FCC Should Stop Coddling Broadcasters - InformationWeek

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11/3/2014
09:06 AM
Lorna Garey
Lorna Garey
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FCC Should Stop Coddling Broadcasters

Spectrum is a finite and valuable resource that must be reallocated to serve the public good and keep up with technology. We can't wait until 2016 to start this process.

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Consider this scenario: Say that in 1927, the feds turned over wide swaths of public land to mining companies, which made many millions harvesting that resource. But that mother lode has dried up lately, and the miners have moved on to new frontiers. The land is sitting fallow. Meanwhile, a new industry -- say, grain farming -- needs that acreage and could put it to productive use. So what do the mining companies do? Refuse to return the land unless they're paid handsomely. And instead of playing hardball with the former miners, the government agency in charge sits on its hands for years as consumers pay ever-higher prices for bread, cereal, pasta, and other food staples.

Swap in "spectrum" for "land," "broadcasters" for "miners," and "mobile telecom carriers" for "farmers" and you have a (dramatically simplified) analogy for what's going on in Washington.

The Telecommunications Industry Association, which represents the communications industry, recently expressed polite concern about the FCC's announcement that the earliest possible date for the voluntary "incentive" auction of 600-MHz spectrum is early 2016. Why the delay? The FCC has a lot on its plate, not least the Net neutrality political hot potato. But we also have broadcasters fighting, in court, to extract millions of dollars to return what is an underused public asset that they never paid a dime for. The National Association of Broadcasters filed a suit in August clearly meant to disrupt the auction process.

[Personal freedom trumps network protection: FCC-Marriott WiFi Blocking Fine Opens Pandora's Box.]

Some background: The incentive auctions cover the 600-MHz band, which is now licensed to television broadcasters for the over-the-air transmissions -- you know, to TVs with rabbit ears -- used by a tiny percentage of households. The auction process itself is incredibly convoluted, involving rulemaking that started in 2012. In a nutshell, the FCC proposes a reverse auction to see what spectrum broadcasters are willing to part with, and for what price. It will then package and sell that spectrum to mobile carriers and use the revenue to pay broadcasters -- all for a public resource that they were given and are dramatically underutilizing. Here's an in-depth historical and legal analysis.

Meanwhile, back in the real world, practical LTE downlink rates are around 14 Mbps -- and that's for all the users in a sector. Consider that a high-definition video stream from the NFL Network consumes about 350 MB per hour, according to Verizon's data calculator. We did the math: That's 78 times the bandwidth of a standard text or voice call. Tablets consume even more data than smartphones, and growth of the Internet of Things will depend on the availability of far more broadband wireless capacity.

IT and telecom organizations should be paying attention. Make no mistake: A spectrum crunch is coming. Allegations of bandwidth throttling, er, network optimization notwithstanding, the only effective tool Verizon, AT&T, and other mobile carriers have to control customer demand is price. Releasing the 600-MHz band is critical to boosting supply and thus keeping mobile broadband costs in check.

"600-MHz spectrum represents a public resource with huge economic and societal value," says Peter Rysavy, president of Rysavy Research and an expert on wireless technologies. "The FCC is exerting heroic efforts in its incentive auctions to realize the potential of the spectrum while balancing the needs of all parties involved. Broadcasters should accept the innate responsibility that comes with licenses that the public has generously bestowed on them and participate in the auctions in a good-faith manner."

However, Rysavy says political reality makes it unlikely there will be any forceful taking of spectrum. He's right. Congress can't even agree to pass a budget or confirm a new surgeon general. So operators are jury-rigging workarounds, including WiFi offload (e.g., Comcast turning subscribers' home routers into public access points), and some have resorted to throttling bandwidth -- for which, somewhat ironically, the feds recently sued AT&T. New mobile broadband technologies, including next-generation LTE Advanced, will help. And the US government is itself sitting on underutilized spectrum, so its hands aren't entirely clean.

Some argue that taking spectrum by eminent domain would set a troubling precedent. What's next? The Internet backbone? Cable? Fiber? This is a flawed analogy. First, we can always lay more fiber. Second, the owners of that capacity paid to build it. Spectrum is a finite resource that the broadcasters didn't pay for, nor do they "own" it. And third, "eminent domain" refers to the process of taking someone's rightful property for the greater public good. Spectrum is not the broadcasters' property.

Look, I can't blame broadcasters for trying to extract every dime and concession. After all, they face a very uncertain future. But at the very least, the FCC should ensure all future spectrum allocations come with a return requirement that triggers when usage falls below some set percentage for a given period.

But first, let's get the auction on the front burner. There is no replacement for more spectrum. It's time to remind the FCC, directly and via our elected representatives, that it answers to citizens and taxpayers, not to broadcasters.

The Internet of Things demands reliable connectivity, but standards remain up in the air. Here's how to kick your IoT strategy into high gear. Get the new IoT Goes Mobile issue of InformationWeek Tech Digest today. (Free registration required.)

Lorna Garey is content director of InformationWeek digital media. View Full Bio
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herickson482
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herickson482,
User Rank: Strategist
11/25/2014 | 10:55:15 AM
Re: The FCC: A Study In Futility
Great article.  I totally agree with all of your major points regarding public spectrum: it is a scarce resource, it is publicly owned, and it is being mismanaged.  For some historical information on events that have occurred over the last several years, please take a look at spectrumofgreed.com when you have a chance.
Lorna Garey
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Lorna Garey,
User Rank: Author
11/3/2014 | 5:46:31 PM
Re: The FCC: A Study In Futility
I totally agree that huge sums of money being waved in the face of any government agency is cause for alarm. The more I read about the spectrum situation, the more it seems that the ideal way to proceed is to wipe the board clean and start over, carving capacity up logically and providing leases for ongoing payment with the caveat that the FCC can with sufficient notice take back underutilized spectrum -- which of course is completely infeasible.

This is intruiging: "Within the existing digital television broadcast there is a mobile service that could be implemented in virtually any hand held smart device with the simple addition of a DTV tuner. Many of the hand sets delivered to Europe have their DVB T2 tuners built in so it is not a manufacturing issue. The problem is that the service providers won't enable the tuners because they cannot charge for the data that is delivered via the over the air broadcast. In the US the carriers have takes such a strong position against the inclusion of tuners that the manufacturers won't even put them in."

Isn't that just prolonging the current broadcast model of "you will watch what we decide to program, when we decide to run it." On-demand aside, it seems clear that the future is on-demand "pull" model of content, not the current "push" model. Apple TV, Chromecast, Amazon's Prime programming.

I did look to find out how many household use over-the-air signals. The latest study I saw was about 19.3%. Compare that to the number carrying smartphones, 56%. 

 

 
wt_hayes
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wt_hayes,
User Rank: Apprentice
11/3/2014 | 5:00:00 PM
Re: Band Width Throttling: Truth or Dare ?
Have you talked with any broadcasters about this? I have and I don't think they are relying on consumer appathy at all. If anything they are trying to get the consumers to recognize the value of the services they offer. Especially given that they are offered at no cost to the consumer. 
wt_hayes
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wt_hayes,
User Rank: Apprentice
11/3/2014 | 4:56:26 PM
Re: The FCC: A Study In Futility
Yes, the congressional mandate that started this process does indeed give the FCC until 2022 to complete the process. I also have to confess that I do not find the delay unacceptable. As I said, I would rather see the work done correctly than quickly because as I believe you pointed out earlier, the plan needs to accomdate the technologies we currently know about and the ones we don't.

A lot of the problems with the 700 MHz auction were not unforeseen, the FCC refused to listen to the technical experts from outside and inside the Commission. They were focused solely on getting the money in and as a result, they got a lot less for the spectrum than they could have and they still ended up with problems with wireless services adjacent to channel 51 to the point where the organizations that purchased that block are now paying channel 51 television stations to move lower in the UHF band just so they can make use of the spectrum they already own. The interoperability issues were predicted long before the 700 MHz auction was conducted. Now there are similar issues associated with the 600 MHz auction. The same RF experts are pointing them out to the Commission and hopefully this time they are listening.

However, the wireless industry is now once again waving the promise of huge sums of money in the faces of the FCC and trying to lure them into making a decision based on money rather than sound engineering practice or benefits to the consumers. If you look at the wireless industries business model, they sell data delivery which is a highly commoditized product. The only way they can be profitable is through volume and what data service consumes more volume than video and the higher the quality of the video the more data packets required to deliver it and thus the more they can get from the consumer. Within the existing digital television broadcast there is a mobile service that could be implemented in virtually any hand held smart device with the simple addition of a DTV tuner. Many of the hand sets delivered to Europe have their DVB T2 tuners built in so it is not a manufacturing issue. The problem is that the service providers won't enable the tuners because they cannot charge for the data that is delivered via the over the air broadcast. In the US the carriers have takes such a strong position against the inclusion of tuners that the manufacturers won't even put them in. No instead they want the FCC to give them the spectrum so that they can implement broadcast video delivery through their own system and charge the consumer for the use.

Now I don't object to the wireless carriers looking for ways to maximize their business, that is what businesses do. I just don't think that the consumers should have to pay for services that are available for free.

 
Technocrati
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Technocrati,
User Rank: Ninja
11/3/2014 | 3:22:23 PM
Re: Band Width Throttling: Truth or Dare ?

"...Then again, one wonders how profound the public pressure would have to become in order to make inroads."

@Michael Endler     I agree.  It is the apathetic nature of consumers that Broadcasters bank on - literally.

Lorna Garey
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Lorna Garey,
User Rank: Author
11/3/2014 | 3:20:27 PM
Re: The FCC: A Study In Futility
The FCC kept a lot of 700MHz spectrum for the FirstNet public safety band, and it's still (last I checked) slicing and dicing what's left and selling it off while trying to overcome interopererability issues -- and that process started in 2008. There are also guard band issues tied up in muni wi-fi politics, and myriad other technical considerations.

However, my point is not about technical nitpicking, it's about principle: The FCC should not be going hat in hand to broadcasters -- or, for that matter, AT&T or Verizon. It should be making rules with the interests of the majority of consumers in mind.

It's not. 2022? Really? And you find that delay acceptable?

 
wt_hayes
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wt_hayes,
User Rank: Apprentice
11/3/2014 | 3:19:00 PM
Re: Can Someone Please Tell Me.....
Glad to help.
wt_hayes
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wt_hayes,
User Rank: Apprentice
11/3/2014 | 3:18:26 PM
Re: Eminent Domain: A No Brianer
I am not absolutely sure but I think the usage fees are based on market size. Other license fees (translators, microwave relays, etc.) are a flat fee, I think.
Technocrati
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Technocrati,
User Rank: Ninja
11/3/2014 | 3:17:51 PM
Re: The FCC: A Study In Futility

@Lorna    Oh yeah, how could I forget about Net Neutrality ? Another issue that is needlessly complicated in my opinion.   I support openness of course and the fact that this isn't an easy proposition is probably due in part to the conditioning Broadcasters have come to expect. 

Stay tuned, if Net Neutrality is not handled correctly .....I hate to think of what might happen to my blood pressure then.

Sounds to me like the FCC is going to need more staff.

Technocrati
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Technocrati,
User Rank: Ninja
11/3/2014 | 3:03:11 PM
Re: Can Someone Please Tell Me.....
@wt_hayes    Thank you for clearing that up, I appreciate your knowledge of this subject.
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