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A day after the chairman of the National Association of Broadcasters opened the NAB Show in Las Vegas by ripping the FCC over its broadband plan, FCC chairman Julius Genachowski gave a keynote to broadcasters there, warning that demand for mobile Internet access will soon outstrip supply and that its plan to allow broadcasters to share "spectrum" is vital.
”On our current trajectory, the demand for spectrum for mobile Internet access will outstrip the supply,” Genachowski said. “By a lot.”
"We’re already seeing signs of the problems to come," he said. "Reports of consumer frustration with mobile are growing -- and will only increase if we stand still."
"To deliver the mobile Internet future, we’ll need new spectrum-efficient technologies, and we’re asking at the FCC how can we best incentivize the development and deployment of such technologies."
"These strategies are necessary, but not sufficient," he said. "The record is clear: America needs more spectrum for mobile internet access."
Genachowski outlined the FCC's plan -- which proposes "voluntary incentive auctions" for broadcasters who choose to share or sell parts of their unused broadband spectrum -- and blasted its critics.
"A lot has been said and written about this auction proposal, including at this conference, that just isn’t accurate," Genachowski said.
Here's the key part of his speech:
Let me make four points about incentive auctions as applied to broadcasters, and dispel four myths.
1. These auctions are voluntary. Period. Participation is up to the licensee and no one else.
2. For the plan to work, we don’t need all, most, or even very many licensees to participate.
If a relatively small number of broadcasters in a relatively small number of markets share spectrum, our staff believes we can free up a very significant amount of bandwidth.
And rural markets would be largely unaffected by the recommendation in the broadband plan because the spectrum crunch will be most acute in our largest population centers.
3. We anticipate mechanisms to reduce or even eliminate risk, and maximize upside, for broadcasters that elect to participate in the auction. For example, the plan could allow broadcasters to set a reserve auction price below which their licenses wouldn’t transfer. The mechanism could lock in a payment for broadcasters, while allowing for participation in upside above that level.
4. Auction rules and mechanisms will be developed through an open and transparent process, with ongoing dialogue about the best design mechanisms for incentive auctions, focusing on what will actually work and meet the country’s needs.
In sum, the intention of the proposal is to provide broadcasters with more choice and flexibility, not less. More business model options, not fewer. While at the same time helping address a vital national challenge.
Let me now address some myths about incentive auctions.
Myth #1: The plan is to confiscate broadcasters’ spectrum and drive broadcasters out of business.
Not so. Again, the incentive auction plan is voluntary. No one will be forced to participate.
