FCC’s Wheeler Pitches Spectrum Auction to Broadcasters: But Should They Cash In?

Chairman Tom Wheeler opened his keynote address to the 2015 National Association of Broadcasters with nothing but praise and admiration for their profession, stating that they (broadcasters) offer their audiences a unique product that no other current emerging platform can give: local news and information.

Tom WheelerWheeler went on to describe his recent experience with various media outlets during the storms that rocked the north east this winter. “I used my weather channel app on my phone regularly,” Wheeler admitted. “But when I wanted information that really matters, when I wanted to find out what the real skinny was that was going to affect my life, I went to my local broadcasters.” He then closed his opening remarks of praise by pointing how the broadcasters “put themselves in danger” to service their community in the midst of the storm.

This was a lead in to his quick pitch at the NAB Show for the upcoming spectrum auction. In this spectrum auction, the FCC would sell licenses to transmit signals over specific bands of the electromagnetic spectrum to wireless providers, and then share the profits with broadcasters who are the current holders of the spectrum.

But new details regarding the forthcoming spectrum auction were surprisingly thin. Wheeler mentioned it will take place in early 2016, with the FCC accepting applications as early as this fall, and that they want to make it “more accommodating” for broadcasters.

SmartphoneWhat struck me as both odd and alarming was the absence of constructive criticism directed towards the traditional methods of broadcasting (both in Wheeler’s speech and throughout the entire show). Now, this isn’t to say there weren’t talks regarding the changing media landscape, but the topic of the potential industry-saving innovation from broadcasters (particularly television) were sparse. And, whatever discussion there was regarding the issues presented an array of underwhelming, short-term solutions.

There is no denying the truth that, as Chairman Wheeler pointed out, OTT services are beating out cable, and that consumers are pursuing alternatives to broadcast TV. But the question constantly on my mind is: how can broadcasters remain relevant well into the 21st century? And perhaps more important for broadcasters to explore, what role, if any, could this currently owned spectrum play in their reinvention?

Trends in media consumption changed radically last year, with digital viewing increasing at an impressive rate. According to a 2014 Nielsen report,  growth for digital viewing rose 53% for individuals ages 18 to 43 over the past year. In fact, this high growth of digital viewing is even more pronounced for older demographics with an 85.7% rise in 35 to 49 year olds and a 72.7% rise in 50 to 60 year olds. TV, on the other hand, saw a 4.2% average drop in adult screen use during the past year.

It is true this buyout of spectrum will potentially serve as a life preserver for a struggling broadcast station. But it also could, in my opinion, prematurely rule out any further advancement that may have otherwise utilized that spectrum (potential 4k and 3D capabilities being one).

As Wheeler described it, the spectrum auction is “a once in a lifetime, risk free opportunity to expand your business model on someone else’s dime.” But what if that business model requires that same spectrum to advance forward? To prematurely classify the auction as a “once in a lifetime opportunity” that would leave our wireless future in the fate of one obscure auction with a commodity is so abstract and unpredictable, should come across as frightening to broadcasters. It’s just too early to call.

TV wastelandIt is true this is not for me to decide. It’s for the each owner of spectrum to decide, given their unique circumstances. As a consumer and an academic observer I am highly interested in seeing potential expansion of broadcasting well beyond its conventional boundaries. I just hope that broadcasters retain an open mind in regards to the possibilities of “broadcasting” in the future, whatever that may look like. They need to find the courage to innovate, or they may perish.

Aaron Sprengeler

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