While the 8K Super Hi-Vision television demonstration with 22.1 channel surround sound was a standout on the NAB 2013 show floor, there were some other standouts as well. Particularly the participation of Wireless and Cable Operators on panels discussing their different view points as to how the spectrum auction should proceed.
The panel, Incentive Auctions of TV Spectrum – How and When They Will Impact Your Business, featured a lively discussion from auction stakeholders across the board: Maggie Reardon, Senior Writer CNET; David Don, Senior Director of Public Policy with Comcast; Gary Epstein, Senior FCC Advisor and Co-Lead Incentive Auction Task Force; Kathleen Ham, Vice President Federal Regulatory Affairs at T-Mobile; Rick Kaplan, Founder Kaplan Media Partners (formerly with CNN, CBS, ABC, MSNBC); Joan Marsh, Vice President of Federal Regulatory Affairs for AT&T.
The resounding call from all participants was to maximize participation, though there were different perceptions as to how that could be achieved. Although there are different priorities for the band plan, it seems that most parties agree that competition is key through clear rules that are attractive enough to raise the funds necessary to move broadcasters to a new locations.
It was basically agreed that 84Mhz is what would end up becoming available, and that that was enough to go around as long as the plan is managed appropriately. Repacking of spectrum doesn’t happen very often and it’s important to put together enough blocks of spectrum without neighboring interference that have the appropriate flexibility for downlinks and uplinks.
Panelists were all given the opportunity to voice their honest opinions as to how they view a successful auction. Even though, wireless and cable participants joked that this was probably the first and last time they would be invited to NAB, the conversation was pleasant and highly informative.
Kaplan made it clear that the FCC has been given a lot of authority in this auction, and its job is to make it as easy to participate as possible by making rules clear, so broadcasters can decide based on the market whether to participate or not – whether it is in their financial interest to vacate all some or none of their spectrum holdings. This will help maximize revenue and raise money that congress wants to raise.
Other participants emphasized that an important part of maximizing revenue is creating a band plan that’s also attractive enough for wireless carriers and others to participate. That means enough bands to go around, which will not include the 120MHz initially announced, but will more likely be around 84MHz. Plus it is important to note that bands are not as valuable if they are not paired with an up link and downlink. This would result in diminishing returns that only hurt the broadcast industry
Comcast is vying for 20MHz in the 600 Mhz band dedicated to unlicensed spectrum in order to continue building out the nations largest WiFi network composed of over 100,000 hotspots. Don notes that WiFi off loading is a key service provided to cellular networks, which use WiFi as an alternative to always streaming data directly from the cellular network.
However, T-Mobile and AT&T representatives fired back that Comcast just sold off swath of licensed AWS spectrum, if Comcast wants a WiFi network they should buy licensed spectrum for those purposes. There aren’t many placed to get licensed spectrum, which brought LTE to the market. They argued unlicensed spectrum ends up being free spectrum, and does not promote participation of the broadcasters because there need to be funds to pay for the clearing of the broadcasters.
T-Mobile and AT&T expressed disagreement as to maximizing wireless participation. T-Mobile wants more low band spectrum and advocates for a 1/3 screen on the major wireless holders of low band spectrum – namely AT&T and Verizon. Ham noted that in the PCS auctions of 1993 and 1994 imposed limits on dominant providers, so that no one participant could purchase all of the spectrum available, and increased competition resulted at the auction.
When speaking about access to different types of bands, Marsh noted that a wide band of spectrum is just as important as where the band is placed, a dense network is important. All carriers are rolling out products based on their portfolio and from her perspective the need for having a mix of both low and high band spectrum is over stated.
Marsh also said that during the 700MHz band T-Mobile did not participate in that opportunity for low band spectrum, and that the auction functioned well without a spectrum screen. AT&T lost a bid on a desired national swath of spectrum, so arguments that the presence of the dominant providers would scale back the number of auction participants is unfounded.
The Public safety network was often mentioned: the importance of WiFi hotspots for interoperable communications standards, and the use of broadcast and radio to keep folks informed. Still, the revenue must be there for the build out some estimates from the Obama Administration are around 7.2 billion …
From Digital Liberty’s perspective thus far, a solid band plan would address interference issues, offer paired spectrum blocks with opportunities for 5×5, 10×10 and 20×20 as appropriate, and allow increased license flexibility. While unlicensed space is useful, it needs to be further determined whether guard bands can serve this purpose or if a full contiguous block of spectrum is really required for unlicensed users in the same way licensed users prefer contiguous blocks. We cannot end up with more situations where a company purchases a block of spectrum that cannot be used because it is unpaired and has too much interference.
In order to achieve a band plan of this nature, broadcasters need certainty. They need to know when the transition will occur, they need to know broadcasters who choose not to participate will maintain their current coverage areas and be compensated for switching costs. This kind of certainty encourages participation from all parties, which is vital to raising enough money to adequately compensate broadcasters, provide funds for a public safety network, pay off money advanced to the FCC for designing the process, and contribute revenue back to the treasury. All in all saving taxpayer dollars!
To reach these lofty financial goals, participation is indeed key. More small players doesn’t necessarily mean more dollars, it could mean more failed ventures that end up costing more than they are worth overall. Especially when talking about companies who receive federal loans or small business rankings in order to bid. With the prevalence of secondary spectrum sales from auction winners who have been unable to develop their spectrum assets, it seems that blocking two of the largest players with clear ability to maximize any spectrum assets purchased and provide immense value to consumers nation wide, would be a bad call.
Fox and Univision suggested exiting the over-the-air (OTA) model to a paid subscription model, after a federal appeals court rejected the injunction against Aereo transmitting OTA signals. Aereo picks up free TV station signals in New York and sends broadcasts to consumers on a subscription basis via an array of tiny antennas. While OTA television is free, Aereo charges a subscription fee. Also cable and satellite distributors are required to pay retransmission fees of OTA signals, but Aereo is not paying these fees while providing the service on the basis of a personal antennae structure.
Commissioner Pai’s dedication to improving the AM radio bands is no secret, and he spoke about how he believes radio is an important part of the communications mix especially when facing a national disaster.
In keeping with Congressman Greg Walden’s fight against Net Neutrality, he noted that the FCC was “more concerned lately with expanding its authority than working with us to embed better practices.” In addition, Rep. Walden particularity focused on lack of responsiveness to business, especially when it comes to shot clocks. He drew on his own experiences as filing a petition in 2003 for station translators, sold his station in 2007 and did not hear a response to his petition until this year – to which the FCC wanted a response from him in 30 days.
There’s an ap for that! The NAB 2013 app was very useful for navigating the floors and keeping track of events.
Commissioner Pai highlighted needs to relax newspaper broadcaster cross ownership rules, saying with the decline in newspaper revenues it is important to draw more investment into the industry. However, Commissioner Rosenworcel remained more reserved in relaxing those rules and focused more on diversity of networks and ownership.
The Super High Definition 8K demonstration with 22.1-channel surround sound was an experience; fully immersive sound and pictures so clear they had a 3D feel. In fact, the picture doesn’t deteriorate as you get closer to the screen – it stays just as crisp and clear – no need to sit in the back row!
Verizon CEO Lowell McAdam’s conversation with NAB CEO Gordon Smith, acknowledged the importance of wireless broadband for their services and their foray in to new complementary streaming services, such as streaming the Super Bowl (aka Big Game) to mobile devices via new technology making the service faster and more reliable. With the concession that most folks prefer games on the TV, McAdam views their current mobile TV offerings as complementary. McAdam also noted that it wouldn’t be fair for the FCC to tell Broadcasters they only get up to a certain amount from the auctions, in the same way that the FCC shouldn’t keep Verizon and AT&T limited in their auction capability.