FCC outlines $15B spectrum flip from TV broadcast to mobile

At its open meeting on Friday, the Federal Communications Commission unveiled its proposal for transferring a big hunk of the TV airwaves from the hands of broadcasters into the waiting arms of mobile carriers. The commission voted 5-0 to kick off the rule-making process for an incentive auction that would allow the broadcasters and carriers to set the prices at which they would be willing to part with or buy that spectrum.

The proposed rules pretty much line up with the details my colleague Stacey Higginbotham outlined earlier this month: The FCC would hold a reverse auction in 2014 in which broadcasters would submit bids to the government for their 6 MHz slices of spectrum. The process is voluntary and the FCC expects only to buy a portion of the 120 MHz targeted. The commission would then “repack” that spectrum into mobile-optimized chunks and sell it to the highest-bidding carriers in a traditional auction. According to a Congressional Budget Office estimate, the process could funnel $15.2 billion into government coffers.

Under the FCC’s proposal some of that spectrum would also be allocated for unlicensed white spaces uses, which could fuel whole new technologies and business cases for broadband. But as Stacey pointed out, the complex auction isn’t without controversy.

Critics question whether the government should be paying broadcasters for spectrum they originally received for free. For their part, broadcasters who want to keep their spectrum aren’t hot on the idea of relocating to different parts of the TV band, which the repacking procedure would require. Consumer groups and smaller carriers worry that the auction will tighten AT&T and Verizon’s stranglehold over the U.S. wireless market by transferring more of the nation’s valuable airwaves into their hands.

In a statement, Public Knowledge was generally encouraged by the proposal, saying that the incentive auction was a way to ensure that public airwaves were put to the best use, though it pointed out that an auction monopolized by the big carriers would do more harm than good. The FCC, however, plans to revisit its spectrum rules governing how many licenses a single carrier can own in a given market, which Public Knowledge said would go far to limit Verizon and AT&T’s chances of dominating the auction.

Carrier industry trade group CTIA also appeared happy with the format. CTIA president and CEO Steve Largent said the auction would not only cleared up much needed airwaves, but it would also do so in a timely manner. He pointed out it took 10 years of planning to bring the 700 MHz and Advanced Wireless Service (AWS) spectrum blocks to auction. Also no new spectrum has come to market since 2008, despite the huge surge in mobile broadband demand the industry has experienced in the last four years.

Friday’s commission meeting also saw the reappearance of LightSquared, which has been desperately trying to stay viable since the FCC denied its plan to launch a nationwide LTE network in its satellite spectrum. LightSquared, now in bankruptcy, has demanded the government give it alternate airwaves in compensation, and on Friday it detailed the specific spectrum it would like: a 5 MHz block in the 1.6 GHz block currently used by the government agencies.

Whether the FCC bites on the LightSquared proposal remains to be seen, but the would-be 4G operator did make one concession the government might like. It said it would share those airwaves with the current government occupants. Spectrum sharing is a big priority for the Obama administration and the FCC.