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Kennard Blasts Broadcasters for Spectrum Squatting and Scant Elections Coverage

(October 11, 2000) FCC Chairman Kennard harshly criticized TV broadcasters for their slow deployment of digital television, and their failure to broadcast debates, other elections content, and free advertising. He stated that the broadcasters' slow conversion to digital TV constitutes "spectrum squatting". It prevents the FCC from auctioning their analog spectrum to providers of wireless services, including Internet access.

See, "What Does $70 Billion Buy You Anyway? Rethinking Public Interest Requirements at the Dawn of the Digital Age," speech by Wm. Kennard, October 10, 2000 (link to FCC web site).

Federal Communications Commission Chairman William Kennard spoke at the Museum of TV and Radio in New York City on October 10. He spoke in unusually blunt and critical language. However, television broadcasters have incurred the wrath of Kennard, not only for their handling of DTV and presidential debates, but also for lobbying the Congress to pass legislation restricting the FCC on low power FM licensing, and for other matters.

Kennard stated that "Congress granted the networks this digital spectrum in addition to the conventional analog spectrum they already have, effectively giving broadcasters twice their allotment of precious bandwidth. And they said that the broadcasters could keep the analog portion of the spectrum until 2006, or until DTV penetration reached 85% of the American market, whichever is later."


"Basically, the broadcast networks were the beneficiaries of the biggest government giveaway since Peter Stuyvesant bought Manhattan from the Indians for $24," said Kennard. "And, to compound the public damage of this protectionism, the broadcasters have decided to sit on these two highly valuable properties -- licensed to them for free by Congress -- for as long as they can."

"Now, spectrum-squatting may make great business sense for the broadcasters, but in terms of the public interest it makes no sense at all. Squatting on empty spectrum smothers innovation and endangers America’s lead in new technologies," said Kennard.

This spectrum, which now used for analog broadcast, would be made available for auction to wireless providers.

Tom Wheeler, the CEO of the Cellular Telecommunications Industry Association, was elated by Kennard's speech. The wireless communications industry wants more spectrum, in part to provide wireless Internet access.

Letter from CTIA CEO Tom Wheeler to FCC Chairman Kennard.
Re: Kennard speech criticizing broadcasters as "spectrum squatters."
Date: October 10, 2000.
Source: Cellular Telecommunications Industry Association.
Congratulations on your superb speech at the Museum of Television and Radio today.

The rest of the world is building the pathways for the next generation Internet - a wireless Internet - while American consumers and entrepreneurs are encumbered with spectrum policies that hold us back. European and Asian governments know that America’s current dominance of the Net is rooted in the pathways that make up the Internet; their strategy for passing us is to build the next generation wireless pathways, fast.

American citizens and entrepreneurs are on the short end of the spectrum stick. Look what our commercial competitors have made available for wireless applications --Japan: 300MHz; United Kingdom: 364 MHz; France: 395 MHz. In the United States we are stuck at 189 MHz.

In an effort to alleviate this shortfall, the Congress instructed the FCC to auction channels 60-69 of the spectrum the broadcasters committed to return to the people by 2006. Now, as your speech points out, the broadcasters are finding reasons to hang on to those airwaves (your “squatter” term seems most appropriate). Trying to have it both ways some of those broadcasters are also saying they would agree to sell the spectrum they were given for free and promised to return. Your leadership in calling this outrage to the attention of the nation is an important step. American consumers and American entrepreneurs can’t be left watching reruns of a spectrum policy that benefits squatters over services. Now, more than ever, we need a spectrum plan that assesses how this valuable commodity can best be put to work in the Information Age.

Very truly yours,

Thomas E. Wheeler

Wheeler wrote a letter to Kennard in which he stated that "The rest of the world is building the pathways for the next generation Internet - a wireless Internet - while American consumers and entrepreneurs are encumbered with spectrum policies that hold us back."

Broadcasters, in turn, have blamed the FCC for the slow roll out of DTV. For example, when the FCC adopted rules on September 14 for the labeling of digital television receivers to insure that consumers will be fully informed about the capabilities of digital TV receivers to operate with cable television systems, the National Association of Broadcasters (NAB) criticized the action.

It stated: "Despite the best efforts of broadcasters, digital television’s potential remains unfulfilled in part because of FCC inaction on several critical issues. Today’s FCC proposal to add additional regulation to a service still in the embryo is regrettable."

Kennard also recommended that Congress pass legislation to do three things:

  • "Congress should reconsider the 85% loophole on the 2006 date, so that it doesn’t become used as a "trick number" to justify making the double dose of spectrum a broadcaster entitlement for the next twenty-five years."
  • "Congress should direct the FCC to adopt a requirement that, by a given date – say January 1, 2003 - all new television sets include the capability to receive DTV signals."
  • "Congress should require that, as of January 1, 2006, broadcasters will pay a fee for the use of the analog channel. This "spectrum-squatters’ fee" would escalate yearly, until broadcasters complete their transition to digital and return the analog spectrum to the American people."

Kennard also had harsh words for the broadcasters for their coverage of elections.

"We call ourselves the greatest democracy in the history of the world, and we undoubtedly are," said Kennard. "But, frankly, the disarray and disinterest of our mass media towards fulfilling its crucial democratic commitments give me serious pause."

"For fifty years, the solemn public interest commitment of broadcasters, borne of their role as public trustees of the airwaves, has deteriorated in the face of financial pressures and an increasingly competitive marketplace."

Kennard added that "we reached a new low last week, when two of the four major networks – NBC and Fox -- chose to preempt the first debate of the most hotly contested Presidential election in four decades for sports and entertainment programming."


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