(Washington Post) — The Federal Communications Commission on Friday moved forward with a plan to auction television airwaves that would be re-purposed for wireless networks running smartphones and tablets.
The five-member Federal Communications Commission unanimously approved the preliminary proposal that would put airwaves, currently held by broadcasters, in the hands of eager wireless carriers. The airwaves will be used to expand mobile broadband Internet networks and beef up coverage where carriers already operate to meet the explosive growth of mobile Internet use.
The FCC’s move is the first step in a complicated process that could take at least three years before consumers see any difference in their wireless service, analysts say. The agency plans to take public comment and expects to begin its auction in 2014.
“There is a vital need to free up spectrum,” FCC Chairman Julius Genachowski said at the commission’s monthly meeting. “Demand is rapidly exceeding supply, and mobile traffic is projected to grow.”
Some analysts question whether the plan will succeed. It is also unclear how much spectrum will be up for grabs, experts say.
Broadcasters will first be asked to voluntarily sell airwaves. The agency is looking to raise
$7 billion that would be used to build a network for emergency first-responders. Any remaining funds would be used to pay for the costs of the auction process and to fatten the coffers of the U.S. Treasury.
It will be the first major auction of public airwaves since 2008, when the FCC raised nearly $20 billion after giants Verizon Wireless and AT&T snapped up choice blocks of spectrum that they are using to fuel their mobile 4G high-speed Internet networks.
Smaller carriers and public interest groups have asked the FCC to give special consideration to rivals of AT&T and Verizon Wireless. The two firms hold about six out of 10 mobile subscriptions.
To that end, the FCC said it would consider a proposal to reinstate a limit on how much spectrum any single carrier can own in a local market.
In the past decade, “the mobile wireless industry entered into a phase of hyper-consolidation that has winnowed down the choice of service providers available to Americans,” Carri Bennet, general counsel of the Rural Telecommunications Group, said in a statement supporting the preliminary proposal to cap spectrum holdings.
Genachowski said broadcasters in big cities have expressed interest in the plan. But Gordon Smith, chief executive of trade group the National Association of Broadcasters, is skeptical.
“If there is a stampede coming, we aren’t hearing the hooves,” Smith said in a conference call.
The more likely scenario, analysts say, is for struggling rural television stations to participate. But it is unclear who would want to buy those airwaves.
“We expect many smaller broadcasters to participate in the reverse auction, as it is a good opportunity to monetize underutilized spectrum licenses,” James M. Ratcliffe, an analyst at Barclays Equity Research, wrote in a report. “However, we also believe the portfolio of those spectrum licenses will be uneven in size and geographic coverage.”