Should the FCC Reclaim Broadcast Spectrum ?

The premise is very simple.  Over the air broadcasters, the people who bring you TV that you can get with rabbit ears, pay nothing to the government for the allocated digital spectrum over which tv is delivered. Not only do they pay nothing to the government for that spectrum, they are no longer only using it exclusively to deliver a tv signal. They have about 19.2mbs of digital bandwidth available to them and rather than using it all for the delivery of the highest quality tv signal, they are now trying to slice and dice that bandwidth and monetize it in any way they possibly can. They create new tv channels, they lease it to companies who use it for other applications.  They basically auction it off to where ever they can find the most profitable revenue stream.  So why should the broadcaster be allowed to keep the bandwidth they are not using for their TV channel ? Rather than their auctioning it off , lets let the government reclaim it and auction it off.  Offered on a national basis, the sum value is greater than its parts and should be able to put a pretty penny in the federal coffers at a time it is sorely needed .

It makes perfect sense to me. Except that no one has really taken a contrary view on how that spectrum could be used in the future. No one has asked the question of whether or not we will regret having reclaimed that bandwidth in the future.  Of course the cynic in me always looks to see how the government might be wrong. What would cause us to regret reclaiming and reselling the spectrum ?

At least a couple things I can think of.

1. The simplest  revolves around a  question: Will there be higher bandwidth applications in the future that consumers will expect to be delivered for free to our TVs ? On the bottom of the importance scale could be 3D TV.  Of course whether or not TV is delivered in 3D is not very important.  No more important than needing to have color delivered over the air as black and white disappeared. But if 3D does become important to consumers and an expectation of the TV viewing experience (there are technologies that dont require glasses, and they will improve in quality and decrease in price), if over the air broadcasters are not required to offer it, consumers will be at the mercy of cable/telco/satellite tv distributors to charge whatever they want and the value and most likely sustainability of over the air broadcasters will decline considerably.

As I said, 3D TV is an example, but not necessarily a good one.  Ask yourself a simple question. What type of high bandwidth applications could you imagine being delivered to our future digital TVs in 5, 10, 20 years ? Now that TV is delivered digitally over the air, and all new TVs are digital, basically computers behind a screen, is there any reason not to believe that an entirely new generation of applications will be developed that benefit from being delivered over the air ? That what we call TV today, could look very antiquated in 1o years if we only had the bandwidth to enable it ?

Of course this is where people chime in and say “the internet can support all of that”. Not so fast.  The beauty of broadcast TV is that it has 2 very unique features that differentiate it from delivery of content over the internet. The first of which is economic. The marginal cost per viewer is zero. In other words, it costs the same amount to deliver the 19.2mbs of applications and content to the first viewer as it does to every possible viewer. That is not the case with the internet. If that were the case there would be no need for companies like Akamai to even exist.  Every additional internet viewer or user costs the broadcaster of the content money. Each incremental viewer requires a variety of additional resources, from CPU cycles to bandwidth.  Broadcasting over the air is always cheaper than on the net.

The 2nd feature that differentiates it significantly from the internet is the fact that it is a true broadcast medium.  There is no contention for the bandwidth that is being delivered. On the internet if someone in your neighborhood is using a lot of bandwidth, your performance could slow down. With a broadcast medium, you can run into distance limitations, and like the internet delivered over cable, there could be interference issues, but unlike the internet, the performance and quality of broadcast tv is never impacted by the number of people receiving the signal or the other things they may be using the shared bandwidth for. Thats important.

Why is it important ? For national security reasons ?

Right now the spectrum is officially owned by the government and broadcasters have an obligation to act in the interests of the people, as defined by the FCC.  If we auction off the spectrum to private interests, its gone. It is  owned privately. The government cant get it back no matter how badly it needs it without taking steps that are damning in their very nature.

What could the government need the spectrum for ?

2.  National Security. Thats what the government could  need it for. I don’t know of a single person with a technology background that doesn’t believe there will be a cyber attack of some consequence in the next 10 years that will essentially shut down a city, region of the country or worse.  I was in NY during the blackout 6 years ago. That was bad. We relied on backup generators to power our TVs and battery powered radios.  But things have changed considerably in just 6 years.  We have become far more digitally dependent.  Much of our lives is transported through the internet, and that dependence is increasing. It is going to happen. Hopefully it will be on a small scale and we will immediately get smart enough to prevent it from happening again.  But what happens while an entire city’s internet and digital infrastructure is down ? How do we communicate or receive communications ?

We get our communications through broadcast. Im not talking about being able to get your CBS evening news over the air to your TV. Im not talking about whether or not you have access to a crank powered radio to hear the latest.  Im talking about the value of having 19.2mbs of bandwidth that is able to reach most of the population in the continental US and deliver whatever type of information /data that we may need.

This isnt something that could easily happen today. But if there was a huge emergency, it sure would be nice if the government could step in and reclaim as much bandwidth as they need and broadcast whatever they need to broadcast to us. (im sure they will use satellite as well, but far from enough people have receivers).   It may be video. It may be maps localized to show us trouble spots. It may be information about utilities. It may be instructions on how to solve a problem caused by the cyber attack. Who knows. But i would rather be in a position where the bandwidth, and enough of it, was available for broadcast rather than reading how “shortsighted we were to sell off the bandwidth to wireless providers rather than consider how we could have used this broadcast bandwidth in a national or regional emergency”

I also know that once it happened twice (they would say the first time was a unique exception), then there would be a mandate to require that all new HDTVs and (possibly phones and future digital devices) to also be able to receive data from broadcast sources  and store it on internal and/or external storage  to be viewable on the tv , and potentially an executable file that provides support and help in the emergency.

The bottom line is whether or not there are applications that would benefit national security. I dont know, but i think we have to at least consider the possibility.

Of course this is all pie in the sky hypothetics. Maybe someone has already thought this side of it through. Maybe its ridiculous on its face. I dont know.

But maybe not.  I think there is a greater than zero chance that in the next 10 years  broadcast bandwidth can be of value to the country in an emergency. We need to at least consider this before we sell off the spectrum

17 thoughts on “Should the FCC Reclaim Broadcast Spectrum ?

  1. three little letters why the status quo will continue and why spectrum will NEVER be auctioned off… N A B.
    The NAB OWNS these politicians with lobbying, and outright fear of crossing them. A sane politician wouldn’t touch this with a ten foot pole.

    Comment by westex74 -

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  3. Technically, according to the various telecommunication acts, the FCC is not allowed to use dollar maximization as one of its tenants in auctioning off bandwith. As much as I like their cell service, Verizon is notorious for locking down their services.

    Also, according to those very same act, the FCC can reclaim any bandwith that is not being used in the best interest of the citizens. They have never done that without some type of compensation to those affected over the fear of private companies not investing infrastructure but if you look at AT&T, that is already a problem.

    I think the biggest success has come from opening bandwith up to public use. That little wifi router in your den would not be possible if they didn’t open up that spectrum to public use. It has also been a huge success because not one entity controls the spectrum, there is plenty of competition and with the various 802.11 protocols has come a long way.

    Comment by crfbusiness -

  4. Mark,

    I have admired not only your career but your advice on the blog and twitter for a long time. I could not agree more with your mentality competition and of experiencing as much as you possibly can when you are young.

    I wanted to let you know that I have been so inspired by your words that I have decided to take action and accomplish a personal life goal: to appear on Jeopardy. After unsuccessfully testing online and writing a poignant letter to the contestant selection email address, I have just launched a Fan Page on Facebook in order to prove that I can directly impact ratings by inviting me to compete on the show. Here is a link:

    I was wondering if you could offer any advice based on your experience with media and web 2.0 about how I can reach a greater audience and ultimately accomplish my goal?

    Best wishes,

    Comment by kingcraiger -

  5. Mark,

    I would like to know if the offer still stands for the “Open Source Funding?” I am aware that the post was closed in May. But I have only recently heard about your efforts from a UNT professor. Would it be appropriate to post my links hear for the idea? Thanks for your time.


    Michael Harris

    Comment by mychal6885 -

  6. Pingback: links for 2009-12-17 « 6 to cut, 4 to sharpen

  7. Mark, have you ever seriously considered running for President? I’m almost positive that you would be the best man for the job if the economy never recovers or they don’t tax the hell out of Wall Street.

    Comment by someoneelse12 -

  8. Mark:

    Please purchase the Houston Astros. This baseball team, “The Yankees of the South,” deserve an owner that wants to win championships just as passionately as it’s fans do. Drayton will sell, and you’ll turn this baseball city upside down. You’ll get your major league baseball team, and in Texas. Astros fans are the best on the planet. Roy Oswalt, Lance Berkman, Carlos Lee, Hunter Pence and Michael Bourn desperately need your help.


    Eric S. Leal
    Proud Houstonian

    PS: Go Rockets!

    Comment by astrotrane -

  9. Pingback: Should the FCC Reclaim Broadcast Spectrum ? | Mark Cuban | Voices | AllThingsD

  10. Mark, I agree with you and cheer you on 99% of the time.

    …but this is an instance where I have to disagree. Anything the government does is almost always a textbook monopoly. We joke about how “we the people” run it, but to be honest would be to admit that government became an oligarchy long ago.

    That said, how could a monopoly better serve everyone than the free market?

    Comment by Jeff Nabers -

  11. At some point the public will need to be educated about how to respond in case of a cyber attack. Imagine going a day without internet, phone, TV.

    There was an article I read about a woman who went on vacation and decided to leave her cell phone in the room the entire time. She couldn’t last a single day without wondering if something had happened and maybe someone was calling her, so she had to go back and check her phone. Of course there were no messages, but she was reserved to keeping the phone with her the rest of the trip.

    A limited example I admit, but imagine if an entire city went through this? Maybe chaos wouldn’t break out, but there would definately be a moment of hesitation.

    Comment by loucons -

  12. Mark – Are you talking about the FCC holding another sale of broadcast bandwidth? Because much of what you’re discussing has already happened

    Comment by uwskiguy -

  13. Great points, Mark, and good comments by BJDRAW.

    It does seem to me that the spectrum is something the government should really keep in its back pocket, “just in case”, rather than trying to squeeze every last dime out of this asset.

    Leaving things up to the market makes sense for many goods and services, but for something like this, as Mark points out, once it’s gone you can’t get it back.

    Comment by ithousecalls -

  14. By the way I’d be happy to be the first to go on record that a majority of FCC commissioners will become “consultants” for one of many of the companies that purchased the broadcast spectrum from the FCC after their term at the FCC concludes, this is were capitalism falls flat on its face.

    Comment by uwskiguy -

  15. I personally think it is absolutely retarded for our Government to SELL OUR BANDWIDTH to the highest bidder, instead it should have been leased with terms so that we, the people, can reclaim the bandwidth if A.) Company X goes out of business because of shitty decisions, B.) we need it for an emergency as you pointed out, C.) we’re able to capitalize upon it later WHEN it becomes more valuable through renegotiation of the lease.

    Now Verizon and others who purchased X.X mHz spectrum will be able to profit from increase in value over time instead of being controlled by the people who USED to own it.

    By the same logic we should auction off our National parks next.

    Comment by uwskiguy -

  16. Why do you assume that the market wouldn’t best decide how to use the spectrum? The best use would have the highest value, and consequently, the highest bid.

    Comment by kxmas -

  17. As a person who relies solely on OTA HD six months of the year, I think it makes sense to stop using the best spectrum for a service that only 10% of Americans rely on in favor of something that will benefit the majority.

    I don’t think selling it makes sense. Free use of the spectrum has served the public well for the past 60 years so why charge for it now? Any business considers its costs when determining the price of goods and services and so any amount a corporation pays to use the spectrum for public uses, will only be passed on. So it makes more sense to loan it to them with strings attached. If anything let the companies bid with openness etc for a free license to use the spectrum.

    This way more people could benefit from the spectrum while at the same time your concerns would be addressed.

    Comment by bjdraw -

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