Both houses of Congress passed a bill today that could give Americans access to more of the wireless spectrum; however, this access will cost us some free broadcast TV stations.
If you search for some kind of appropriately named piece of legislation like the “Open up more wireless spectrum so my iPhone browser will load faster act”, you won’t find it. That’s because the bill Congress passed was actually an extension of the payroll tax, which essentially lets people keep more of their paycheck by removing some of the standard taxes.
To pay for this extension, Congress needed a new source of income. That’s where the TV spectrum comes in.
The bill is setting up a voluntary auction for the block of spectrum currently reserved for television broadcasts. Many of the owners originally granted a license for their part of the spectrum are getting a pretty good deal; they paid very little money compared to what it’s now worth on the open market.
To give you some kind of understanding of the spectrum’s value, the 2008 auction for wireless spectrum ended up bringing $19.6 billion, with more than $16 billion of that coming from AT&T and Verizon. Verizon is also poised to pick up a large chunk of wireless spectrum from Comcast, Time Warner Cable, and Bright House Networks for a cool $3.6 billion (pending approval by the Department of Justice).
So clearly, we’re talking about a lot of money here, of which the U.S. government will get a hefty cut.
Despite the FCC’s countless pleas to make more spectrum available, Congress has mostly neglected to address the issue directly. The payroll tax extension is more or less seen as a way to kill two bird with one stone. And that’s both a good and a bad thing.
The good thing about this auction is wireless carriers will be able to speed up their networks, expand coverage area of high-speed internet to rural areas of the country, and (in turn) create more jobs.
The bad part about this legislation is that it has the potential to sacrifice some the broadcast TV channels that are barely starting to get used by tech companies as a valuable public resource.
For instance, Boxee just launched a Live TV stick, which feeds the HD TV broadcast signal into the company’s Boxee Box set-top box, thus providing owners with a way to both cut the cord and still get some live content like local news and sports. There’s also recent Barry Diller startup Aereo, which uses tiny HD antennas (one per user) to stream the broadcast TV content thru a variety of connected devices.
While I welcome the additional spectrum availability, part of me wonders whether it would have been better for Congress to directly address the issue rather than issuing a voluntary auction to pay an immediate bill like the payroll tax cut extension.