700 MHz spectrum still up in the air
Key members of Congress seem to have agreed when television broadcasters should relinquish their valuable analog spectrum in the 700 MHz band, but budgetary and political concerns still threaten hopes that legislation on the issue will be approved this year, as scheduled.
A bill co-sponsored by Senators John McCain (R-Ariz.) and Joseph Lieberman (D-Conn.) and draft legislation proposed by Rep. Joe Barton (R-Texas) — chairman of the House Commerce Committee — call for broadcasters to clear their analog frequencies by Jan. 1, 2009. In addition, as of press time, Senate Commerce Committee Chairman Ted Stevens (R-Alaska) was expected to introduce legislation in late June setting the same deadline for the 700 MHz airwaves to be cleared.
Establishing a “hard” deadline to complete the digital TV (DTV) transition is something the wireless industry has long sought because existing law does not require broadcasters to relinquish their analog spectrum until 85% of all U.S. households own sets that can receive digital signals — a threshold that might not be achieved for decades, according to many analysts.
In addition to the agreement on the date, there are other encouraging signs that DTV legislation will be approved eventually. When Congress passed intelligence-reform legislation in December, the language included a nonbonding resolution calling on lawmakers to approve a bill this year that solidifies the DTV transition. Furthermore, lawmakers have been asked to find $4.8 billion to address a revenue shortfall in the budget, and auctioning 700 MHz spectrum is considered the best way to accomplish this goal.
“I don’t have a crystal ball, but we are farther along than we have been at any time in the pas — we have the chairs of both the relevant committees (Barton and Stevens) saying they will propose legislation,” said Robert Gurss, director of legal and government affairs for the Association of Public-Safety Communications Officials. “There’s certainly a lot of momentum, although we keep having bumps in the road.”
Indeed, the latest bump involves the Barton proposal, which was discussed by a House committee in May, but his draft legislation had not been introduced as a bill yet.
At issue is the cost of a program that would provide digital-to-analog converters so legacy analog TV sets can receive digital broadcast signals. Barton’s draft legislation did not mention any such program, but he acknowledge during the May hearing that some sort of program is necessary to ensure that a projected 21 million U.S. households do not have blank analog TV screens on New Year’s Day 2009 — a prospect that is frightening to many lawmakers.
“If our constituents turn on their TVs and don’t get a signal on a premature date certain, we can guarantee that our political careers will be ended on a premature date certain,” said Rep. Eliot Engel (D-N.Y.) during the May hearing.
But there is little agreement about the scope of a government-supported digital-converter program. McCain’s bill calls for $486 million to support a converter program, but some Democrats believe the program cost could reach $4.5 billion, which likely would undermine the supposed budgetary benefits of auctioning the 700 MHz spectrum.
Opponents of a converter program call it an unnecessary subsidy, while proponents claim it is a justifiable reimbursement to ensure that a government decision does not render citizens’ analog TV sets useless. The wide range of opinions has blurred traditional party lines, Rudy Baca, Precursor’s wireless strategist, said.
“You’ve got Republicans supporting subsidies?” Baca asked rhetorically. “That doesn’t sound like any Republicans I know.”
A coalition of public-safety organizations expressed support for the McCain legislation. In addition to providing a hard deadline for the much-desired airwaves to be made available, it includes provisions that would let Congress earmark additional spectrum to public safety beyond the 24 MHz currently allocated for first-responder communications.
But public-safety representatives acknowledged that any efforts to secure additional 700 MHz spectrum for public-safety data uses will be difficult. Many lawmakers oppose the notion, noting that any additional frequencies allocated to public safety are airwaves that cannot be auctioned to the commercial sector for much-needed revenue.
“I’d like to say there’s 555 legislators that are focused on clearing the spectrum for public safety,” Gurss said. “But, for a lot of members, this is about auctioning the spectrum to raise money for the budget.”
Baca echoed this sentiment. “It’ll be budgetary issues that force the matter,” he said.
Those issues played a large role in driving consensus for the proposed Jan. 1, 2009, transition date, according to several sources. Not only would this date provide adequate time to educate the public about the DTV transition, it would establish enough of a time gap between the upcoming 3G spectrum auctions and the 700 MHz auction that it would prevent a “glut” of spectrum hitting the market too quickly, causing auction bids to shrink.
It’s a legitimate fear, especially if traditional wireless carriers prove to be the only bidders at 700 MHz. However, many analysts believe the prime 700 MHz spectrum will be attractive to other service providers, especially those interested in deploying WiMAX networks.
“At 700 MHz, you could get lots of new and interesting bidders,” Baca said.
If depressed auction prices are a concern, Gurss said lawmakers could rectify the problem by earmarking additional 700 MHz spectrum to public safety.
“If we’re talking about supply and demand, if you reduce the supply in this case, you may not change the dollar amount all that much,” Gurss said.
Of course, Gurss noted that public-safety officials really aren’t concerned about the budgetary topics — and certainly none of the must-carry issues debated endlessly by cable companies and broadcasters — they just want the opportunity to utilize the valuable 700 MHz airwaves as quickly as possible.
Last year, McCain-sponsored legislation was amended in a manner that would have guaranteed that public safety’s 24 MHz of spectrum would be cleared earlier than 700 MHz airwaves earmarked for commercial uses. The bill failed, and there has been no discussion of separating the public-safety spectrum from the commercial spectrum in any legislative proposals thus far.
“We’ve looked at clearing just the public-safety [frequencies] or clearing a few markets at a time, but I think we all realize that it would be a lot easier to do the transition all at once,” said a McCain staff member.
Gurss agreed that the fate of public spectrum in the 700 MHz band appears to be tied to the ability for Congress to approve comprehensive legislation on the DTV transition.
“I have not heard a lot of interest in segregating the channels,” Gurss said. “It seems that the most likely approach will be to transition all the [700 MHz frequencies] at the same time.”
Given all the complexities involved with the issue, Baca said he believes lawmakers likely will only be able to pass DTV-transition legislation as budgetary pressure mounts late in the fall and possibly into December.
“Right now, I think this is all a lot of smoke and mirrors,” Baca said. “I think it’s unlikely we’re going to get legislation any time soon.”
700 MHz — eight years later
August 1997: Balanced Budget Act is signed into law. Act requires the FCC to auction 700 MHz spectrum, but it doesn’t require broadcasters to vacate the airwaves until Dec. 31, 2006, or until 85% of households can receive a digital television signal.
July 2002: On the eve of a 700 MHz auction, President George W. Bush signs legislation eliminating budgetary deadlines for auction of most 700 MHz spectrum.
May: House committee conducts hearing on 700 MHz draft legislation proposed by Rep. Joe Barton (R-Texas).
June: Senate committee scheduled to conduct a hearing about the digital TV transition, specifically a bill co-sponsored by McCain and another expected to be proposed by Sen. Ted Stevens (R-Alaska).
December: Psuedo-deadline for Congress to approve 700 MHz legislation, if it wants to adhere to the schedule approved in a non-binding “sense of Congress” resolution that was part of the Intelligence Reform Act passed last year.