Unlicensed to Kill Competition?

High Stakes Battles Over Control of the Digital Future

BY KAILIN CLARKE

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Illustration by Eric Drooker (drooker.com)
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There are few aspects of American life more universal than basic analog broadcast TV. TV's love is maternal. It claims to love us all equally, lulls us to sleep, and is always there when we need it. One bitter day three and a half years from now, though, we will witness the negation of this maternal love. The Senate Commerce Committee passed legislation on October 20 to make April 7, 2009 the deadline for broadcasters to go completely to digital television (DTV). Americans unable to afford new TVs or even $50 converter boxes will see their nurturing screens go dark. Thank goodness this is scheduled to happen the day after the Final Four N.C.A.A. basketball tournament, which, by the way, is no coincidence.

The transition to digital has been in the works for over a decade now, during which time Congress gave broadcasters spectrum licenses —licenses that give the owner the exclusive right to broadcast over a range, or "spectrum," of frequencies. The U.S. government will be able to auction those spectrum licenses once used by broadcasters for analog channels to mainly wireless high-speed Internet services and public safety agencies. Most of the money raised, which should be between $10 and $30 billion, would be used to cover a tiny part of our ballooning federal debt.

Forcing people to buy new sets or converter boxes is not the largest controversy surrounding the bill. A less cut-and-dry question is what to do with the "white space" that currently exists between DTV channels. Proponents of media reform argue that the availability of unlicensed spectrum would make wireless broadband (high-speed Internet service) more affordable to deploy, benefiting consumers, public safety agencies, and small businesses.

If unlicensed spectrum is made available, it might eventually mean that all households will have the option of cheap, though probably lower quality, high-speed Internet access provided by municipal broadband programs. High-speed wireless Internet service companies protest this added competition. Public sector broadband, they say, would be anti-competitive. According to prominent technology writer Aaron Weiss in a feature article published in netWorker entitled "The Battle for Broadband," the outcome of these battles will "not only affect the type and quality of broadband available in the U.S., but the very sovereignty of cities, towns, and counties throughout the country."

Let's Hear That Dirty Word: Subsidy!

The drive to switch to DTV is not just a response to our federal debt but also to very costly breakdowns in communication in New York after 9/11 and in New Orleans after Hurricane Katrina.

According to Broadcasting and Cable, a digital news publication, the DTV transition could alleviate some of the problems involved in these breakdowns and exacerbate others. The hope is that public safety officials will be able to use some of the spectrum previously used for analog TV channels, spectrum of much higher quality than AM or FM radio, to announce emergencies. The worries are twofold: first, that unless Congress mandates it there will be no handheld TVs that get digital signals; and second, that the populations hardest hit by natural disasters, low-income residents, are the same people most likely to need a subsidy in order to afford the switch to digital, and without a subsidy many would lose access to digital signals and therefore be oblivious to an emergency.

Perhaps no one is happier than the equipment makers. Consumers and subscription television services will be forced to buy equipment upgrades, and then there is the potential for greater use of wireless Internet products and services.

In poorer cities and in many rural areas, a significant number of low-income families will not be able to afford the switch. So while there already existed an earlier law from July, requiring broadcasters starting Dec. 31, 2006 to complete the switch early in markets where 85 percent of homes receive digital signals, the new legislation making 2009 the absolute latest date reveals Congress's awareness that even in that year there are bound to be many places where far less than 85 percent of homes are ready. Lawmakers are debating the necessary subsidies of the purchase of $50 converter boxes so that even low-income families can make this switch.

A House bill chose to allocate $1 billion to subsidies and a Senate bill allocated $3 billion. Since both bills passed, a joint committee is now discussing it. Rep. Rick Boucher (D-Va.) argues, along with most other Democrats, that $1 billion is inadequate, saying it would either allow consumers to purchase converters at only $10 less, or would only take care of some 20 million TV sets out of the 73 million analog sets in homes today.

Fanning The Flames Of Revolution

In a letter written to the Senate Commerce Committee last month (see commoncause.org), a diverse set of more than 20 consumer, public interest and media reform groups including Common Cause argued that if spectrums corresponding to a few unused DTV channels and the "white space" between DTV channels are set aside for unlicensed use by the FCC, "low-income, minority and rural households have both universal and affordable high-speed Internet access."

According to Aaron Weiss's article, per capita broadband access in the U.S. has fallen from 3rd to 16th in the world as of January 2005. Part of the reason is that private telecommunications companies sell broadband access only in markets where they stand to make the largest profits. More availability of unlicensed spectrum would allow municipalities to more easily construct wireless services for all their citizens. Such services are either free, paid for by the tax base, or offered at break-even rates, so they are far more affordable than private broadband access. According to the letter, this shift would improve our ranking and help our long-term global competitiveness.

The letter cites places like Philadelphia where city government is frustrated with slow and uneven deployment of broadband by private companies and has already decided to deploy municipal broadband using WiFi technology. Philadelphia's plan, begun late in fall 2004, is the largest plan yet and has had to overcome serious legal challenges. Verizon, worried about such deployments, had pushed a telecommunications bill through the state legislature earlier that fall that required any Pennsylvania city or town to ask Verizon's permission before deploying their own broadband network. Philadelphia negotiated a waiver with Verizon later that fall, but the rest of Pennsylvania is still "ruled" by Verizon. Understanding the gravity of the situation, telecoms have since gotten anti-municipal-broadband bills passed in 14 states and are working on such bills in several other states.

These cities and towns are already able to deploy wireless broadband because they are using the 2.4 GHz WiFi band. However, the spectrum available from DTV channels and DTV white space are high-penetration frequencies below 700 MHz, which take a third of the cost to deploy, and offer a much higher quality of service, especially indoors.

The Competitiveness Of Public Versus Private

Critics have recently a rhetorical smackdown on the very concept of public sector broadband service. Many critics say that, regardless of whether the municipality will offer free access supported by taxes or offer break-even rates, these plans will give an unfair advantage to the public sector and undermine the free market.

Other critics, like Verizon CEO Ivan Seidenberg, choose to focus on technological limitations. In response to San Francisco's 2004 announcement that it would create a municipal WiFi network, Seidenberg told the San Francisco Chronicle, "That could be one of the dumbest ideas I've ever heard. The trouble is someone will have to design it, someone will have to upgrade it, someone will have to maintain it, and someone will have to run it."

He has a point. Municipal broadband, in general, will probably be a slower, less dependable alternative to DSL or cable offerings. In large cities like Philadelphia, the project will involve private bids on building and may go on forever like Boston's Big Dig. However, even if the public sector lacks the ability to manage a successful broadband network, the push for public broadband alone has, in some areas, spurred competition and expanded service. Thus the fact that these proposals face technological limitations negates the claim that private businesses will lose a market. One criticism disproves another.

Stanford professor and digital rights activist Lawrence Lessig also rebuts the free-market argument by pointing out that the public sector competes with the private all the time. Examples include municipal buses vs. taxis, libraries vs. private bookstores, or even public water fountains vs. bottled water. Municipal broadband service, it seems, will fall into this paradigm as long as its quality is lower than that of private broadband service, which is what we expect.

If Congress decides not to make more unlicensed spectrum available, we may be left with the choice between, as Weiss puts it in his article, "shoddy, universal public access" and "expensive, limited-access private service." One's income usually correlates with the sector one is more likely to utilize for these goods or services. Citizens with low incomes generally drink more public water and less bottled than those with high incomes. However, just as there are minimum standards for water quality, there may need to be minimum standards for wireless broadband quality that cannot be met without the use of this coveted unlicensed spectrum. In the weeks to come, a joint House-Senate committee will be implicitly weighing the concerns of private businesses with those of our low-income citizens.

Kailin Clarke B'07 thinks the World Wide Web will be the next big thing.

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