FCC Chairman Genachowski Touts ‘Incentive Auction’ as Big Win from Broadcasting to Wireless Broadband

LAS VEGAS, January 9, 2013 – When President Obama came to office nearly four years ago, the transition to digital television hadn’t yet been completed.

Now, airwaves once used by broadcasters have been cleared for use by wireless companies. And the Federal Communications Commission is going forward on the next stage of this transition. The agency is pushing broadcasters into a narrower and narrower portion of electromagnetic spectrum.

In other words, broadcasters will no longer rule the air with exclusive access to the mother-lode of spectrum they once controlled.

The man most responsible for this transition is Obama’s FCC Chairman Julius Genachowski, who came to the Consumer Electronics Show here Wednesday and received the accolade as the “spectrum chairman” by Consumer Electronics Association President Gary Shapiro.

Genachowski, sitting down in a question-and-answer with Shapiro here, said the agency was able to accomplish one-two punch against television broadcasters’ extensive spectrum holdings by building an “incentive auction” into the National Broadband Plan.

More broadly, Genachowski said, “we did a broadband plan that treated wired and wireless broadband as [both] really important.”

Coming into the National Broadband Plan in 2009 and 2010, “everyone assumed that a broadband plan was a wired broadband plan,” he said. “A lot of the future is about wireless broadband.”

The FCC issued the National Broadband Plan in March 2010 as a result of the American Recovery and Reinvestment Act, legislation passed within one month of Obama’s taking office. The National Broadband Plan’s elevation of the concept of an incentive auction took a once-fanciful notion into the political mainstream.

The basic notion of the incentive auction — which the FCC plans to conduct  by 2014 — is that television broadcasters put the airwaves they currently use into a pool from which wireless broadband companies will bid.

The agency has a mandate from Congress to raise at least $24 billion from this incentive auction. Under that mandate, about $7 billion will be used to pay for a public safety wireless network, and about $3 billion to pay broadcasters to vacate their airwaves. The remainder will help raise money for the federal treasury.

Managing such an incentive auction, which has never been done before, is likely to consume considerable attention and energy on the part of the agency.

The push for the incentive auction has been amplified by a mounting spectrum crunch for wireless devices, said Genachowski. Looking back four years, Apple’s iPad hadn’t even been introduced. Tablets were not the mass-market phenomenon that they are today, with sales this year set to exceed computers. Also, smart phones were just taking off when Genachowski became agency chairman in 2009.

One significant by-product of the push to pack the broadcasters into a narrower and narrower space on the radio-frequency dial has been to focus the agency’s attention on licensed spectrum more than on unlicensed wireless uses.

Genachowski came to the show here with some news of his own: the agency will soon kick-off a government-wide effort to increase speeds and alleviate Wi-Fi congestion at major hubs, such as airports, convention centers and large conference gatherings. The initiative will free up unlicensed spectrum in the 5 Gigahertz band. Genachowski said this would enable Wi-Fi speed increases by up to 35 percent.

During another session here on Wednesday, a panel including Nebraska Republican Rep. Lee Terry, a wireless provider, a broadcast industry representative, and other attorneys and analysts, it became clear that sorting out the issues behind an incentive auction won’t be easy.

Rep. Terry said that “the reality is that young people don’t want wires. It is all about mobility.” Terry said that our society can’t enable to use of these wireless devices without more access to spectrum.

Many expect that the 2014 date for the incentive auction is overly ambitious. But on another panel here on Wednesday, FCC Commissioner Mignon Clyburn said that “yes, [the schedule] is aggressive, but there are a lot of motivated bodies” to get the auction done by 2014.

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