Sinclair: Spectrum Crisis ‘Manufactured’

When broadcasters gather in Las Vegas this month for the National Association of Broadcasters show, the “red” they will be seeing won’t all be on the roulette wheels. Broadcasters are angry over what they see as the FCC’s predisposition to view their industry as—depending upon one’s perspective— something to either appease or upend, on the road to a rosy broadband future.

David Smith, chairman/CEO/president of Sinclair Broadcasting, claims the so-called spectrum crisis the FCC and the Obama administration are using to justify the push to reclaim more spectrum from broadcasters is bogus. Sinclair is one of the largest station groups/managers in the country, with 58 TV stations.

“The spectrum crisis, as it is called, is manufactured,” Smith told B&C. “Period. End of discussion. There is no spectrum crisis.”

FCC Chairman Julius Genachowksi has made it clear that broadband is the growth medium. “The spectrum crunch is real,” counters FCC spokesman Robert Kenny. “If we don’t take action soon, it will become a spectrum crisis, and ultimately consumers will pay more for less.…To better ensure quality mobile broadband services are available to consumers, we need more spectrum.”

Smith declined to comment for this story on what he thinks are the motives behind that alleged “manufacturing” effort. He deferred to Mark Aitken, director of advanced technology for Sinclair, to outline the company’s take on the “non-crisis” in the following exclusive interview.

David Smith believes, unequivocally, that there is no spectrum crisis. Explain.

Because spectrum is not the issue. It’s data bandwidth. Data bandwidth is composed of three components: regulatory policy, technology, and spectrum. Spectrum by itself is simply a medium. People consume data. They don’t consume spectrum. We have been trying to reshape the understanding of that, because when you take a look at spectrum that is out there, and add into what’s wholly underutilized, like the EBS [educational broadband service] bandwidth, and put together a map of spectrum that could be made available, what you begin to see—and you have to go to the capital markets— is that there is literally not enough capital available to manufacture the data bandwidth because the economics don’t work.

If you are willing to plow a gazillion dollars into providing a change in regulatory policy, and pile gobs and gobs of money into the technology across the spectrum that’s available, that is one thing. But making it a business that can be supported is another thing.

And the other side of it is that it is about who conveys the message and how does it get conveyed. I am not going to be a conspiracy theorist on this point. But if you start looking at the way the media gets managed [on the spectrum issue]—a study was just released that says that there are now more dropped calls and more lost reception than there was six months ago, and it’s all because there is not enough spectrum.

It’s never argued that the carriers have not bothered to re-mine the spectrum that they already have, utilizing with new technology. If you look at 4G technology, you could literally be adding a 40-times multiplier in the capacity of the network by changing out the base technology. But there is money involved there. There is capital that has to be poured in to make that happen.

But isn’t the FCC also looking down the line five or 10 years to a crunch that can’t be handled by re-mining?

By definition, given some period of time you run out of spectrum by nature of the fact that spectrum is limited. But the question is technological innovation, and how one best utilizes spectrum for the purpose of providing the consumable services that people are looking at. Are they looking out for the long term? I would pose the question like this. What would be the impact of a sky-based data distribution service—LightSquared—on the economics, on availability, on the usage of a fairly fickle consumer community? It has the potential, not necessarily this particular iteration of it, of being a true game-changer in the field of mobile communications.

So, what should the FCC be doing that it isn't doing?

Separate the platform from the services. The way the FCC has traditionally gone about licensing is kind of like cheese. You slice it up and hand out a slice here, and maybe a bigger slice there, and its Swiss cheese because there are holes in it because we have to protect radio astronomy or land mobile.

We're saying: ‘Let's take a clean-sheet approach to this.' We're asking the FCC to look at things in a fundamentally different way. It is like the continuing problem we have with intellectual property rights. When a painter used to paint a painting there was only one.
Now, when you have an electronic piece of art, the laws that govern the property rights have to change. You were dealing with atoms, now you're dealing with electrons. So, similarly, there needs to be a massive rethink about what stands behind spectrum rights and what role does technology play and fundamentally changing what those spectrum rights are and how they apply, then, separate it from the services that consume them.

Look at the core of our proposal. We went to the FCC about two months ago and laid out a detailed overview of how this might work. Rather than fighting for distinct ownership of spectrum, how do you create an environment where the spectrum gets managed to the benefit of more than one party?

How do you?

For example, if you look at what is happening in Europe, which is facing a similar issue with respect to data bandwidth, one of the things that is being employed there enables a broadcaster to support multicast cellular services. Literally LTE being pushed through the broadcast spectrum in support of the most-often used data consumers are using, which is video.

I could go full tilt and say we need to change the whole spectrum allocation in terms of bandwidth, which yields some huge efficiencies by doing that rather than six megahertz slices that traditionally this country has had since the beginning of television. Other
countries have seven or eight megahertz.

If you were to visit the possibility of managing the spectrum for multiple uses, you could come up with a different equation.

If you look at our filing at the FCC, and the Capitol filing, we are talking the same thing. There is a core group of broadcasters that are saying ‘the only way we are going to solve this "crisis,"' and put whatever prefix you want on that: spectrum crisis, data crisis, consuming media crisis. The fact of the matter is that the way we are going to solve it is by coming together around the table in a collaborative fashion with the current stakeholders and the wanna-be stakeholders and hammer out an understanding of needs and do a full re-think based on where we want to go, not just over the next five years, but how this thing is going to play out over a century.

If you do what the FCC's proposing in terms of just taking our cheese and handing it to someone else, it is a revolving door problem. You end up with the same problem at the end of five or ten years, which doesn't solve anything. We're saying let's begin to develop a framework that starts in the regulatory domain that promises to stop this Band-Aid approach to problem-solving and going to the root of the problem and solving that.

And the root of the problem is?

The root of the problem is the way spectrum is managed, this ganging together of platform and services-which was useful perhaps in the analog days but is less than useful in the digital days.

This fault line that exists between analog and digital is really the same issue as atoms and electrons in the information realm.

FCC Chairman Julius Genachowski has said that he would like a clean slate-he called it a white board-but has to deal with a legacy system.
You do have to deal with a legacy system. But there are lots of ways to do that. Put more than one thing into play, and the game of chess changes dramatically.

So, the argument is the FCC is not looking sufficiently ‘holistically' at this problem.

NAB used that word. It's a word that captures it. ‘Holistic' approach is not just looking at broadcast, but at all of the users of spectrum, all of that capacity that gets created when you put policy and technology and spectrum together, not just what is the impact on television broadcasting. It is all of the services that people are seeking. I think it is a noble cause to have national broadband for every American that allows me access in the Mojave desert. I don't know what I am going to do with it.

When you approach a problem from a very fixed mind frame, and I am talking about the FCC, and you think that is the only course that you go down, then you end up with what we have for the framework that was laid out in the national broadband plan. But when you throw the bumpers out and say, ‘what if it wasn't slices of cheese. What if it was Cheez Wiz.' You have a different way of distributing the cheese.

So, given how big the challenge is, the solution requires thinking just as big?

Yes. Because, if you don't take that approach, there is absolutely no question that we will have another "crisis" down the road.

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John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.