Proposed Spectrum Auction Could Net $36 Billion, Study Finds
Last week President Obama outlined a plan to auction off a big swath of wireless spectrum currently in the hands of TV broadcasters for over-the-air programming that could be repurposed toward creating a national wireless broadband network. The president said the auctions would raise about $28 billion, which would be enough to cover the costs of the $19 billion network he’d like to build, with the remainder going toward deficit reduction.
Today the the CTIA, the wireless industry trade organization, got behind the president’s plan in a big way, and suggested that the proposed spectrum auctions could bring in billions of dollars more than the president said. Using data from 13 prior spectrum auctions as a model, the organization today released the findings of a study conducted in partnership with the Consumer Electronics Association saying that an auction of 120 MHz worth of spectrum could produce revenue in the range of $36 billion to $48 billion.
The study also found that only in the top 30 markets in the continental United States will TV stations actually have to exit certain spectrum ranges to clear up sufficient spectrum for wireless broadband. In most cases, TV broadcasters will probably be satisfied with incentive auctions that give them some portion of the proceeds raised from the auctions. In a few cases it will be trickier, and the study suggests a few options like channel-sharing and repacking. Broadcasters outside the top 30 markets should not have to give up any spectrum, the study says.
The point of the study, CTIA president Steve Largent told me, is to help nudge Congress toward passing a law that will allow the Federal Communications Commission to hold incentive auctions that can help spur TV broadcasters who currently have the licenses for the spectrum. So far, broadcasters have signaled that they’re not yet entirely willing to go along with this plan. “We think this can be relatively painless for the broadcasters, but it’s still going to take a lot of work at Congress and at the FCC to get it done,” Largent said.
That the wireless industry would be getting behind Obama’s plan is no surprise given their exploding spectrum needs for data services, so there is a bit of a grain-of-salt element to the study’s findings. However it’s also a solid signal that the wireless carriers are willing to bring serious cash to bear for spectrum, which is, generally speaking, good news for all concerned.
Broadcasters are understandably taking a cautious line. In a statement issued last week in response to Obama’s speech in Michigan, Dennis Wharton, executive vice president of the National Association of Broadcasters said, “Let’s not forget that broadcasters returned more than a quarter of TV station spectrum to the government less than two years ago, and that much of that spectrum has not yet been deployed. NAB is not against the President’s plan. We will work to ensure that incentive auctions remain truly voluntary, and that broadcasters who don’t volunteer to return spectrum–and the millions of viewers that we serve–are held harmless.”