700 MHz auction may be delayed again

(Telephony) A request from Verizon Wireless and an FCC decision allowing cable companies to carry analog-only signals may conspire to delay the scheduled March 6 auction for 700 MHz spectrum, which many industry observers believe to be prime airwaves for high-speed wireless offerings.

A postponement would not be new for the 700 MHz auction. The auction already has been delayed several times during the last two years as regulatory officials and lawmakers seek to ensure that winning bidders for the 30 MHz of spectrum will be able to use the bandwidth in a timely manner.

Currently, about 150 broadcasters of television channels 60 through 69--primarily UHF stations--utilize the spectrum. In giving the broadcasters bandwidth for digital television (DTV) signals four years ago, Congress ordered broadcasters to vacate the 700 MHz spectrum by 2006 with one important caveat—the broadcasters do not have to move unless 85% of the televisions in the stations’ territory can receive DTV signals.

Former FCC Chairman William Kennard criticized this stipulation last fall, predicting that DTV would not reach the 85% threshold until 2025.

Meanwhile, broadcasters contend that consumers have no reason to buy DTV-ready sets if cable operators are not required to carry the digital signals. In fact, broadcasters want cable companies to carry both types of signals during the transition from analog to digital so they do not risk losing a portion of their audience.

In a vote last week that was not announced until Monday, the FCC decided not to mandate such “dual must-carry” rules. In addition, the commission decided it would not take any other actions to mandate clearance of the 700 MHz spectrum, instead opting for “voluntary” procedures.

“The FCC concludes that it is not necessary or appropriate at this time to adopt cost-sharing rules, cost caps, or cost recovery guidelines to assist in clearing the 700 MHz band, and leaves cost-sharing arrangements to voluntary negotiations among new wireless licensees,” the FCC majority opinion states.

Noting the burden that would have been placed on cable operators had the FCC required carriage of analog and digital signals, NCTA President and CEO Robert Sachs expressed support for the FCC’s decision.

“The winners here are consumers, who will enjoy greater program diversity on cable instead of duplication of the same broadcast channels," Sachs said in a prepared statement.

While expressing disappointment in the decision, National Association of Broadcasters President and CEO Edward O. Fritts said “this fight is far from over.”

“Local broadcasters are committed to delivering an array of innovative and creative services--including HDTV--free to American consumers through use of digital spectrum,” Fritts said in a prepared statement. “It is equally apparent that the cable monopoly will continue using its gatekeeper role to block these services.

“We strongly believe there is a Congressional mandate for cable carriage of analog and digital broadcast signals. We welcome the opportunity to make our case before a new FCC and a new Congress.”

Separately, Verizon Wireless asked the FCC to postpone the auction because the ongoing C- and F-block reauction has taken so long that the company will not have time to assess its needs and prepare for an auction that begins in early March. Verizon Wireless asked that the 700 MHz auction be delayed at least two months, indicating that it prefers that bidding begin on Sept. 6.