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Encouraging Broadcasters to Sell Their Airwaves

What happens to a voluntary spectrum auction if no company wants to sell its airwaves?

That question has no doubt resulted in some late nights this year at the Federal Communications Commission, which is tasked with planning and executing the “reverse” auction of spectrum scheduled for 2014. The undertaking relies on inducing television broadcasters to relinquish their airwaves for payment, then turning around and auctioning that spectrum to wireless carriers for mobile broadband use.

For many wireless carriers, the auction is a rare opportunity to get their hands on choice “beachfront” spectrum in the 600 megahertz band, which should be ideal for the deployment of next-generation mobile broadband networks. There is, however, one caveat: Enough broadcasters have to agree to take the money and either go off the air or have their station repacked into another channel.

Rep. Anna G. Eshoo, D-Calif., said the FCC needs to do a better job of educating the broadcasters so they understand what’s at stake in the auction and how they can participate.

“No one is going to take advantage of something if they aren’t advantaged by it — i.e., money,” Eshoo said. “I’ve heard from small broadcasters that they are still in the dark. They need to understand the benefits. Really, without broadcaster participation, there won’t be any new spectrum to repurpose.”

Then there’s the question of which stations will choose to participate. Few expect stations owned or affiliated with the Big Four networks (ABC, CBS, NBC, Fox) to go off the air, especially given the scarcity of spectrum and its rising value. Among those more likely to participate are broadcasters that are currently struggling to pay their bills, including stations serving rural, religious and ethnic audiences. That could raise hackles in Congress, where each of those groups has a strong voice.

Another question surrounding the auction is when, exactly, it will happen. Already, a few insiders at the FCC have acknowledged that scheduling it for next year might prove too ambitious, especially with the agency hamstrung first by the sequester and then by the government shutdown. With one spectrum auction already on the books for next year, pulling off the convoluted reverse auction procedure may be asking for too much from an agency already strapped for resources.

Of course, consumer demand for mobile video and data is not decreasing, and wireless networks are only getting busier with every passing day. And even after wireless companies purchase more spectrum at auction, it can take years before they can start deploying their networks on it — which means regardless of when the reverse auction takes place, it will already be too late for some consumers.

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