An offer TV station owners can’t refuse?
For decades, owning television stations, with their fat profit margins, was a license to print money.
But the growth of cable and now broadband has lured away TV viewers and made stations less profitable. Finding new sources of revenue is crucial, and broadcasters are counting on -- and jealously guarding -- their slice of the public airwaves as the conduit for that future revenue via new channels and services. Any loss of that spectrum, they fear, would cost them potential income.
That fear will be on full display Tuesday as broadcasters, gathering in Las Vegas for their annual convention, hear Federal Communications Commission Chairman Julius Genachowski outline his plans for a broadband future. It’s a future they feel might not include them.
Specifically, the FCC says it needs 120 megahertz of spectrum currently allocated to TV stations to allow for faster mobile devices and better broadband service. It wants TV stations to voluntarily hand over the rights to some of their airwaves, which the FCC would then auction to telecommunications firms, sharing the proceeds with the broadcasters.
If stations don’t voluntarily give up the bandwidth, the FCC is prepared to recover it through other methods, though Genachowski has been vague about just how the agency would go about it.
Genachowski’s plan for a faster Internet and better smart phones -- and with it the suggestion that TV stations surrender some of their spectrum to make that happen -- reminds the industry’s top lobbyist of Vito Corleone’s definition of “voluntary.”
“Either your signature or your brains will be on the contract,” said National Assn. of Broadcasters President Gordon Smith, paraphrasing the “Godfather” mafia don, when talking about Genachowski’s pitch.
Hyperbole for sure, but the TV industry insists that it needs those airwaves for its long-term survival and that, contrary to what the FCC says, there’s no shortage of spectrum for broadband and mobile services.
Critics have long contended that broadcasters already fall short of their public-service mandate. Local news is largely driven by sensational coverage of crime and celebrities, they say, and stations have largely abandoned children’s and educational programming.
A chunk of broadcasters’ spectrum is used to transmit high-definition TV signals, which require more bandwidth than standard signals. Some stations also use their spectrum for channels featuring 24-hour weather, foreign language programming or reruns. And down the road, TV stations hope to offer content for mobile phones, laptops and even screens embedded in automobile seat backs, using even more spectrum.
“We’re very active on all these fronts,” said Alan Frank, president of Post-Newsweek Stations, which uses some of its spectrum to carry a Spanish-language channel on its Florida and Texas stations and recently started offering mobile television in Detroit.
A top FCC official says that the agency’s request is totally voluntary, and that comparing it to mob persuasion is overwrought.
“There are some myths with respect to what is being proposed. . . . Participating is entirely the decision of the station owner,” said Colin Crowell, senior counsel to Genachowski.
The agency clearly wants to boost broadband and mobile as more people turn to devices that use those technologies. Crowell noted that “a hundred million people are actively using Facebook from their mobile devices . . . [so] there is no question of the demand on mobile networks and need for more spectrum.”
In a speech to the New America Foundation in February, Genachowski said spectrum “is the oxygen of mobile broadband” and warned there is a danger of starving it of the “nourishment it needs to thrive as a platform for innovation, job creation and economic growth,” repeating the assertion that broadcasters were not currently using all the spectrum available to them anyway.
Broadcasters interpreted Genachowski’s comments as code for them being forced to play second fiddle to the phone companies, which, they say, would not better society. The TV industry, when asked about how it uses its spectrum, often points to the public-service mandate, noting that local stations provide news and weather and have to meet regulatory guidelines that others do not.
“I’m not sure that the iPhone has the public requirements and all the things that are layered onto broadcasters because we are using the public airwaves,” said Perry Sook, chief executive of Nexstar Broadcasting, which owns or operates 62 local TV stations. Post-Newsweek’s Frank complained that the government wants the spectrum to speed up the delivery of the latest video games to “some teenage boy locked in his room.”
Genachowski submitted his broadband plan last month to Congress, which will decide whether broadcasters should return some spectrum.
A former broadcaster himself, Genachowski probably will choose his words carefully in his address Tuesday. But even that seemingly benign word “voluntary” can be a lightning rod.
“I was in the Army,” said Post-Newsweek’s Frank. “I understand ‘voluntary’ very well.”