seem to be a better description for an industry that is sitting on unused spectrum while demanding more.
  LPTV operator Rod Payne spoke of his church-affiliated station -

"I am not a squatter. I am a public service-oriented broadcaster that uses the airwaves entrusted to our station to provide broadcast opportunities to greatly underserved groups of the American public. The fact that like many in this industry, I do not generate enormous revenue, but instead provide information, encouragement and dialogue that is being over-looked in a misguided attempt to generate a minuscule amount of revenue for this nation. Allow us and countless others in our industry, to use the spectrum that has been entrusted to us in new ways and we will provide much of the populace with communication avenues the wireless industry can only dream of."

Source - LPTV group tells CTIA to use mirror to see squatter, rbr.com