Tales of the Sausage Factory

Could the FCC Structure A Broadcaster Clearance Auction Without Congress? Yeah, actually . . .

Progress and Freedom Foundation has recently published this piece by Adam Theirer and Barbara Esbin on how encouraging a deal between broadcasters and wireless providers to reduce the spectrum used by broadcasters and auction more spectrum for wireless use would serve the public interest. The piece raises some good points. For one thing, it is happily free of the “broadcasters are obsolete and we ought to take their spectrum back” rhetoric that often accompanies these proposals (not from PFF, I should add, but from a number of others). But the paper is woefully short on specifics. It touts the value of such a deal (freeing up spectrum for wireless) and lays out some general approaches, then urges the FCC and Congress to broker a deal between the broadcasters and the wireless industry through a number of possible auction mechanisms.

And now, the FCC has issued a public notice in the National Broadband Plan soliciting input on what they should think about using broadcast spectrum as part of the national broadband plan.

This got me thinking. Is there a mechanism the FCC could use, consistent with existing law, which would allow for the sort of broadcast band clearance the FCC would like to see? And, as a bonus, could this also clear some space for white space use? After some consideration, I hatched the scheme below. It is somewhat slower than than the wireless industry would like. I expect it would take about 5 years to finish the transition. But that is not bad given that it took 4 years to manage the DTV transition and auction from the time Congress set the hard date in 2005 to the end of analog broadcasting in June 2009. Also, my plan would allow continuing gradual build out, and combines some sticks to go with the carrots.

I’ll add that I’m not convinced this is worth doing. I think the current obsession with broadcast spectrum as the solution for the upcoming spectrum crisis suffers the same myopia as focusing on offshore drilling to cure the energy crisis — it defers the crunch but doesn’t solve the underlying problem. Wireless demand is going to continue, and we need to fundamentally change how we manage spectrum access (rather than spectrum allocation) to remain on a sustainable path for growth. I also point out, as we discovered while doing the broadcast white spaces proceeding, that there are a lot of non-broadcast uses in the existing television bands that are not broadcast users. These secondary services are going to get awfully squeezed if we crunch the broadcast bands further.

All that said, a well constructed auction could free up a nice chunk of spectrum in the short term that could promote wireless services and competition — especially if it came with a spectrum cap so VZ and AT&T didn’t hog all the good stuff again.

More below . . . . .

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Tales of the Sausage Factory

“Will Comcast Join the NAB?” Measuring the Merger On The Trade Association Scale

Few rivalries in the media world match those of cable operators and broadcasters. Since the first cable regulation by the FCC to prevent cable operators from importing blacked out sports events and “distant signals” that threatened local broadcast content back in the 1960s, broadcasters and cable operators have constantly sought regulatory advantage over one another. Broadcasters once ruled video as its unchallenged masters. Then came cable, which became the dominant platform for delivery of video. But broadcasting continues to aggregate mass audiences and produce more popular programming. Despite all the yapping about how no one can tell broadcast and cable apart anymore, neither one can survive without the other, but both have radically different interests. As a result, the broadcasters and the cable operators, and therefore their trade associations, are constantly at loggerheads.

The fact that Comcast, after acquiring NBC’s broadcast stations, will be eligible to join the National Association of Broadcasters, underscores just how radically and completely the proposed Comcast acquisition of NBC extends Comcast’s reach into every sector of communication. In ideological terms, it is rather like Vatican City joining the Arab League. But that’s not the only powerful trade association Comcast would now be eligible to join. Comcast will also be able to join the MPAA. Depending on how it develops its broadcast spectrum and other wireless assets, it could join CTIA and other wireless trade associations. These, of course, join the already impressive list of trade associations Comcast already belongs to as the largest broadband access provider, one of the largest residential phone companies, purchasers of telecommunications equipment, etc.

So I propose a new metric for measuring antitrust impact of mergers, the uniquely Washington “Trade Association Scale.” How many trade associations will you qualify for after the merger. If the number is too high, that shows you are getting into far too many lines of business to be healthy, because you have too much influence on everybody else’s business. And on the Trade Association Scale, the Comcast/NBC merger ranks a 10 out of 10.

More below . . .

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Tales of the Sausage Factory

An Open Letter To Blair Levin On The Subject of National Broadband Public Notices

Dear Blair:

I surrender! I admit defeat. I cry “uncle.” You win. Despite my earlier doubts, I am now prepared to say the National Broadband Plan process is the most open, transparent, comprehensive, bestest and wonderfullest proceeding ever in the entire history of the FCC since passage of the Communications Act of 1934! Just please, please PLEASE no more public notices. [break off into uncontrolled sobbing]

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Tales of the Sausage Factory

Much Better Senate Draft from Democrats

The Democrats of the Senate Commerce Committee have begun circulating this draft revision of the wretched Communications, Consumer Choice, and Broadband Deployment Act of 2006 (aka “The Stevens Bill). Not only is the Democrat draft a lot shorter (a big plus), it:

(a) Eliminates the really bad munibroadband provision in the Stevens Bill with good language similar to the McCain-Lautenberg Community Broadband Act.

(b) Eliminates the excruciatingly awful net neutrality provision in the Stevens Bill and replaces it with the good language from the Internet Freedom Preservation Act sponsored by Snowe, Dorgan, and Inouye.

Happily, the Democratic Draft also contains the good stuff from the Stevens Bill: opening up the broadcast spectrum ”white spaces” and limiting cable market power over regional sports programming. (Although the Democratic draft is not quite as strong there as in the Stevens bill. Ah well.) Sadly, the Democratic draft also contains a broadcast flag provision.

It’s still a draft, of course. But it shows how the momentum on critical issues continues to shift in the right direction now that the public has started tuning in and speaking up. Last month, the telcos and the cable cos were enjoying a victory march reminiscent of Sherman’s march to the sea. Now, the telco/cable push to get Net Neutrality eliminated by Congress is looking a lot more like Napoleon’s march on, and subsequent retreat from, Moscow.

Stay tuned . . . .

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