Telecommunications: In High Definition
Even as the World Goes Mobile, Broadcasters Voices Stay Strong
For more than a year, the Federal Communications Commission has been warning that the country will not be able to reap all the potential rewards of the smartphone revolution unless the providers of Internet service get to buy access from the government to much more of the broadcast spectrum — and fast. Already, their networks are starting to buckle under the rapidly escalating volume of video, audio and other dense files of data. To help solve the burgeoning bandwidth problem, among the airwaves the agency has in mind are the ones currently occupied by television broadcasters.
The commission is trying to entice the broadcasters to surrender their federal licenses voluntarily, by promising to give them a portion of the subsequent auction proceeds. But in order to do that, the FCC first needs Congress to give the agency what’s known in the technology world as “incentive auction” authority.
The TV networks and the owners of their local affiliates are extremely wary of the idea, because they worry that the as-yet-unspecified details could end up taking millions of dollars out of their pockets. And so until all the fine print is written, they are working to repel any bill that might weaken their hold on the slices of megahertz that have been their invisible and inaudible home turf for more than half a century. And so the broadcasters are playing an aggressive and multifaceted game of defense this year — against not only the FCC but also the ballooning handheld-device industry and a bevy of technology companies that see their futures in a rapidly expanding wireless world.
Few people get their TV signals over the air anymore — according to one recent estimate, only about 15 percent of viewers watch their shows the old-fashioned way — but broadcasters still enjoy substantial bipartisan support on Capitol Hill. Television stations are still major local economic forces in every congressional district, and TV advertising is still an essential ingredient in every political campaign.
Those factors combine to make the industry’s trade group, the National Association of Broadcasters, a powerful lobbying force in Washington — and on Capitol Hill especially. And NAB’s clout appears to have been enhanced by its current leader, Gordon Smith, a leading Republican centrist who represented Oregon in the Senate for a dozen years (and rose to a senior seat on the Commerce Committee) before being defeated in 2008. Since joining NAB the next year, he has traded easily on his long-standing relationships with plenty of influential Republicans and Democrats in both the House and the Senate — starting with the three of his cousins who are senators, Democrats Tom Udall of New Mexico and Mark Udall of Colorado, and Republican Mike Lee of Utah.
Aides say Smith’s influence has helped the broadcasters successfully tamp down any thought of requiring the television stations to give back their spectrum licenses. So, too, has the Republican takeover of the House. While an incentive-auction plan has stirred some interest in the Senate, in the House the GOP majority of the House Energy and Commerce Committee began focusing on the issue publicly only in April. That slower pace has afforded broadcasters time to shore up support for their position and make doubly sure any spectrum legislation contains language that will protect their interests.
A Wireless World
Meanwhile, wireless providers and other tech companies are clamoring for more spectrum for mobile Internet users, mainly to handle the exploding amount of video traffic on wireless networks. “The long-term benefits to the economy as a whole and to the American people of making more spectrum available for mobile broadband cannot be overstated,” several companies, including AT&T Inc., Verizon Wireless, Apple Inc. and Nokia Inc., wrote to several top lawmakers last month.
The carriers pushing for the spectrum legislation also have hired various lobbying firms to help make their case. T-Mobile USA Inc. has retained Crowell Strategies, which was started by former FCC and Capitol Hill aide Colin Crowell after he left the commission last year. AT&T has retained the powerhouse firm Akin Gump Strauss Hauer & Feld. The TeleMedia Policy Corp. is lobbying the issue on behalf of U.S. Cellular.
“This is really not a fight as much as it is an effort to try to find a solution that will allow spectrum to be paid for by people who may have a higher use for it,” said Jot Carpenter, vice president of government affairs at CTIA, the wireless industry trade group.
But from its headquarters fortress near Dupont Circle, NAB has fought back hard. Besides its own in-house team, NAB has hired Wiley Rein, the lobby and law firm founded by former FCC Chairman Richard E. Wiley. “I think it’s clear we are outgunned four or five to one in terms of lobbying power,” Smith said. “But I think the power of our argument about the enduring power of broadcasting resonates.”
Smith argues that broadcast programming is still popular, and television stations are still important community resources — ones that have proven to be more resilient than wireless networks after natural disasters such as hurricanes and tornadoes.
The broadcasters say that their “one to many” model of transmitting information to viewers is at least as deserving of spectrum space as the wireless companies’ “one to one” model of transmitting videos and data to individual users. Smith also doesn’t hesitate to point out that the shows broadcast over the air are generally more wholesome than the standard fare on the Internet.
“If you apply decency standards to wireless broadband, you’ll collapse their business model,” Smith said. “We’re not in the indecency business. On broadcast news, you’ll only find clothed pictures of congressmen.”
And broadcasters never miss a chance to remind lawmakers that they turned over a big chunk of their share of the airwaves only two years ago, because of the congressionally mandated switch from analog to digital broadcasting. The TV industry argues that no station should be forced to give up its license, and that stations choosing to do so should be allowed to set the minimum asking price in a subsequent auction.
The broadcasters are especially worried about how remaining television stations will be treated in a “repacking” of the spectrum that would inevitably be necessary to open bigger slices of spectrum for auction. They say the stations that choose to hang on to their spectrum licenses shouldn’t be moved into technologically less desirable frequencies.
Smith is fond of reminding lawmakers of the symbiotic relationship they have with their local television stations, especially at election time. He says he asks lawmakers where they spend their advertising dollars when they want to make sure voters see the ads, “and the light goes on and they say ‘broadcast television,’ ” Smith said.
House Energy and Commerce spent the early weeks of this year berating the FCC for its new rules on “network neutrality” rather than concentrating on spectrum issues. The Senate has jumped ahead with a broad bill endorsed by the Commerce Committee two weeks ago.
Top Republicans on the House panel differ with their Senate counterparts on one central question: whether to hand over a slice of unused spectrum to public safety officials to help them build a nationwide communications network that could be shared by the nation’s police, firefighters and other first-responders. The Senate bill would do so, but the House seems dead-set against going along.
Broadcasters’ House Ally
Smith’s former colleague in the Oregon congressional delegation, Greg Walden, has become chairman this year of the House Energy and Commerce Subcommittee on Communications. A rising star in the Republican caucus — he’s likely to chair the House campaign operation for 2014 — who began his career as a radio broadcaster and went on to own five radio stations, Walden is perhaps NAB’s most important single congressional ally. (He and Smith served in the state legislature together before serving together in Congress, and Smith still has a home in Walden’s congressional district.)
“Wireless is not the sole venue for innovation,” Walden said at a hearing three weeks ago. “Over-the-air broadcasting remains a vital and important part of the communications infrastructure.”
There is still more than a year to go before this Congress is over, but for now the odds seem solid that the broadcasters will get what they want — and that’s in large measure because the incentive-auction proposal will only move as part of a larger telecommunications bill, and that bill won’t get done unless the standoff is broken over the public safety spectrum. So if Walden keeps resisting the Senate’s entreaties on that score, his recalcitrance will have the added benefit of helping the broadcasters.
Although Senate Commerce Chairman Jay Rockefeller wants to get his bill on the floor before the 10th anniversary of the Sept. 11 terrorist attacks, broadcasters want language added that would insulate them in the big spectrum shuffle that would ensue. For example, NAB wants lawmakers to sunset the incentive-auction authority that the legislation would grant to the FCC.
Between NAB’s own clout and the Republicans’ control of the House, it’s a safe bet that no spectrum bill that’s not to the broadcasters’ liking will be enacted any time soon.