The overlooked spectrum squatters

SNL Kagan media reporter Tim Doyle uncovered an interesting factoid this week when he reported that SpectrumCo, a cable-backed consortium, is sitting on $2.4 billion worth of spectrum that the company purchased in 2006. The airwaves are unused, and according to Doyle’s report, “It does not seem as if that will change soon, either.”

With intense focus from the FCC on broadcast TV spectrum as a “solution” to the nation’s alleged “looming spectrum crisis,” cable has been largely overlooked, a fact that has drawn jeers from both sides of an almost always disagreeable duo: Verizon and the consumer group Free Press.

Indeed, Free Press was questioning the special status of cable as early as December 2009, when the group opined on the FCC’s then-rumored spectrum plan.

“Why are the sacred cows of the telephone, cable and wireless industry left untouched?” they wrote.

Not to be outdone, Verizon CEO Ivan Seidenberg went even further. In an April Q&A following the release of the National Broadband Plan, Seidenberg did not mince words:

“Cable companies have bought spectrum over the last 10 or 15 years that’s been lying fallow. They haven’t been using it.

“So here the FCC is out running around looking for new sources of spectrum, and we’ve got probably 150 megahertz of spectrum sitting out there that people own that aren’t being built on. I don’t get that. This annoys me.”

So why is the FCC’s focus almost solely on broadcast television spectrum? Remember, TV stations just last year vacated 108 MHz of spectrum as part of the government-mandated transition to digital TV. We “slimmed down” our swatch of spectrum from TV channels 2-69 to channels 2-51. And even though broadcasters’ 108 MHz of spectrum has yet to be deployed for any new broadband services, the FCC’s National Broadband Plan is asking for local TV stations to cough up yet even more spectrum.

Make no mistake, broadcasters support expanding broadband. But it’s a false choice to suggest that broadcasting and broadband are mutually exclusive propositions. For all the hype over broadband, it remains a one-to-one technology. Its ability to deliver high-quality video as efficiently and effectively as free over-the-air digital television is hampered by the laws of physics. And that’s why passage of a spectrum inventory bill is imperative to get a complete accounting of all available airwaves.

Marleen Dooner, senior vice president of investor relations at Comcast, told investors on June 10 that the company had no intention to return any spectrum currently held by SpectrumCo.

“We have an asset in the AWS spectrum which we think is a valuable asset, probably appreciating in value,” she said, according to Doyle’s report on SNL Kagan. “I don’t think again, we have a time frame for, to make that decision [on SpectrumCo]. So, for now assume that we’ll hold it.”

It must be nice to have that option.