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)

Neighborhood terminal pedestals can serve from a half-dozen to 200 customers. This one is designed to service a small neighborhood.

Time Warner Cable is asking a Padre Island, Tex. customer to pay $850 to move a cable company pedestal box installed in her front yard by mistake.

Dorothy Harper’s home is located right on the shoreline, so utility companies have traditionally placed their equipment in a utility easement adjacent to the street. But Time Warner Cable, for whatever reason, decided to install their unsightly neighborhood terminal pedestal in the middle of her front yard, in front of her home, despite the city’s request that cable operators keep their equipment in a designated easement along the property line.

Harper has been trimming around the pedestal for years, irritated by its presence but infinitely patient that one day the company would do the right thing and move it to its proper location.

Her patience wore out when competing cable company Grande Communications expanded service on Padre Island and felt its own pedestal box would be right at home next to the improperly located one owned by Time Warner. Harper arrived home one afternoon to find both boxes happily creating a tremendous eyesore.

Harper told The Caller she called Grande Communications, which eventually moved their pedestal to the proper location. But Time Warner Cable proved infinitely more stubborn, even when the city got involved:

Edward Villarreal, who issues fiber optic and utility permits for the city’s Development Services, visited Harper’s property. He took photos of the cable pedestal and made phone calls to Time Warner on her behalf, without success, he said.

“It’s definitely an eyesore I wouldn’t want in the middle of my property,” Villarreal told Troubleshooter Thursday.

Harper got tired of the fight with Time Warner and backed off for a while, she said.

“Every time I drive up to our home, I am angered again at Time Warner and their negative response to a problem that their workers created,” she said.

Recently she called Time Warner again and was told they would move the pedestal if she paid $850, Harper said.

The newspaper’s troubleshooter intervened, calling Time Warner’s regional headquarters looking for a resolution and found someone a bit more sympathetic.

Jon Gary Herrera, regional vice president of communications for the cable operator said complaints about unsightly cable pedestals are common, but the company would be willing to move the one in front of Mrs. Harper’s home if the mistake was theirs.

If not, Time Warner has a solution to quiet chronic complainers. The company has been known to provide a rock facade to cover the ugly pale green lawn stump and make things more landscape friendly.

One reader had a last-ditch solution in case that did not work:

Make the switch to Grande and then arrange for someone to “accidentally” do a hit and run on the cable box thus forcing Time Warner to come out and place it in the proper location.

Frontier Communications is ready to deliver some customers faster DSL speeds in portions of West Virginia that have, until now, been stuck with 3-6Mbps from the phone company.

Residential and business customers in certain exchanges within Kanawha and Putnam counties can now upgrade to speeds up to 25Mbps for $54.99 a month, which Frontier claims also includes a combination modem-wireless router. Small business customers can get up to 40Mbps DSL service, where available.

Dana Waldo, senior vice president and general manager for Frontier’s operations in the state told the Charleston Daily Mail the company’s new Broadband Ultra and Ultimate DSL will be gradually extended within both counties by the end of this year. In order to sell faster DSL service, Frontier has to replace portions of its existing network with fiber optics and install new equipment to reduce the length of copper wire between the phone company and the customer.

Larger businesses in West Virginia are being marketed an even faster Metro Ethernet product, which can deliver gigabit speeds and beyond, for an exceptional amount of money.

The speed expansion, which covers both the city of Charleston and the growing suburbs to the west in Putnam County along Interstate 64 towards Huntington, is likely designed to curb customer defections to competing cable providers, which have delivered faster speeds in the rapidly growing region.

Frontier has not indicated when it plans faster broadband service for the rest of the state.

When Time Warner Cable can’t reach a retransmission consent agreement with local broadcasters, it can thank a loophole left in a badly-written contract the cable company has with Nexstar Broadcasting, a Texas station owner group, for providing a stop-gap solution.

A federal judge ruled late last week Time Warner Cable was allowed to replace local affiliates with Nexstar-owned stations because their contract does not prohibit the cable operator from the practice.

When the cable company’s carriage agreement with Hearst Corporation expired in July, Time Warner replaced affected local stations in Ohio, Kentucky, Florida, North Carolina, Vermont and New York with Nexstar-owned stations based in Terre Haute, Ind. (NBC affiliate, WTWO-TV), Wilkes-Barre, Pa. (NBC affiliate, WBRE-TV), and Rochester, N.Y. (CBS affiliate, WROC-TV).

Viewers in Kentucky ended up getting the local news from a station in western New York, located hundreds of miles away, but cable subscribers still got to watch their favorite network shows.

Nexstar sued Time Warner in federal court to stop the practice.

But Judge Jorge Solis could find nothing in Nexstar’s agreement prohibiting the cable company from importing the distant stations.

“Nowhere in the [agreement] does Nexstar limit its retransmission consent,” Solis wrote. “It appears the language limiting the broadcast […] is not present when Nexstar gives its retransmission consent under Section 1. In fact, it is specifically omitted when describing the ‘retransmission consent’ under Section 1.”

Solis refused to grant a request for a temporary restraining order and preliminary injunction stopping Time Warner from carrying Nexstar stations outside of their designated local broadcast areas.

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.