Posted by: Joan Marsh on February 15, 2011 at 10:44 am
After seeing NAB’s latest salvo in the spectrum debate in the Feb. 7 issue of Communications Daily, I have to admit that I agree with NAB on one point: it’s time to move beyond the rhetoric. Let’s dissect NAB’s most recent retort.
First, NAB claims that the “spectrum crisis” rhetoric is overheated. There’s certainly been a lot of (wasted) debate about the phrase “spectrum crisis.” Honestly, it doesn’t matter what you call it: you can call it a crisis; you can call it a crunch; you can call it a duck. What matters is what it means for U.S. wireless leadership and the availability of wireless data services by U.S. consumers.
There is no longer any serious debate that mobile data traffic growth continues to explode. Let’s turn again to the recent Cisco forecast. By 2015, global mobile data traffic is forecasted to reach an annual run rate of 75 exabytes. That’s the equivalent of 19 billion DVDs, or about 75 times the amount of global IP traffic (mobile and fixed together) generated in 2000.
No matter what label is used, these types of growth trends will lead to only one result: wireless network capacity exhaust (a topic appropriate for a separate blog). So, we can continue to mindlessly debate whether there’s really a spectrum “crisis,” or we can get on with discussing how this country is going to manage forecasted wireless data demands while maintaining leadership in the global wireless revolution.
Second, NAB wants to frame this debate as being some sort of “Survivor” struggle between broadcasting and broadband. The problem is that no one is suggesting that the broadcasters should or will be voted off the island, except NAB. The fact is that the broadcasters currently sit on a big, beautiful swath of well over 200 MHz of spectrum. Relying on efficient digital technologies, there’s room for the continued support of over-the-air (or OTA) TV as well as new mobile broadband spectrum allocations. Everyone can win here, including the U.S. Treasury.
Third (and my personal favorite piece of overheated rhetoric), according to NAB, the reason why OTA TV should be protected is because “unlike wireless carriers,” broadcasters “don’t charge consumers a dime for our service.” Really? Now, I’m no expert in broadcast law, but it seems to me that the must-carry and retransmission consent rules allow broadcasters to “charge” consumers quite a bit, irrespective of whether those consumers ever actually watch the broadcasters’ programming.
Under the must-carry rules, broadcasters are able to force video providers to carry their programming, even if consumers would prefer different programming. And under retransmission consent rules, broadcasters are able to charge video providers for retransmitting their programming. Either way, the broadcasters drive up video providers costs significantly, costs that ultimately must be passed on to consumers. Since the majority of consumers that watch broadcast programming do so through multi-channel video services, the net effect is that most consumers do indeed pay to receive broadcast programming. So, yes, 10 million households continue to enjoy “free” broadcast programming, but at the expense of video operators, who incur substantial infrastructure cost to deliver that same programming to their ad-friendly subscriber base. And NAB’s argument wholly ignores the lion’s share of broadcast programming “consumers” – the 60 million plus U.S. households that pay each and every month for their video programming.
These rules were enacted over a decade ago, at a time when 40% of Americans enjoyed OTA TV. That number has now dropped to 10% of total households. These marketplace changes are significant and the regulatory environment needs to change to reflect that. And unlike the broadcast business model, the wireless business model is not built on ad revenues that are sustained by access to someone else’s infrastructure investments.
Last Thursday, the President unveiled in detail his bold vision to ensure that 98% of Americans have access to 4G wireless broadband services within five years. One of the lynchpins of that plan is the reallocation of more spectrum. NAB responded by reminding everyone of the spectrum reallocation that already occurred in the 700 MHz band. Good point. Let’s review the results of that effort: OTA TV was preserved; spectrum critical to the initial deployment of 4G wireless data services in the U.S. was unlocked; and $19 billion in proceeds were generated for the U.S. Treasury.
That’s a win-win-win, and we can do it again.
