Senate Panel Expected to Drop Effort to Auction Digital TV Licenses

Fearing a protracted battle with broadcasters and other interest groups, a Senate panel is expected on Thursday to abandon its effort to auction licenses for digital television in 25 major markets.

The Federal Communications Commission has announced plans to give each television broadcaster a second channel so that stations could send both analog and digital signals during a 15-year transition period to digital TV. After the transition, broadcasters would give back one of their two channels.

But many have criticized the FCC plan as a giveaway to broadcasters, and the Senate Commerce Committee has been considering whether to order the spectrum to be auctioned instead. Such a sale would also help the FCC meet the Congressional mandate to raise $14 billion on airwave auctions over the next seven years, on top of the $8 billion already raised by selling spectrum for new wireless communications services.

“My understanding is that the committee is not going to auction the spectrum,” said a Senate aide familiar with the latest proposal. “I think the committee plans to do what the House did” and throw the ball to the FCC. Two industry observers echoed that prediction.

The House Commerce Committee has already approved a federal budget measure that calls on the FCC to raise the $14 billion without charging TV broadcasters for the second channel they will need to offer digital television. The measure does not specify which parts of the airwaves should be sold.

The proposal expected to be approved by the Senate Commerce, Science and Transportation Committee on Thursday would also direct the FCC to come up with a plan to raise $14 billion, though it does not specifically exempt broadcasters from having to pay for spectrum.

Groups such as Americans for Tax Reform, a Washington-based anti-tax group, have criticized the free transfer of airwaves as a “multibillion-dollar gift to one of the least neediest groups in the country . . . at the expense of American taxpayers.” They and other critics argue that broadcasters should pay for airwaves needed to transmit the ultra-sharp pictures and CD-quality sound promised by digital TV technology.

The FCC is currently seeking comment on an array of digital TV issues, including whether broadcasters should be required to carry a minimum amount of high-definition programming and whether the current 15-year transition period should be shortened to 10 years. The FCC is also trying to determine whether broadcasters should be given the freedom to offer other communications services on the airwaves designated for HDTV.

Exploring any additional digital TV issues is likely to delay further a technology that many consider the most important technical change in broadcasting since the introduction of color TV in the 1960s.

Yet contrary to the rosy expectations many had when HDTV first hit the technology policy stage nearly a decade ago, the bloom appears to be off HDTV. Broadcasters don’t want to bid for spectrum and then spend millions of additional dollars to equip their stations for HDTV broadcasts. Consumers may be hesitant to spend as much as $3,000 for a new set capable of receiving the signals.

“No one is going to be able to afford to pay a huge chunk of money for spectrum and then provide free over-the-air broadcasts,” said Lynn McReynolds, a spokeswoman for the National Assn. of Broadcasters, a Washington trade group.