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FCC Details Spectrum Proposals

The FCC released technical papers June 15 supporting and
expanding on its National Broadband Plan spectrum proposals, including making
its pitch for reclaiming broadcast spectrum. 

Owners of smaller stations who might want to cash out may be
out of luck. The FCC says few if any of those will likely be up for auction.

The report, entitled "Spectrum
Analysis: Options for Broadcast Spectrum
," concedes that clearing
broadcasters off spectrum in major markets could impact "the number and
diversity of broadcast 'voices' in a community or market," but it
suggested that could be mitigated by competing voices.

"Consumers in these markets tend to have a relatively
large number of alternatives to view television content -- a median of 16 OTA
full-power television stations, OTA low-power stations and digital multicast
channels, at least three to four multichannel video programming distributors
(MVPDs), and a growing amount of broadband Internet video content, increasingly
delivered to the TV."

The report's enumeration of these competing voices to buttress
its case might strike broadcasters as ironic considering their efforts to get the
FCC to take those same voices into account in its media ownership review when
it looks at diversity in a market.  

The commission also talks about compensating over-the-air
viewers who lose access to signals with free cable service for life, or a
coupon program for equipment upgrades for those who lose service due to
coverage area reductions. The FCC will have to repack stations after the
reclamation, just as it did after it moved to DTV and simultaneously
reclaimed the 700 MHz spectrum.

"Since a significant portion of the TV bands is not
directly used for broadcasting, a limited number of stations in a limited
number of markets choosing to participate voluntarily could recover a
significant amount of spectrum," the FCC said the report. "The FCC
would, of course, seek to ensure that such auctions and other actions to enable
reallocation do not significantly adversely affect particular communities of
American TV viewers."

Former FCC broadband advisor Blair Levin told B&C two weeks ago he was confident
from conversations with broadcasters and Wall Street that the reclamation
could and would be achieved voluntarily. "[S]ome stations may realize that
their spectrum license holds more value in an auction than they can achieve
under their current business model and future broadcast opportunities."

While the FCC is willing to give broadcasters a cut of
billions in auction revenues for the reclaimed spectrums, buyers in smaller
markets could be out of luck.

According to the FCC's caluclations, the vast majority (93%)
of stations in markets 100-plus are using fewer than 10 channels out of a
possible 49. "Since the TV bands in markets 100+ are not constrained with
large numbers of full-power broadcasters, very few stations (and perhaps none
at all) in these markets are likely to be included in an incentive

The FCC must still get congressional approval to share
auction proceeds with broadcasters, which is the "incentive" part of
the auction proposal.

As to compensating viewers for lost or reduced service,
which could be subject to some kind of means test, the FCC said it would be
"reasonable-i.e., lower than the cost for the DTV coupon program and
much lower than the proceeds from an auction of the reallocated spectrum."

The Consumer Electronics Association was quick to praise the
commission report. CEA, which has been pushing for the reclamation, said the
report made a "compelling factual case for all stakeholders to embrace the
voluntary auction of underused broadcast television spectrum to address our
nation's looming mobile broadband crisis."

CEA also pointed to the paper's conclusion that
broadcasters could share channels and still do HD. 

The FCC said that while broadcasters talk about
mobile DTV as their future, the business model is still in its
infancy and its success against competitors for mobile video has yet to be
determined. It also points out that stations cannot deliver HD and
mobile DTV at the same time, though they may be able to do so with
technological advances in the "not-to-distant" future.

The FCC said it welcomes input on the report on its blogs,
in an engineering forum announced at the National Association of
Broadcasters convention in April, and after it proposes its spectrum
rulemaking, now planned for the third quarter.

"NAB is reviewing the paper and looks forward to
working constructively with the FCC on fact-based findings, mindful of the
importance and enduring values of free and local television to the American
people," said National Association of Broadcasters EVP Dennis Wharton.

NAB has been lobbying against the reclamation proposal,
concerned that it might wind up being less voluntary than advertised, including
the mandatory repacking--and subsequent dislocation--of channels that would be
the result of even a voluntary effort.

In the other paper, the commission outlined its plans
for creating an interoperable public safety network. That comes as the Congress
prepares to vet a bill that would provide funding for the effort and require
the FCC and the National Telecommunications & Information Administration
divide up the work of overseeing construction and operation of the network.

 There is nothing in the FCC report that conflicts with
the bill's instructions, said an FCC source familiar with both.