Cicconi Questions How Much Spectrum Broadcasters Need

"The over-the-air broadcast industry is down to 10 million customers and it’s falling like a stone,” Cicconi said. “This will become the pager industry unless something dramatic happens.” Congress also should ask why, if broadcasters “truly need” the spectrum they have, “they need a must-carry-rule” as well, he said.

Some observers had expected AT&T to take a slightly softer, gentler line with the T-Mobile merger pending, but that wasn’t so Wednesday. Cicconi said unless the T-Mobile deal is approved, AT&T will have only 5 MHz of spectrum left to expand its network in New York City by the end of next year. But, he said, even after the T-Mobile acquisition AT&T would be in the market for more spectrum.

"The core problem that the commission, I think, is rightly trying to address, and is asking the Congress to address, is that large blocks of spectrum are being put to very inefficient or very little use today,” Cicconi said. Broadcasters have few incentives to use their spectrum efficiently, he said. “They didn’t pay for the spectrum in the first place. The government gave it to them for free.” Congress is likely to authorize incentive auctions because there are “almost no viable alternatives,” he said.

Cicconi said he can’t understand why broadcasters would oppose legislation allowing the FCC to hold voluntary, incentive auctions. “One would think they'd at least want the choice of making money with this spectrum or not,” he said. Incentive auctions will help the FCC determine the best use for broadcast spectrum, he said. Some critics have blasted AT&T for being slow to build out its network using its 700 MHz spectrum. Cicconi noted that all of the licenses came with build out requirements. “As far as I know, we're meeting all those,” he said. “You have a lot of spectrum that is in the process of being built out now."

"We've come to expect misinformation from our wireless industry friends, and again they do not disappoint,” responded NAB spokesman Dennis Wharton. “There are 43 million Americans that are exclusively reliant on over-the-air television as their only source for TV, which includes residents in one in three Spanish-speaking and Asian-American homes. Over-the-air viewership is growing, not shrinking, as a result of the ‘cutting the cable cord’ phenomenon. NAB has never opposed voluntary auctions, but we would strongly oppose voluntary auctions if the ‘non-volunteer’ stations and the millions of viewers they serve are harmed.” Any spectrum crunch is confined to a few big markets, Wharton said. “One has to ask why free TV should be compromised in Bend, Ore., just to accommodate a faster download app in Los Angeles.”

Levin, architect of the FCC’s National Broadband Plan, said voluntary incentive auctions remain the best alternative the FCC has to get broadcast spectrum into play for wireless broadband. “If we don’t want to spend 15 years in a regulatory process and litigation … incentive auctions are a much faster way to do it even with all the time it’s going to take,” he said.

Levin also said broadcasters could start to use their spectrum more efficiently by adopting the MPEG-4 standard. Broadcasters at least should have to decide, he said. “If we're going to do that let’s have a plan today,” Levin said. “Let’s start talking about that today. … Let’s get the cards on the table."

Rick Whitt, Google’s Washington telecom and media counsel, said the wild card is whether Congress will approve incentive auction legislation. “Assuming they do, I think the commission is poised to move forward as quickly as they can,” he said. “To me, the real issue is how to go about fashioning a successful auction. … This involves countless important auction design questions that have yet to be fully answered.” Whitt stressed the need for a federal spectrum inventory to determine “whether, when, where, how and by whom, spectrum is being utilized."

Cicconi told reporters AT&T will not change its advocacy at the FCC on many issues despite the pending merger and remains opposed to a data-roaming mandate (CD March 30 p1). “Our position on that issue hasn’t changed,” he said. “Our point is FCC policies should be incenting everyone to build more infrastructure.” No one has demonstrated they can’t cut data roaming deals and AT&T remains willing to negotiate with other carriers, he said. On other issues before the FCC, “we serve our shareholders’ interests,” he said. “I think the FCC understands that.”

Cicconi also said he expects a tough approval process for the proposed T-Mobile merger. “Certainly the [Justice Department’s] Antitrust Division is going to have a an awful lot of questions and concerns and we know the FCC is going to as well,” he said. “We'll do our best to answer their questions and their concerns.” AT&T likely won’t make a merger filing at the FCC for several more weeks, he said.