October 9, 2000

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Spectrum Squatters


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WASHINGTON What powerful special interest strikes terror in the heart of both parties in Congress, and turns both Al Gore and George Bush into quavering sycophants?

In terms of ripping off the taxpayers with not a peep from the media, nothing compares with the broadcasters' lobby. This phalanx of freeloaders has stolen the free use of great chunks of the most valuable natural resource of the information age: the digital television spectrum owned by the American people.

Five years ago, despite warnings of John McCain, Bob Dole and former F.C.C. chairman Reed Hundt, NBC, ABC and CBS pulled a bait-and- switch. Because their analog spectrum, a gift to them from the past, was outdated, they demanded a lion's share of the new, digital bandwidth.

When a few of us suggested that this national resource be opened to competitive bidding rather than given away, the broadcasters insisted that the airwaves were their entitlement. With a gift of the new spectrum, they promised to deliver free TV broadcasts on high-definition television.

The Republican Congress and Clinton White House promptly doubled the broadcasters' bandwidth a freebie estimated then at $70 billion, now worth far more.

Worse, the lobby was told it could keep making money on its old analog portion of the spectrum until 2006 or until 85 percent of American homes had digital TV, whichever was later. But it took over 20 years for color TV and 16 years for video recorders to reach that level of market penetration. That's like giving the broadcasters squatting rights on the digital spectrum for decades to come.

Result of Congress's foolish and craven gift of such a cost-free option? Broadcasters have been sitting on their hands, delaying new development and looking for ways to use the new spectrum for profitable cell phones and wireless e-mail, which has nothing to do with broadcasting the promised free digital TV.

Meanwhile, cable and satellite companies, having invested heavily in digital technology, provide the new wares to consumers but at a high price. U.S. taxpayers, who invested $70 billion of spectrum value in broadcasters to get free digital TV, are forced to wait for decades. Lesson: When private money is on the line, private companies move fast; but when public assets go to private pockets, at no interest, private companies sit tight.

William Kennard, chairman of the F.C.C., uses a homely analogy about spectrum squatters: it's as if Congress gave each broadcaster two rent-controlled apartments on Manhattan's Upper West Side, and the broadcaster occupied one while leaving the other empty.

What's the F.C.C. to do when Congress and the White House refuse to say "use it or lose it" to the squatters and thereby let a lobby threaten the U.S. lead in new technologies? To speed our transition to free digital TV, Kennard will mount the bully pulpit in a New York speech tomorrow.

He'll call on Congress to require that all new TV sets be DTV-capable in two years. High volume would not only lower the price of receiver chips to manufacturers but also stimulate consumer demand for the improved images which, in turn, would provide the profit incentive to broadcasters to get off their duffs.

Then the F.C.C. chairman will urge Congress to close the 85 percent loophole that now turns the double dose of spectrum into a generation-long broadcasters' entitlement to corporate welfare.

Then he'll suggest requiring a fee after 2006 for the use of the old analog channels. "This `spectrum squatter's fee,' " says Kennard, "would escalate yearly, until broadcasters complete their transition to digital and return the analog spectrum to the American people." That would light a fire under the networks and even encourage debates at public-dispirited NBC.

Although the subsidized industry's legion of lobbyists will lash back in fury, now's the time to ask: How will Al Gore, the professed populist, handle this hot potato? Where stands George Bush, who would probably appoint the F.C.C. commissioner Mike Powell, Colin's son, to the chairmanship?

Let's find out if either candidate would propose legislation to stop the giveaway and to sell or lease the public's spectrum thereby bringing free broadcast digital TV to average Americans. Or would both let the huge ripoff roll?

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