Tuesday, December 8, 2009

The Future of Over-the-Air Television

This is something to ponder:

You stupidly built a drive-in theater in the desert just as your customers were all deciding to stay home and watch HBO. Fortunately, the theater turns out to be sitting on a mountain of oil.

With a few asterisks, such is the situation of old-style TV broadcasters, whose viewers have fled to cable or satellite but whose spectrum is lusted after by the wireless industry. According to a much-noted study sponsored by the Consumer Electronics Association, in the hands of the broadcasters, that spectrum is worth a mere $12 billion.

In the hands of mobile phone carriers struggling to meet explosive growth for mobile broadband, it would be worth $62 billion.

To the Silicon Valley types who people the Obama administration, this suggests a rational policy: Pay broadcasters to give up some or all of the airwaves used to send signals to their dwindling rabbit-ear audience. Turn it over to mobile phone folks at a hefty markup.

Blair Levin, a veteran telecom analyst who heads the FCC’s broadband efforts, has floated a Hindenburg of a trial balloon by broaching just such a deal with broadcasters. Virtually all agree that any such “grand bargain,” to be politically deliverable, must enlist the willing, nay eager, participation of broadcast station owners. No problem—broadcasters would be the biggest winners, right?

Sadly, remember what happened to the original Hindenburg. Broadcasters, who have a keen sense of political realities, note that their broadcast licenses don’t actually confer a property right, so whatever deal the FCC struck with them, Congress would certainly rewrite it to make sure Congress got all the money. Broadcasters would receive squat, and probably be vilified as bandits in the process.

There is still a nominal audience out there, of people who just shelled out money to switch to digital converters. No one uses analog television in this country anymore, at least, not that I’m aware of. There was a massive scramble to get the converter boxes, and quite a few people still didn’t get the word or get the boxes they needed.

About the only way certain networks are going to expand is if they free up bandwidth or find a technology to make the existing bandwidth work with more devices. This is where having an honest broker at the helm of the regulatory agency, the FCC, makes a huge difference. There may not be the kind of focus on this issue that things like health care, war, and the budget receive, but it still has huge implications for everyone who uses a mobile device.

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