Who Will Blink First Over TV Spectrum? Obama Administration Battles Broadcasters

[Commentary] The Obama Administration wants television stations to give up some of their spectrum so it can be redeployed to offer Internet services to smartphones, iPads, and other mobile devices. The White House considers broadband to be the new national medium. But it sees a crisis coming with too little spectrum available to accommodate the millions who want to use portable devices to stream videos, data, entertainment and everything else. So the administration wants to free up 300 megahertz over the next five years, and 500 mhz over the next decade, for wireless Internet. (A smartphone typically uses 24 times more spectrum than a conventional cell phone uses, while a tablet computer uses 122 times more spectrum.) Without more wireless broadband capacity, there could have a perfect storm of dropped calls, dead zones, slow speeds, and high prices. To help do that, Federal Communications Commissioner Chairman Genachowski is offering a deal to TV stations ranging from big-city network O&Os to tiny independents in places like Peoria. It goes like this: voluntarily give up your spectrum, and the government will share the proceeds when it auctions the airwaves to a wireless broadband company.

Sounds fair? Not to the National Association Of Broadcasters. The airwaves that the FCC wants TV stations to give up are worth at least $33 billion -- but that's according to a study in February that was supported by two lobbying groups that have a lot at stake in wireless broadband: the Consumer Electronics Association and the cellular phone industry’s CTIA. The NAB says the estimate is bogus because it makes too many big assumptions. Yet there’s no doubt that there's a lot of money to be had.

True, Chairman Genachowski hasn't hesitated to compromise in other controversies. But he told the NAB gathering last week that “the costs now of delaying voluntary incentive auctions would be severe.” The FCC has the legal authority to simply take broadcast spectrum if it decided that it would serve the public interest. But it needs NAB help to win congressional approval to offer stations a deal. The law requires all cash from spectrum auctions to go to the U.S. Treasury. People in the know tell me too many TV stations want the cash they could collect by going along with Genachowski's plan. The big question for them is how big a cut they'll receive from an auction.