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  • Patrick McFadden 11:05 am on February 27, 2017 Permalink  

    Radio Silence 

    Relocating television stations to new channels following the close of the TV broadcast spectrum incentive auction will be the most complex transition the Federal Communications Commission has ever overseen. We know that many stations will be repacked, we know that there are constraints on the resources available to perform this work, and we know there are hugely complex interference relationships between broadcast television stations.

    But we don’t yet have a full picture as to which stations will be moving to new channels, and what the ramifications of those moves will be. For example, many towers that are home to repacked television stations are also home to FM radio stations, which are not being repacked.

    During the incentive auction rulemaking, NAB and others asked the Commission to allow repacked television stations to reimburse other broadcasters, including FM stations located near repacked television stations, for costs those stations might incur during the repack. It seems reasonable to us that, if an FM station, an innocent bystander to the repack, needs to construct alternative facilities to stay on the air during repacking work performed on a nearby television station, this should be considered a reasonable expense associated with the repack. The FCC disagreed, citing the language of the legislation authorizing the incentive auction.

    Regardless, those FM stations and their millions of listeners are still there. They still face the real possibility that repacking may disrupt their operations, even though they have literally nothing to do with the incentive auction. Work on nearby television antennas may require FM stations to reduce power, or seek alternate facilities. A repacking plan that does not take FM stations into consideration risks depriving listeners of local radio on which they rely. The right answer is to coordinate repacking efforts to minimize disruption, while also reimbursing bystander stations for costs they incur to maintain service – not to make them collateral damage.

    Over the coming months, the scope of work for the repack will become increasingly clear. The FCC has already informed television stations, confidentially, of their new channel assignments, and in April we expect the FCC to release this information publicly, providing a more definite understanding of the post-auction landscape. A balanced, reasonable repacking plan will treat all stakeholders fairly, including all affected broadcast stations, whether they are repacked or not.

     
  • alisonneplokh 12:03 pm on February 13, 2017 Permalink  

    An Innovative Process for an Innovative Proceeding 

    Next Generation TV is all about finding new and innovative ways for broadcasters to reach the public. That’s why we think it’s very fitting that one of the proceedings Federal Communications Commission (FCC) Chairman Ajit Pai picked to pilot the FCC’s innovative approach to transparency is a proposal to move forward with Next Generation TV.

    This idea, first championed by Commissioner Michael O’Rielly, dramatically increases transparency in the Commission’s processes. It has always been the case that interested stakeholders in Washington can speak to staff in the commissioners’ offices to get a good sense of what is in an item on circulation. But, as they say, the devil is in the details. Frequently, those of us subject to the Commission’s rules can accept or even welcome the policy goal being advanced in an item, but complying with the specific rule as written by staff would be unnecessarily complex or burdensome. Without seeing the specific proposal before the Commission, stakeholders could only comment on broad outlines of a proposal.

    I also know how helpful this approach can be for Commission staff. As a former Commission staffer, I often longed for feedback from stakeholders on the feasibility of the rules we were preparing to adopt. Unfortunately, because my colleagues could not share the text of the item publicly, we were limited in our ability to get that feedback. Chairman Pai’s innovation changes that, allowing stakeholders to provide more helpful input and allowing Commission staff to ask more specific questions.

    Process reform like this can lead to tangible benefits down the road. When the Commission operates in the dark, it risks making avoidable mistakes that lead to petitions for reconsideration or litigation. This ties up Commission resources and is expensive and time consuming for industry and public interest groups alike. We’d much prefer the Commission get it right the first time, and increased transparency helps make that more likely.

    Of course, NAB doesn’t support every word of the draft Notice of Proposed Rulemaking. If we did, it would be hard to see a reason to support publishing a preview anyway. For example, the draft asks a lot of questions about a tuner mandate, something we and our co-petitioners agree would be counter-productive to the goal of a market-based transition. Additionally, the draft devotes a lot of space to retransmission consent arguments that have no bearing on enabling innovation in broadcast services, other than to stifle them. However, the opportunity to see the item before the Commission adopts it gives us a chance to provide thoughtful feedback and help the Commission frame the debate.

    We are thankful that we have had an opportunity to review the proposed rules before they are voted on to help ensure that the Commission’s proposals and questions make sense, and are even more excited about the prospect of having the same opportunity for draft Commission orders in the future. We applaud Commissioner O’Rielly for championing this approach and Chairman Pai for having the courage to implement it. We strongly believe the pilot will be a success.

     
  • christopherornelas 10:34 am on January 12, 2017 Permalink  

    Norway Not a Trendsetter for FM Radio 

    What’s not to like about Norway?

    Great ski slopes. Magical fjords. Ridiculously low crime rate. And, according to a 2013 United Nations report, #2 among the “Happiest Countries in the World” – aced out only by Denmark.

    But the Norwegian parliament’s forced turn-off of many FM analog radio stations in favor of digital audio broadcasting (DAB) – which began this week – is causing not just static, but outright anger. Oslo opinion polls indicate 66 percent of Norwegians oppose the shutdown, with only 17 percent in favor. The angst stems from the fact that the shutdown could leave tens of thousands of people without access to some of their favorite free and local radio stations.

    “We are simply not ready for this,” Ib Thomsen, a member of the Norwegian parliament told Reuters. “There are 2 million cars on Norwegian roads that don’t have DAB receivers. Millions of radios will stop working. So there is definitely a safety concern,” he said.

    In reality, not all of Norway’s analog radio stations are being phased off the air – it’s only the country’s “national” stations that will go dark. That means the five major radio services distributed over a network of FM transmitters across the country that reach close to 100 percent coverage of Norway’s citizens will all be shut down by the end of the year. These include three state-provided noncommercial services and two commercial services, all of which are being replaced by digital radio channels that have been simulcast with the FM network for the past several years.

    But over 200 independent, local FM stations across Norway will remain on air for at least the next five years, and could now enjoy a boost in listenership. (Whether these stations stick around on the FM dial after 2022 will be decided later.)

    Could It Happen Here?

    The Great Oslo Radio Experiment has prompted a smattering of press reports suggesting that America may eventually follow suit. So, pun intended, is Norway the tip of the iceberg?

    The answer: No. No. A thousand times – No.

    In fact, for American radio, this development is much ado about nothing. The difference between Norway radio and American radio is as stark as the Northern Lights versus fireworks on the Capitol Mall on the Fourth of July.

    Here’s why:

    • Norway has 5 million radio listeners; there are 268 million listeners in the U.S. every week;
    • Many of Norway’s radio stations are state-owned; in the U.S., commercial radio listening dominates the charts in most places.
    • Norway is converting to digital radio using a completely different technology than we are in the U.S.

    That last bullet point is especially important. Norway (along with much of the rest of Europe) long ago adopted a digital radio transition plan completely at odds with the plan adopted in the U.S.

    Norway requires two separate swaths of spectrum for radio – one for its FM stations and another for its digital radio channels. It costs the government (and broadcasters) extra money to run both services to deliver the same content. Turning off analog FM is apparently seen by the Norwegian parliament as a cost-saving efficiency – even though actual radio listeners in Norway are quite unhappy about losing this service.

    By contrast, we in the U.S. chose a different path to digital radio. Our system, “in-band, on channel digital” – better known now as HD Radio – uses identical spectrum and the same channels for both analog and digital services. Thus, there’s no cost-saving advantage to shutting down analog FM services in America. More than 2,300 radio stations in the U.S. have converted to HD Radio, which improves the radio listening experience and affords American radio stations a remarkable array of advanced capabilities.

    HD Radio’s growth is most apparent in the automobile. All 36 auto brands available in North America and more than 200 vehicle models, including 34 new model year 2017 cars, now have an installed HD Radio tuner, and the number grows every year.

    Bottom line: No way will America go Norway’s route and “turn off” FM radio. It’s just not going to happen, in my lifetime or yours.

     
  • alisonneplokh 9:55 am on January 6, 2017 Permalink  

    Google and Microsoft Continue Pushing Plan to Seize Channels That Actually Aren’t Vacant 

    As the broadcast TV spectrum incentive auction inches closer to its conclusion, Google’s so-called “vacant channel” (although more properly known as “Google channel”) proposal has once again crept out of the shadows. The proposal, for those who may have let this debacle fade from their memories, is that before thousands of low-power television stations and TV translators (we’ll just say LPTVs for simplicity) displaced by the incentive auction are allowed to find new channels to continue serving viewers, they must ensure there would be at least one channel available for unlicensed – or Google’s free – use. This time, the Open Technology Institute (OTI), Microsoft and Public Knowledge are carrying Google’s water. Perhaps inspired by the fall broadcast television lineup, Google and Microsoft are angling for “Designated Survivor” status.

    “Don’t worry,” they say, “our Google channel proposal won’t actually take LPTV stations off the air, as there is plenty of spectrum to go around. And besides, what is more important, television or internet?” Let’s unpack that argument a little.

    Plenty of spectrum to go around? If that were actually true, Google and Microsoft wouldn’t need a policy change; they could simply use the available space under the FCC’s existing TV white spaces rules. They know, however, that the incentive auction will send many LPTVs scrambling for new homes and that some markets are going to have such scarce spectrum availability that, even without finding homes for all of the LPTV stations, there will not be enough room for unlicensed operation in the TV band. To try to get around this unfortunate reality, in March, Google submitted a heavily flawed study that assumed the FCC would need to buy nearly twice as many stations as it must in reality to reach a conclusion that the impact would be minimal. Sure, if the government spends extra tens of billions of dollars to purchase spectrum, Google and Microsoft could get access to a little more “free” spectrum. And, of course, Google is conspicuously not bidding in the auction, either. Again, if Google was right – that its was a cost-free proposal – then what would be the point? Unlicensed devices can operate in the TV bands already where space is available. The Google channel proposal is really about turning away existing LPTV stations to make room for unlicensed Google devices.

    Which is more important? Usually that’s not even a question when you are addressing whether an unlicensed service should disrupt an incumbent licensed service, but okay, we’ll bite. Let’s first remember that, in 2008, Google promised “Wi-Fi on steroids” by the 2009 holiday season. Now having just concluded the 2016 holiday season, there are still fewer than 700 unlicensed devices operating in the TV bands, nationwide. Total. The TV white spaces rules have been in effect for nearly a decade, there are plenty of channels available and three times as many people bought the now-discontinued $10,000 18 karat gold Apple Watch than have bought TV white spaces devices.

    In contrast, there are hundreds of thousands of viewers relying on the signals of thousands of LPTV stations. For many people, LPTV is the sole source of televised news and entertainment. While unlicensed devices have others neighborhoods – 2.4 GHz, 5.8 GHz, now 3.5 GHz – the spectrum at issue is television’s only home.

    Also, we can’t help but point out that because the “open” in Open Technology Institute apparently only refers to their level of disregard for television viewers throughout the country, OTI did not file in the dockets dedicated to the issues they have raised. The filing also includes references to discussions about eliminating critical protections for licensed operation in the TV bands and a flimsy dismissal of NAB’s analysis of errors in the white spaces databases on the basis that the nearly non-existent deployment of TV white spaces devices has not yet caused harmful interference. These are open issues in two separate dockets in which OTI failed to file.

    Now we are beginning to see why Oxford Dictionary labeled “post-truth” as the 2016 international word of the year. Hopefully, 2017 can be the year when truth doesn’t mean a lie, open doesn’t mean concealed from the public and unlicensed doesn’t mean kicking off licensed services upon which the public heavily relies.

     
  • Patrick McFadden 11:12 am on December 9, 2016 Permalink  

    ATVA’s New Trick: Slow Rolling Next Generation TV 

    The American Television Alliance (ATVA), one of the leading voices of the pay-TV industry, has a big problem. Up until now, ATVA’s primary raison d’être (that’s French for “how do we get people to keep funding us”) has been retransmission consent. When pay-TV companies want to resell programming from local television stations, they typically negotiate with local stations for that right. ATVA’s entire policy agenda revolved around trying to drive up its members’ profit margins by talking the government into interfering in private contractual negotiations on their behalf.

    Unfortunately, ATVA had a bad year in that regard. Not a routinely bad year, more of a Charlie Sheen meltdown kind of year. ATVA’s retransmission consent campaign fell completely flat.

    (In fairness, in order to prevail, ATVA would have to convince the government that your cable company is actually a sympathetic victim that just can’t quite squeeze enough money out of you every month. This was always a long shot.)

    Having failed to hoodwink regulators into profitable market manipulation, ATVA is desperately seeking to raison a little more être heading into 2017 to justify continued contributions from its pay-TV benefactors. And ATVA thinks it has just the ticket: stifling innovation to protect its members from competition.

    In April, broadcasters, together with representatives of the consumer electronics industry and public safety, asked the Federal Communications Commission (FCC) to allow broadcasters to voluntarily use a new transmission standard that can offer better pictures, better sound, enhanced emergency alerting and expanded opportunities for diverse programming. It’s called Next Generation TV, and we think you’re going to love it.

    ATVA knows this. Some of its members are beginning to offer 4K, ultra-high-definition programming, as are over-the-top service providers. If you’ve shopped for a television set lately, you know that 4K capability is becoming ubiquitous. It certainly seems to be where the market is headed. The only way broadcasters can offer such programming, and thus the only way consumers have the option of receiving this programming for free, is if the FCC allows broadcasters to deploy Next Generation TV.

    And voila, ATVA’s 2017 membership renewal campaign: Slow Rolling Innovation to Protect Pay-TV Providers from Competition! (They’re still workshopping that slogan.) Want to take advantage of your new 4K television? If ATVA can stall approval of Next Gen TV, you won’t have a free over-the-air option for ultra-high-definition programming. ATVA’s members will be the only game in town. That ought to keep the checks rolling in!

    So ATVA is earnestly advising the FCC that it should take special care to understand whether Next Gen TV “would allow broadcasters to collect the benefits of the transition…while externalizing much of the associated costs to others.”[1] They’ve even italicized benefits and costs to make sure the FCC notices.

    There’s just one problem with ATVA’s 2017 fundraising drive: it’s transparently, embarrassingly anti-consumer. Stunning pictures, more immersive audio, enhanced emergency alerts and more diverse programming? Those are all benefits for consumers. Broadcasters are not seeking to externalize costs; they are expressly seeking permission from the FCC to make significant investments in their facilities to improve the service they offer – without government subsidies, without additional spectrum and without leaving viewers behind. It’s one thing to paint yourself into a rhetorical corner, it’s quite another to actually highlight the words paint and corner to make sure no one misses them.

    We’re confident the FCC, once again, won’t be fooled. ATVA will just have to go back to the drawing board.

    [1] Letter from Mike Chappell, Executive Director, ATVA to Marlene H. Dortch, Secretary, FCC, GN Docket No. 16-142 (Dec. 2, 2016) (emphasis in original).

     
  • NAB 3:27 pm on November 14, 2016 Permalink  

    Local Broadcasters in the Eye of the Storm 

    Alpha Media Vice President and Market Manager Gigi South shares how their stations mobilized before, during and after Hurricane Matthew to keep their communities in Savannah, Ga., and Hilton Head, S.C., safe and informed, working around-the-clock to provide a lifeline to those affected by the storm.

    The Savannah – Hilton Head area has seen lots of hurricanes in recent years with little to no damage. We were hearing that Hurricane Matthew could be different. Residents and broadcasters were skeptical. Then, South Carolina Gov. Nikki Haley ordered a mandatory evacuation of the South Carolina coast and Georgia Gov. Nathan Deal followed soon after, getting everyone’s attention.

    We met with our programming staff to bring them up to speed on the track of this massive hurricane and solidify our plan. Most of the staff evacuated, leaving a small crew of broadcasters who would ride out the storm to make sure that the residents left behind had vital lifesaving information. We prepped the studio – it was boarded up like every storefront – and made contingency plans in case of tornados, straight-line winds or flooding. We bought an extra generator and a lot of junk food. We made arrangements for our own homes and families and met back at the studio Friday morning, October 7.

    Since our stations in Palm Beach were in Matthew’s path first, Alpha’s market manager there, Elizabeth Hamma, and I shared texts through the night with our Executive Vice President Bill McElveen. Once we were in the clear, we were able to pass along information to our stations in Columbia and Myrtle Beach, who did the same for our Greeneville/New Bern stations.

    At 6 a.m. Friday, October 7, we started a seven signal simulcast of live storm information with limited music and commercial breaks. Our coverage was led by Monty Jett, a lifetime Lowcountry resident with 54 years on the air. Monty knows every nook and cranny in our area and was able to speak to callers about specific areas, tides and even give BBQ restaurants as landmarks. Rob Walker (operations manager and program director), Gabe Reynolds (program director and digital content director), Mark the Shark Ediss (WXYY), Jake Thomson (WUBB), myself and our engineer, C.B. Gaffney, hunkered down in the studio through the weekend and into the following week. We cold brewed coffee and lived on junk food and Lean Cuisines thanks to a small extra generator. Alpha provided hotel rooms for the crew, but there were curfews and the team wanted to stay together so most took turns shift sleeping at the station on air mattresses.

    Since both states had ordered mandatory evacuations, they warned that there would be no emergency services available to residents who chose to stay behind. We heard from those residents all night and all weekend long. There was no power for several days in Savannah, Bluffton, Hilton Head, Beaufort or Brunswick. People get lonely, panicked and desperate when they are alone in the dark. We have many stories of how we connected listeners directly with other listeners for the help they needed. For instance, our on-air team helped to get oxygen delivered to a listener who was moments away from an empty tank.

    This was my second natural disaster, following the devastating Tuscaloosa tornado in 2011. Both times, I’ve noticed that afterwards, there is a new appreciation for local broadcasters. With Hurricane Matthew, there was no power in most of the area until the following Tuesday, some areas waited even longer. With no power, there is often no internet, no cell service and sometimes no TV. In natural disasters, radio becomes a lifeline. We don’t actually administer lifesaving help, we connect listeners to it. We heard lots of stories from listeners thanking us for being the only voices they heard for an entire weekend. Some had battery-operated or weather radios, others went to their cars to listen once the storm had passed, but they were still in the dark.  The use of new technology was fascinating. Mayor Lisa Sulka of Bluffton held frequent press conferences to speak to her town via Facebook Live. She would let us know she was about to broadcast. We plugged a phone into the board and carried the conferences live. Thankfully, we had a generator to charge our phones!

    Having FM radio receivers in cell phones in these situations can be so helpful, providing another way for people to tune in to our stations and be informed in a crisis. Practically all smartphones have the hardware capable of receiving free FM radio signals, but not all phones have this feature activated. Unlocking the FM chip in cell phones gives us another way to reach our listeners without draining precious battery life with traditional streaming.  We also recommend that anyone facing a possible natural disaster have back up cell phone batteries. Several of us had these packs and they were all used several times to power up.

    Our simulcast ended the following Friday, October 14. We were well into recovery mode, working with FEMA and local authorities in our various communities. We are back to the music with necessary Matthew updates. Our area still has a lot of work ahead to recover from Matthew and Alpha will continue to be there. We are grateful that lives were not lost here. Other areas were not as fortunate.

    That’s the power of local broadcasting. We are neighbors helping neighbors. Friends and family connected to the community. This is a vital role we are honored to fill in the Savannah, Ga., and Hilton Head, S.C., communities.

     
  • Jerianne Timmerman 12:49 pm on November 1, 2016 Permalink  

    Let’s Do the Time Warp Again – The FCC’s Ownership Rules Remain Stuck in 1975 

    During the past year, a number of industry trade associations have changed their long-standing names. First, the Consumer Electronics Association became the Consumer Technology Association (CTA), as the “hardware” term “electronics” no longer reflected the breadth of its membership. The National Cable & Telecommunications Association then dropped “cable” from its name, becoming “NCTA – The Internet & Television Association,” to better describe its members and the consumer services they deliver. And perhaps most notably, the Newspaper Association of America (NAA) removed from its name what had defined it since the 19th century – the word “newspaper” – and became the News Media Alliance. The change was reportedly made because the word “newspaper” had become meaningless for many of the group’s existing members, and because the group did not want to exclude purely digital news organizations that had no print editions.

    Clearly, something matters in these new names. They reflect remarkable changes in technology, in consumer preferences and in the creation and distribution of news and entertainment. NAA’s new name reflects a digital marketplace so challenging that a website called Newspaper Death Watch was created in 2007 to chronicle the decline of that industry. NCTA’s new name reflects the creation of new words, such as “cord-cutters” and “cord-nevers.” All three name changes reflect consumers’ desire to communicate and to access information and entertainment any time, any place, and over any and all types of devices. They reflect the transformative power of the internet. In short, they reflect the 21st century marketplace.

    Notably, however, the Federal Communications Commission’s (FCC) broadcast ownership rules reflect none of these fundamental changes. In its long-delayed 2010 and 2014 ownership review order, which was finally published in the Federal Register today, the FCC again asserted that “non-broadcast video programming distributors” are not meaningful competitors in local TV markets, virtually ignoring a host of 20th and 21st century technologies (including cable, satellite, mobile devices and the internet) to retain its local TV ownership restriction. In an even more impressive imitation of an ostrich with its head in the sand, the FCC yet again retained the prohibition on the common ownership or operation of a daily newspaper and a radio or TV station in the same market. In maintaining a ban adopted in 1975, the FCC essentially concluded that little or nothing of import has changed in the news industry and the marketplace position of print newspapers and broadcast stations for the past 41 years – a nonsensical position on its face.

    In fact, the FCC appears stuck in a time warp, as merely stating the terms of the print newspaper rule reveals its arbitrariness in 2016. It prohibits common ownership of a broadcast outlet and a newspaper published four or more days per week in the dominant language in the market and circulated generally in the community of publication. The very notion of a rule hinging on a newspaper being printed and circulated shows its analog-era ancestry. It borders on the absurd to contend that the viewpoint diversity concerns supposedly sufficient to ban the common ownership of a station and a newspaper publishing a print edition four days a week magically disappear when the newspaper publishes online every day but publishes in print only three days a week. And this rule is still maintained by the agency that spent millions of taxpayer dollars and countless person hours on producing the National Broadband Plan.

    While the FCC saw no need to consider updating its local TV rule, it at least pretended in its quadrennial ownership order to “loosen” the “overly broad” ban on newspaper/broadcast cross-ownership. It’s hard to take that claim seriously, however, when the prohibition on owning a newspaper and a single radio station, even in the largest media markets in the country, remains in place. The FCC’s new “exception” and its vague promise of waivers to the rule are only cosmetic changes intended to disguise its back-tracking from previous quadrennial review decisions that a complete ban on cross-ownership was unjustified.

    Under its so-called exception for proposed combinations involving a “failed” or “failing” newspaper or broadcast outlet, the FCC merely adapted the existing (and deficient) standards for failed/failing stations under the local TV ownership rule. These standards, for example, require an outlet to have ceased operation for at least four months, or have had negative cash flow for at least three years. Requiring either a broadcast station or a newspaper to reach such dire straits makes it much less likely that an exception to the FCC’s cross-ownership rule would save the outlet from its downward spiral (even assuming that another same market outlet would want to invest in a station or newspaper near financial oblivion). That outcome would not serve local consumers. And where is the logic in a rule that permits stations or newspapers in involuntary bankruptcy proceedings to qualify as “failed,” but not outlets in voluntary bankruptcy proceedings?

    More fundamentally, the FCC has done nothing substantive here. The exception for failed/failing outlets, and the new waiver standard for newspaper/broadcast combinations not “unduly harm[ing] viewpoint diversity,” fail to go beyond pre-existing waiver opportunities for broadcasters and newspaper owners. The FCC’s ownership order specifically says that waiver requests for “good cause” under its general rules (Section 1.3 for those interested) are broader than its new “undue harm” standard and could include any variety of public interest considerations that the applicant believes warrants a waiver. So, if considerations of viewpoint diversity can already be addressed under the FCC’s general waiver rule, it’s unclear what, if anything, the new “undue harm” waiver standard really adds.

    This “undue harm to diversity” standard, moreover, only replaces the waiver standard originally established in 1975 to specifically address cases where application of the cross-ownership rule would be unduly harsh. Under its 1975 standard, the FCC has granted a small number of long-term and permanent waivers of the rule, generally due to the poor financial condition of either the newspaper or station involved but also on occasion based on diversity considerations. Replacing its original waiver standard with a new, narrower one cannot credibly be seen as “loosening” the cross-ownership ban. It is only the appearance of action, designed to distract from the FCC’s failure to bring its ownership rules into the internet age.

    The FCC’s inaction in the face of the profound changes recognized by the News Media Alliance and the rebranded NCTA and CTA could lead one to paraphrase a famous newspaper column from the 19th century: “Yes, FCC, there is an internet” – and it’s not as fictional as Santa Claus. Or, perhaps the FCC’s recent response to the struggles of newspapers and traditional journalism is more akin to President Gerald Ford’s response to a near-bankrupt New York City, as a memorable 1975 headline said: “Drop Dead.” And while the Ford Administration may seem like ancient history in this presidential election year, it’s no older than the FCC’s print newspaper rule.

     
  • Rick Kaplan 11:27 am on August 16, 2016 Permalink  

    Time To Put Up 

    It will be important to watch closely how the forward auction unfolds, as this is the golden opportunity for which the wireless industry has lobbied intensely. CTIA and CCA, the leading wireless trade associations, have wholeheartedly supported the Federal Communications Commission (FCC)’s hard work throughout the auction rulemaking process and have approved the agency’s ultimate auction design. These associations have claimed there is “tremendous need for additional spectrum” and that “the spectrum crisis facing the wireless industry continues to grow.” Thus, this auction has now opened for the wireless industry a long-awaited window to put its money where its mouth is, and for those who promised the incentive auction “will play a vital role in addressing the spectrum crunch,” the time to back that claim up is now.

    Although we hear a lot less these days about a so-called “spectrum crunch,” that was the rallying cry that encouraged Congress to provide the FCC with the ability to conduct this unique auction. We’ll find out soon enough whether that lobbying was simply an empty slogan or if the wireless industry is indeed desperate for more licensed spectrum.

    If the wireless industry’s demand doesn’t meet the broadcast industry’s supply, the wireless industry need only look in the mirror. Again, FCC staff worked day and night over the course of years to develop this particular auction design, and the wireless industry has been its biggest cheerleader in that regard. Broadcasters did their part in the first phase of the auction; we now look forward to the wireless industry showing up and demonstrating how accurate its countless comments, tweets and blogs about the incredible demand for spectrum really are.

     

     
  • Rick Kaplan 10:30 am on July 13, 2016 Permalink  

    One Year From Now: Full Speed Ahead With Innovation 

    At its monthly open meeting tomorrow, the Federal Communications Commission (FCC) will vote on an order setting the stage for the next generation of wireless services. The order – part of the “Spectrum Frontiers” proceeding – will make expansive amounts of high band spectrum available for wireless services, including next-generation 5G service. This vote will come just nine months after the FCC issued its Notice of Proposed Rulemaking (NPRM) seeking comment on this matter.

    That’s an admirably fast track, particularly given the scope of the proceeding. To get here, the FCC had to evaluate numerous new spectrum bands for expanded wireless operations – a total of more than 10 GHz of new spectrum – and consider appropriate service rules authorizing mobile operations in those bands. These rules include a combination of licensed use, a commercial-to-commercial shared access regime, and unlicensed use, as well as provisions to protect incumbent federal government uses in some bands.

    NAB commends the Commission for moving with such speed to lay the groundwork for the next generation of wireless services. We hope the Commission will move at least as quickly when it comes to the next generation of television service. In fact, the Next Generation TV proceeding should be much easier; the Commission does not need to authorize new spectrum sharing regimes or provide broadcasters with additional spectrum.

    The key lesson from the Spectrum Frontiers proceeding that should guide the Commission in the Next Gen TV proceeding is that flexibility is key. The Commission’s approach has been to “promote a flexible regulatory environment for the next generation of wireless services.”[1] The FCC stated that its goal was “to develop flexible rules that will accommodate a wide variety of current and future technologies.”[2] The FCC should take a similar approach towards Next Gen TV service.

    The Next Gen TV proposal before the Commission asks it to approve only a new transmission standard. This will ensure that broadcast television licensees have the flexibility to offer services and features the market demands, and will avoid bogging the Commission down while additional layers of the service are defined. In the Spectrum Frontiers proceeding, the Commission noted that it did “not intend to define what qualifies as ‘5G’,” and that standards bodies were still developing requirements.[3]

    5G’s nascent status has not prevented the Commission from moving forward in the Spectrum Frontiers proceeding, and it shouldn’t stop the Commission from moving forward with authorizing Next Gen TV. In fact, the Commission emphatically rejected calls for delay until more was known about how or whether mobile services would develop in higher bands, stating that such “delays could affect the United States’ leadership in mobile communications and hurt consumers.”[4] Similarly, delays in approving voluntary use of a new television transmission standard could affect U.S. leadership in broadcast television and deprive consumers of new features and services.

    NAB and individual broadcasters have asked the FCC to issue an NPRM by October 1 proposing rules for the voluntary use of the Next Gen TV transmission standard. If the Commission can meet that goal, and there is no reason it would be unable to do so, a nine-month benchmark would have the Commission issuing final rules allowing broadcasters to transmit using the new standard no later than July 2017 – a fitting anniversary of the 5G action the FCC will take tomorrow. Just one year from now, the Commission should be in the admirable position of having laid the foundation for the future of both the wireless and television industries.

    [1] Use of Spectrum Bands Above 24 GHz For Mobile Radio Services, Notice of Proposed Rulemaking, FCC 15-138, ¶ 1 (Oct. 23, 2015).

    [2] Id. at ¶ 3.

    [3] Id. at ¶ 1, n.1.

    [4] Id. at ¶ 24.

     
  • Rick Kaplan 2:18 pm on June 30, 2016 Permalink  

    Auction 101: Setting Prices in the Reverse Auction 

    On Wednesday, bidding in the reverse component of the first stage of the broadcast spectrum incentive auction came to a close. As promised, the Federal Communications Commission (FCC) promptly released the total clearing costs needed to close the auction at the initial clearing target. While we wait for the beginning of the forward auction, we thought this might be a good time for a refresher on how the FCC is conducting the auction and what role broadcasters play.

    The FCC enthusiastically marketed the auction to broadcasters throughout the country. It made the application process as straightforward as reasonably possible for interested stations. And it set opening bid prices – the maximum amount stations could ever get for participating in the auction – at very attractive levels to encourage broadcasters to enter the auction. As the FCC has acknowledged, robust broadcaster participation in the auction allowed the FCC to set a high spectrum clearing target of 126 MHz.

    Broadcasters currently operate on ultra-high frequency (UHF) channels 14-51. Clearing 126 MHz will require the FCC to buy enough stations to fit remaining UHF broadcasters in channels 14-29.[1] During the reverse auction, prices offered to broadcasters dropped each round by a predetermined percentage set by the FCC. Stations merely decided whether they were still interested in the auction at the new – lower – price the FCC presented to them, or if they wished to drop out of the auction entirely. At no point could broadcasters manipulate the price they were offered or control which stations the FCC would select as winners.

    Prior to each new round, the FCC ran a simulation to see if they could repack those broadcasters remaining in the auction to new channels in the reduced television band. If a station could be repacked to a new channel, its price continued to drop. If a station could not be repacked – there was nowhere to put it while still clearing 126 MHz – then the FCC froze that station at its current price. Prices for other stations continued to drop until those stations too were needed by the FCC, the stations dropped out of the auction or prices reached zero in the final round of the auction.

    To be clear, then, if a station dropped out of the auction, it received no money. And that station can’t come back and try again. It will not be eligible to participate in a subsequent stage of the auction, if one is needed. Meanwhile, a station that was frozen and is a provisional winner didn’t set its price, it’s simply in line to receive what the FCC was offering when the FCC determined that it didn’t have anywhere left to put the station in the new television band. Broadcasters didn’t have price leverage; they couldn’t “demand” a certain price or “hold out” for a certain price. Nor did they set the opening price, as noted above. Rather, the price they were offered dropped every round unless the FCC needed them to achieve the 126 MHz band plan. In short, the FCC set opening prices, set the level by which those prices would drop and selected which stations would be winners.

    Because there seems to be some confusion on this point, we’ll repeat it. Broadcasters had no levers to drive up prices in the auction. They could not “hold out.” They had no ability to force the FCC to pay a higher price than the FCC was offering. The only options available were stay in or drop out, and the only way a station could win (provisionally) is if the FCC determined it needed that station to meet its current clearing target. At that point the station’s price was frozen.

    We understand the incentive auction is quite complex given all of the moving pieces. That is hardly an excuse, however, for parties to be so far off the mark as to claim that broadcasters somehow held out or drove up the price of spectrum. That view represents a fundamental misunderstanding of the auction and maligns the work of the Commission staff as well as the positive role broadcasters have played in this process.

    Now the wireless industry is on the clock and we’ll see what kind of demand they truly have for spectrum.

    [1] This is an oversimplification, as the FCC can put a limited number of stations in the new wireless portion of the band, from channels 30-51.

     

     
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