The FCC’s UHF TV Diet Plan: Slimming Down the Free TV Dial to Make Room for Expensive Wireless Broadband

By the end of this month, the Federal Communications Commission will vote on proposed rules governing a planned 2014 auction that will allow over the air TV stations to surrender their “free TV” channels in return for money from the nation’s wireless phone companies looking for more mobile broadband spectrum.

The Commission is considering reallocating UHF TV channels 31-51 for mobile data, compacting the nation’s over the air TV stations onto VHF channels 2-13 and UHF channels 14-30. But the FCC also expects many stations, particularly smaller independent or specialty channels in large cities, will be happier surrendering their broadcast TV licenses in return for cash compensation.

If the five FCC commissioners approve the plan, it will be the largest spectrum auction since 2008, and could earn the U.S. treasury billions, tempered by payouts to television stations agreeing to shut down their transmitters, and to compensate remaining stations for the cost of moving operations to a new channel number, when necessary.

“To ensure ongoing innovation in mobile broadband, we must pursue several strategies vigorously: freeing up more spectrum for both licensed use and for unlicensed services like Wi-Fi; driving faster speeds, greater capacity, and ubiquitous mobile Internet coverage; and taking additional steps to ensure that our invisible infrastructure for mobile innovation can meet the needs of the 21st century,” the agency’s chairman, Julius Genachowski, said in a statement.

The controversial auction would compensate broadcasters even before the FCC knows exactly how much spectrum it will eventually have available to auction to wireless carriers. Nobody is sure how many stations will ultimately choose to abandon their over-the-air audiences, but an FCC report predicts the largest number of station losses would be in large metropolitan areas, which often have more than a dozen stations devoted to infomercials/home shopping, ethnic shows, religious programming, and independent network affiliates. The FCC suspects some of these lower-rated stations will see the money as a strong incentive to surrender their broadcast licenses.

Genachowski

The FCC considered several spectrum-saving proposals that would free up as much channel space as possible to resell to wireless operators. One proposal would have full power broadcast outlets switch to low-powered cellular-style transmitter networks to reduce the potential interference on an increasingly crowded dial. But that proved unpopular and expensive for broadcasters. Instead, the FCC predicts stations could effectively share channels and still retain HD service. For example, a local CBS station could agree to surrender its license and broadcast instead over the transmitting facilities of the local NBC station, splitting one station’s allocated channel bandwidth in half. Other stations will be relocated on the dial or moved to different transmitter sites to reduce potential interference from stations in nearby cities.

Stations that do not require an HD service could share space with those serving several standard definition channels to the public. These are typically public, educational, or ethnic-oriented broadcasters.

As a consequence, the FCC says many stations might have to give up on their “multicast” standard definition secondary services — the 24 hour local weather or news channel, Me-TV, This TV, Retro TV, Antenna TV, and Bounce, for example, because there would be insufficient bandwidth when two services sharing one channel are transmitting in HD.

The FCC does not believe stations would mind too much, quoting from RBR/TVBR:

“So far, nobody’s been able to figure out what can go on a digital side channel and pay for its own presence there. Mostly it’s been used as a revenue-neutral or money-losing place to put 24-hour weather… Nobody watches these things in strong enough numbers to generate any advertising revenue.”

But the FCC did recognize that certain viewers in fringe reception zones could experience a loss of service — one that could be addressed by subsidizing improved antennas for homeowners or requiring cable or satellite operators to develop a “lifeline” television service consisting of local broadcasters, either for free or at a minimal monthly cost.

Some consumer groups worry that any forthcoming spectrum auction would be dominated by Verizon Wireless and AT&T — the nation’s two largest carriers, who could easily outbid smaller cell phone companies also clamoring for spectrum. During the last auction in 2008, which netted nearly $20 billion, Verizon Wireless walked away with the bulk of the spectrum on offer. Without auction rules setting aside significant spectrum for smaller competitors, both dominant carriers could lock up one of the last spectrum auctions for the next 5-10 years, cementing their de facto duopoly.

The FCC is considering reworking its market concentration rules before the bidding begins, which could constrain Verizon and AT&T from bidding and winning the bulk of available frequencies in the cities where they dominate.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Bloomberg FCC Chair on Spectrum Auctions 9-10-12.flv[/flv]

FCC Chairman Julius Genachowski talks about rising demand for mobile broadband access and the outlook for spectrum auctions to free up more airwaves. He speaks with Cory Johnson on Bloomberg Television’s “Bloomberg West.”  (7 minutes)

On important issues for the online community, there are some substantial differences between the Democratic and Republican parties, particularly regarding Net Neutrality.

A review of the yas and nays in both party platforms (and past history in Congress) shows your vote can make a difference when Washington ultimately deals with privacy, network traffic, piracy, cybersecurity, and broadband expansion.

Net Neutrality – “Preserving the free and open Internet”: Prohibits providers from discriminating against different types of network traffic for profit or control

• Democrats: Yas
• Republicans: Nay

While the Democratic platform specifically states, “President Obama is strongly committed to protecting an open Internet,” one “that fosters investment, innovation, creativity, consumer choice, and free speech,” Republicans have treated Net Neutrality as anathema to the free market. Although virtually every Republican member of Congress has voted against Net Neutrality or publicly opposed the concept, some Democrats have as well, particularly those who have received significant financial contributions from the largest phone and cable companies lobbying against the policy.

Net Neutrality has not proved to be a major issue in Congress this year, with most of the recent battles taking place at the Federal Communications Commission. FCC chairman Julius Genachowski applauded a ‘third way’ for Net Neutrality, staking out a middle-of-the-road policy that pleased few outside of the FCC. It largely leaves the concept a “suggestion” for wireless carriers. Replete with loopholes and enforcement issues, even wired providers like Comcast have run around the policy for their own benefit.

Network Privacy – Full disclosure when websites track your browsing habits, and how online companies protect your private information

• Democrats: Yas, provisionally
• Republicans: Yas, provisionally

Net privacy is a topic many consumers hear about the most when a website gets hacked and private customer information is stolen in the process. But a growing number of consumers are also concerned about what websites are doing with their information and how their web visits are being tracked for advertising purposes. Large online companies like Facebook and Google have a vested interest in keeping this space as unregulated as possible to maintain lucrative revenue earned selling demographic information to advertisers. But consumers may not want advertisers to know the websites they visit, and members of both political parties have expressed growing interest in taming who gets their hands on your private stuff. Republicans are primarily concerned about tracking by government agencies, Democrats are more concerned with for-profit use of customer data.

The Republican platform abhors government intrusion into private liberty — primarily a reference to certain forms of surveillance. But the GOP platform is silent on enhancing privacy rights of consumers. The Obama Administration has been calling for a “Privacy Bill of Rights” that permits consumers to opt out of web tracking cookies and other tracking technology. Democrats separately want companies to do a better job disclosing and explaining how private information is being used. But Congress, under heavy lobbying to avoid the issue, never acted on the administration’s request.

Expanding Broadband: Finding New Wireless Spectrum and Improved Rural Access

• Democrats: Yas on both
• Republicans: Yas on one, vacillating  on the other

While neither party fully embraces their respective platforms while governing, their stated positions often reflect political positioning when new laws are contemplated.

The Democrats tout both their National Broadband Plan and the Obama Administration’s commitment to find Internet access for 98 percent of the country and expand spectrum available to meet the growing demands for wireless data. The Democratic platform touted President Obama’s proposal to promote wireless broadband as a possible rural Internet solution.

Another face in the crowd.

For customers uncomfortable being seen anywhere near a Cricket store, Radio Shack’s No-Contract Wireless may be just what you were waiting for.

The electronics chain today unveils two Cricket-powered mobile phones as part of their new “no-contract” prepaid wireless offering.

• The Huawei Mercury Ice is exclusive to RadioShack for the next 30 days and appears to be a slight makeover of the original Huawei Mercury… in white. For $149.99, the Android 2.3 phone is powered by a 1.4 GHz processor, a scratch-resistant 4-inch FWVGA screen and 8MP camera. With Muve Music® included in the $50 a month unlimited data plan, the phone delivers unlimited song downloads, ringtones and ringback tones.
• The $39.99 Huawei Pillar feature phone works with plans that start at $25 a month, includes a QWERTY keyboard, camera, and rudimentary mobile Web access.

Cricket’s own cell coverage is more limited than most carriers, and an extensive roaming agreement with Sprint covers the rest of the country where Sprint provides service. If Sprint does not cut it in your area, Cricket will not either. Cricket emphasizes its home coverage in urban and near-suburban areas and across major highways. Their rural coverage is extremely lacking.

Once you reach the specific data limit, Cricket throttles your connection speed to something comparable to dial-up.

Unfortunately, Radio Shack does not bring anything new to the deal except additional retail stores where customers can buy phones and activate the service. Cricket customers can choose these plans and a wider array of phones directly from Cricket, its website or one of its authorized dealers or resellers. But if your nearest Cricket store is in a sketchy neighborhood or you don’t want your friends to catch you walking out of one, Radio Shack offers a potentially safer alternative (although nobody under 40 probably shops at Radio Shack either).

That being said, Cricket offers respectable service when you live and travel in areas where it provides service. In suburban Rochester, N.Y., your author’s personal experience is that voice coverage is comparable to that offered by Sprint. Their 3G network performs better than Sprint, but falls far behind AT&T, T-Mobile, and Verizon Wireless. Data roaming over Sprint’s 3G network is painfully slow in this area.

Cricket is planning on upgrading to 4G LTE service in additional cities next year. Currently, its coverage map only shows LTE service in Tucson, Ariz.

Sprint has launched a new ad series and accompanying web site to warn consumers that choosing Verizon’s new Share Everything data plans can give you a big headache and a higher monthly bill.

“The concept of sharing a monthly data allowance across a family or group of users increases the likelihood for a surprise monthly bill due to data overage charges,” said Caralene Robinson, vice president of brand strategy and marketing communications for Sprint. “Data usage continues to increase and consumers value Truly Unlimited data because it’s simple and straightforward.”

Sprint argues that customers have enough trouble differentiating the usage of the applications they run themselves. When sharing a data plan with other members of a family, it can quickly become impossible to know exactly who is consuming what. That makes it easy to exceed a monthly usage allowance, which results in costly overlimit fees. Tracking usage and the inevitable arguments that will result at the dinner table make Verizon’s new share plans a real headache in Sprint’s view.

Sprint proposes that customers switch to their Truly Unlimited data plan, which has no limits and also costs less than Verizon’s shared data plan. Sprint also continues to sell budget plans that offer a calling allowance in return for a reduced price. Verizon now only sells unlimited voice minutes bundled into their Share Everything plans.

Unlike most carriers who boast customers can send millions of e-mails or visit hundreds of thousands of web pages with a low allowance data plan, Sprint explains what a 1GB limit really means when customers use increasingly popular streaming services and apps. It turns out Verizon’s 1GB allowance plan does not deliver that much.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Sprint Say No to Sharing – Family Meeting.flv[/flv]

Sprint launches its “Say No To Sharing” and “Say Yes To Sprint” campaign with this “Family Meeting” ad, which shows a family debating how to divide up their shared data plan and avoid overlimit fees.  (1 minute)

CNN faces another challenge to its declining brand as Clear Channel Outdoor Holdings prepares to launch a competing network, viewable only in airports.

Since 1992, CNN has dominated airport televisions with its CNN Airport Network, a live channel showing a custom-programmed feed of CNN that assures it will never televise graphic video coverage of commercial air accidents or incidents to its viewers.

CNN makes its money selling advertising opportunities on the channel, which it claims is seen by nearly 248 million air passengers yearly in more than 40 airports for an average of 47 minutes each.

But much like CNN’s declining ratings, airport travelers have increasingly tuned out the channel, preferring to spend their waiting time with their own mobile devices. As the times have changed, Clear Channel has proposed that airport viewing change with it.

The media conglomerate announced this week it is unveiling a new TV service for airports that will air programming from major television networks and cable channels. With more than 100 content deals signed thus far, ClearVision intends to give CNN a run for advertiser money.

Toby Sturek, Clear Channel’s head of airports, told Reuters the company is in discussions with about 20 mostly medium-sized airports to host the new service. ClearVision has already signed Raleigh-Durham International, where CNN Airport Network is not seen. ClearVision will launch in that North Carolina airport this November.

Sturek said airport owners want a variety of programming to show waiting passengers, and CNN no longer cuts it with advertisers, which he says have shown little interest in supporting CNN’s venture. Sturek says they simply do not see the value of advertising on the airport channel. Still, industry insiders estimate CNN Airport Network earns the Time Warner-owned news channel at least $10 million annually.

ClearVision intends to challenge CNN’s dominance by giving viewers a greater range of programming, and starting next spring, its viewing monitors will also act as Wi-Fi hotspots, letting mobile devices connect and stream the same content for free to enhance a personal viewing experience. Because the service will be available over Wi-Fi, viewers will avoid eating away their monthly data allowance with wireless providers.

Eventually, ClearVision intends to serve up multiple channels of video content. Sturek says that will allow one viewer to watch the latest business news headlines while another watches “America’s Got Talent.”