Spectrum: Public trust or cash cow?

Perhaps the most interesting aspect of FCC Chairman Julius Genachowski’s recent call to identify 500 MHz of new spectrum for mobile broadband was his proposal to “buy back” licenses from the TV broadcasters. That implies that broadcasters own those licenses in the first place or even paid for them. Like any other radio frequency license, broadcast licenses are owned by the people and held in public trust by the licensees. TV broadcasters received their original licenses for free. With very few exceptions, those licenses are renewed automatically. And in the age of blockbuster spectrum auctions, they each received gratis new digital TV licenses in exchange for their analog spectrum, which allowed them to broadcast more channels in higher quality (though to be fair they were forced to spend billions on upgrading their infrastructure). My question is what exactly are we compensating them for?

Is it the public service they provide? As part of their covenant with the people, broadcasters have to provide a certain amount of educational and public interest programming. In my mind, airing the presidential debates every four years, a few public service announcements featuring B-list celebrities and the schlock that’s called the local news are pretty poor tradeoffs.

Wireless operators paid billions of dollars for their spectrum, and though they face fewer restrictions on how they use their licenses — they can charge for service, for one thing — regulation on the wireless industry is increasing. There’s a growing expectation that broadband in both its fixed and mobile forms should be readily available to every American. There is increasing pressure on the FCC to mandate open networks. And the growing movement of net neutrality is affecting wireless as much as it is wireline.

The current system of wireless auctions was designed to apply free market principles to the allocation of public spectrum — through private self interest a competitive market would find the most efficient way of utilizing a public asset. After spending billions acquiring said spectrum though, it would be unreasonable to expect those operators not to act in their own self interests by resisting regulation or competitive limitation.

I’m not calling for the FCC to strip broadcasters of their airwaves and hand them over to the operators. Nor am I advocating a world of closed wireless networks and walled gardens where operators act as broadband gatekeepers. But I think the FCC, Congress and the president need to decide how they view our nation’s wireless spectrum: Is it a public asset they must ensure is used for the overall good, or is it commercial asset they can sell off for extra revenue? They can’t have it both ways. It’s two-faced for the government to profit enormously on spectrum auctions and then regulate it as public service. To use those proceeds to compensate a broadcast industry for spectrum it never owned or paid for is downright hypocritical.