FCC Backs Proposal to Realign Airwaves - New York Times

WASHINGTON â€" The government took a big step on Friday to aid the creation of new high-speed wireless Internet networks that could fuel the development of the next generation of smartphones and tablets, and devices that haven’t even been thought of yet.

The five-member Federal Communications Commission unanimously approved a sweeping, though preliminary, proposal to reclaim public airwaves now used for broadcast television and auction them off for use in wireless broadband networks, with a portion of the proceeds paid to the broadcasters.

The initiative, which the F.C.C. said would be the first in which any government would pay to reclaim public airwaves with the intention of selling them, would help satisfy what many industry experts say is booming demand for wireless Internet capacity.

Mobile broadband traffic will increase more than thirtyfold by 2015, the commission estimates. Without additional airwaves to handle the traffic, officials say, consumers will face more dropped calls, connection delays and slower downloads of data.

The F.C.C. will issue proposed rules for what it calls incentive auctions â€" the sale of airwaves that are voluntarily given up by broadcasters in exchange for a portion of the auction proceeds.

A proposal detailing the program will be released next week, officials said.

The commission will seek public comments over the coming months.

“In this flat, competitive world, capital and talent can flow anywhere,” Julius Genachowski, the F.C.C. chairman, said before the vote. “We’re in a global bandwidth race. It’s similar to the space race in that success will unleash waves of innovation that will go a long way toward determining who leads our global economy in the 21st century.”

The auctions are not expected until 2014, but commission officials and Congress have estimated that the process could generate $15 billion in proceeds. About $7 billion of that would be set aside to build a nationwide emergency communications network for public safety officials, a yet-unfulfilled recommendation of the 9/11 Commission.

The auction proposal received widespread acclaim from wireless companies, Internet trade groups and telecommunications experts â€" just about everyone, that is, except television broadcasters. Most broadcasters want to retain their airwaves, and they have disputed a brewing shortage of spectrum.

Industry lobbyists note that broadcasters gave up significant amounts of airwaves several years ago in the conversion of television signals to digital from analog format. That spectrum was auctioned in 2008, with no compensation to broadcasters, and industry officials grumble that many of the buyers of those airwaves have not used them yet.

Gordon H. Smith, a former Republican senator from Oregon who is president of the National Association of Broadcasters, said on Friday that he thought the high expectations for the auction “may be premised on the mistaken belief that broadcasting is an industry in decline.”

Some major broadcast groups, including CBS, which owns more than two dozen broadcast channels around the country, have said they do not intend to give up their broadcast spectrum.

But Mr. Genachowski said he believed there were many small broadcasters, particularly independent, individually owned stations in urban areas, whose low profit margins and lack of original programming made them more likely to give up spectrum in the auctions.

Also casting some wariness on the auction details were the commission’s two Republican members, who warned against making the auction rules so complicated that they exclude potential bidders, lessening the chances the auctions will raise enough money for the public safety network and other uses.

Robert M. McDowell, a Republican commissioner, said that the agency must remain open to public and industry recommendations about how best to structure the auctions and the movement of broadcasters to new places on the electromagnetic spectrum.

“In the past, regulatory efforts to over-engineer spectrum auctions have caused harmful, unintended consequences,” Mr. McDowell said.

The auction process will have three parts. In the first, the F.C.C. will conduct a reverse auction to determine which holders of broadcast television licenses will submit bids to voluntarily give up their spectrum rights in exchange for payment.

In addition to seeking the broadcasters that will give up their licenses and go off the air, the agency will also consider whether to allow alternatives, like agreeing to allow broadcasters to share spectrum with another station or to move from a UHF television channel to VHF, which occupies different spots on the dial.

A second portion of the process involves repacking â€" essentially moving and squeezing together the remaining airwaves so they occupy a smaller portion of the spectrum band, known as UHF. Once those bands of newly available spectrum are identified, they would be auctioned in the traditional format, going to the highest bidders.

Those three parts can be conducted either consecutively or concurrently, and the F.C.C. is seeking comment on that approach as well.

The F.C.C. also voted to begin a review of its mobile spectrum ownership policies, specifically whether it should revise its limits on how much spectrum any one wireless telecommunications company can own in a geographic area.

The F.C.C. now limits companies to holding no more than one-third of an area’s available airwaves. Big wireless companies have said those rules, put in place more than a decade ago, should be changed to allow bigger holdings by dominant carriers.

Smaller wireless companies, however, say the F.C.C. should keep limits while also changing its counting method to give greater weight to the most attractive spectrum bands, on which signals travel further and more easily through obstacles like buildings.