Edward Wyatt and Jennifer Steinhauer, “Congress Will Auction Public Airwaves to Pay for Benefits,” New York Times, February 17, 2012

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Cited Article

Edward Wyatt and Jennifer Steinhauer, “Congress Will Auction Public Airwaves to Pay for Benefits,” New York Times, February 17, 2012

Cited Quote

“The measure would be a rare instance of the government compensating private companies with the proceeds from an auction of public property — broadcast licenses — once given free.”

My Comment (the comment can be found at nytimes.com here)

Yes, Congress, the President, and the broadcast/media lobby are calling this an “auction.”  And yes, there is an auction.  And yes, some of the auction receipts will go into the public treasury.  And yes, this will repurpose spectrum to much more valued public uses.  But what this really is, if you read and understand the implications of the fine print, is a very cleverly designed giveaway of tens of billions of dollars worth of public assets to the powerful broadcast/media lobby.   We’ve all heard of bills that are presented publicly  as in the public interest but are in fact special interest giveaways.  This is one of the great classics of that Orwellian, doublespeak genre.  Indeed, it may be the largest example of such a Congressional giveaway so far in the 21st century.  But it’s been brilliantly constructed, offering members of Congress lots of room for plausible deniability.   The million dollar a year lobbyists who framed and packaged the “incentive auction” part of this legislation probably deserve a bonus, maybe even a billion dollar bonus, which would still only be a small fraction of what they’ve earned for their clients.

Brendan Sasso, “Google, Microsoft push for FCC flexibility in spectrum auctions,” The Hill, February 13, 2012

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Article

Brendan Sasso, Google, Microsoft push for FCC flexibility in spectrum auctions, The Hill, February 13, 2012

Quote

” Walden, who is chairman of the Energy and Commerce’s telecom subcommittee, said his spectrum bill ‘simply says that the FCC cannot spend taxpayer funds to clear additional spectrum and then give away that billions of dollars worth of spectrum. Taxpayers deserve a return on their investment.’”

 Comment

Talk about Orwellian doublespeak: this is a classic case of the pot calling the kettle black. Walden is structuring the auction so that broadcasters will receive a huge spectrum windfall at taxpayer expense. Then he invents a new definition of windfall so he can accuse advocates of unlicensed spectrum of doing what he is doing. Chutzpah! But given how many times his soundbite has been reprinted in the press without challenge, he appears to have gotten away with it.

John Eggerton, “Walden: Unlicensed Is Important, But FCC Should Not Give Away Billions,” Broadcasting & Cable, February 9, 2012

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Article

John Eggerton, Walden: Unlicensed Is Important, But FCC Should Not Give Away Billions, Broadcasting & Cable, February 9, 2012

Quote

“Communications Subcommittee Chairman Greg Walden (R-Ore.), said he was for unlicensed spectrum too, but not for the FCC giving away spectrum.”

 Comment

Talk about Orwellian doublespeak: this is a classic case of the pot calling the kettle black. Walden is structuring the auction so that broadcasters will receive a huge spectrum windfall. Then he invents a new definition of windfall so he can accuse his opponents of doing what he is doing. Chutzpah! But I don’t doubt that it will work.

Brandan Sasso, “Dozens of lawmakers call for more unlicensed spectrum,” The Hill, February 9, 2012

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Article

Brandan Sasso, Dozens of lawmakers call for more unlicensed spectrum, The Hill, February 9, 2012

Quote

“The bill’s sponsor, Rep. Greg Walden (R-Ore.), argues the government should not pay to reclaim airwaves that it will then give away for free in the form of unlicensed spectrum.”

 Comment

Talk about Orwellian doublespeak: this is a classic case of the pot calling the kettle black. Walden is structuring the auction so that broadcasters will receive a huge spectrum windfall. Then he invents a new definition of windfall so he can accuse advocates of unlicensed spectrum of doing what he is doing. Chutzpah! But I don’t doubt that it will work.

Craig Aaron, “When Whinosaurs Attack!,” Huffington Post, February 7, 2012

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Article

Craig Aaron, When Whinosaurs Attack!Huffington Post, February 7, 2012

Quote

“[Y]hese whiny media dinosaurs — or whinosaurs for short — have no shame.”

 Comment

Yes, but it takes two to tango. Without Congressional support, the broadcasters’ whining would have long ago fallen on deaf ears at the FCC. This is where Free Press falls short. It’s willing to complain about the broadcasters and occasionally the FCC, but it’s not willing to get at the root of the problem, which is Congress, including some of its closest Congressional allies such as Reps John Dingell and Edward Markey, and Senators Rockefeller and Kerry. Of course, the Republicans are just as much in the pocket of the broadcasters as the Democrats on this issue. But Free Press cannot very well go after the Republicans when there is no light between them and the Democrats on this issue. When Free Press is willing to go after both Democrats and Republicans on this and related bipartisan issues in conflict with the public interest, I’ll stand up and applaud. Until then, it’s not much more than bloviasauring.

Gordon Crovitz, “Spectrum Dinosaurs at the FCC,” February 6, 2012

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Article

Gordon Crovitz, Spectrum Dinosaurs at the FCC, February 6, 2012

Comment #1

Title: Spectrum Pigs at the WSJ

The disconnect between the Wall Street Journal’s spectrum advocacy on behalf of its parent company, the News Corp., and its public policy pretensions in this commentary, are simply astounding. Nowhere is it acknowledged that the News Corp. has huge broadcast TV spectrum holdings that would increase in value by billions of dollars if the proposed Congressional/FCC “auction” takes place. Nowhere is it acknowledged that the “auction” really isn’t an auction in the way it is presented here because the proceeds will overwhelmingly go into the pockets of the WSJ/News Corp., not the public; anyone who argues otherwise needs to carefully read the legislation and parse the many Congressional hearings and markups on this subject.

Rupert Murdoch (owner of the WSJ and News Corp.) has consistently been one of the most aggressive (and successful) lobbyists for spectrum giveaways to News Corp (e.g., see my book, Speak Softly and Carry a Big Stick: How Local TV Broadcasters Exert Political Power).. And his corporate lobbying position is mimicked here. At the very least, the WSJ, as a matter of journalistic ethics, should acknowledge in this and similar op-eds its parent company’s huge business interest and lobbying activity in the proposed auction of its spectrum licenses. Given the gross magnitude of its conflict of interest, disclosure is probably too embarrassing an option. So its practical options are probably either to merely ignore the issue or write about it without disclosure. To its discredit, it has clearly chosen the latter approach. Shame on it and shame on any other news outlet with broadcast holdings that acts in a similar way.

 Comment #2

Reply to a reader’s comment seeking clarification:

The way broadcast incumbents acquire additional public spectrum rights without compensation to the rights holders (the public) is complicated, and I explain it in my book and also, to a lesser extent, at SpectrumBS.info. Here I can simplify it quite a bit; just remember it is a simplification.

Broadcasters are currently licensed to use a chunk of spectrum for broadcast purposes. The market for spectrum is such that a license to use spectrum for mobile broadband purposes is worth an order of magnitude more than a license to use spectrum for broadcast purposes. This change in license terms is akin to a change in a property’s real estate zoning from low density residential to high density commercial in a commercial area. The incentive auction is structured so that the broadcasters will receive all or substantially all of this windfall. This conflicts with the Communications Act, which prohibits spectrum windfalls, and it also embarrasses Congress, which is embarrassed to give huge amounts of corporate welfare (the spectrum windfall) to some of the wealthiest individuals and most profitable corporations in America. The result is a lot of political posturing and Orwellian type misinformation to the public. This so-called “auction” isn’t about the government staying out of the marketplace; it’s about the government giving a vast amount of public assets to private entities without public compensation (i.e., what should be called “corporate welfare”).

Waldman, Steven, “Local TV Stations Rally to Oppose Media Transparency,” Columbia Journalism Review, January 26, 2012

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Article

Waldman, Steven, Local TV Stations Rally to Oppose Media Transparency, Columbia Journalism Review, January 26, 2012

 Comment

It has often been observed that those who don’t study history are doomed to repeat it. For more than forty years the public interest community has been trying to get the broadcast industry to have greater transparency regarding its media archives. For some of the early history, see my May 2000 article published in the Harvard International Journal of Press-Politics: “Local TV News Archives as a Public Good.” Unfortunately, it is simply not in the self-interest of broadcasters to face this type of accountability. And given that the public interest community is politically weak, politically naive, generally blissfully ignorant of history, and often more interested in do-good headlines than actual results, the broadcasters win time and again regardless of how poor are their public policy excuses. It’s a sad story. Hopefully, it won’t be repeated yet again. But I wouldn’t bet on it.

An Introduction to Broadcast Band Bullshit

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I’ve been following public policy debates over the TV broadcast band for several decades and have often been amazed by how much of it is bullshit and how so many insiders know that it is bullshit but never publicly call it out.  By bullshit I don’t mean lying, which assumes that a person knows or cares about the truth.  As Harry Frankfurt writes in On Bullshit, “It is just this lack of connection to a concern with truth—this indifference to how things really are—that I regard as the essence of bullshit.”

The parable of the Emperor’s New Clothes captures the central political logic of bullshit.  All the adults (read members of Congress and FCC officials) know that the assertion that the emperor (read broadcast lobby) is wearing clothes (are intellectually serious in their claims) is bullshit, but it isn’t in their self-interest to call this out publicly.  Given the terror with which members of Congress and other politicians view their local broadcasters, who control their message and the message of their opponents, the analogy to an emperor appears apt.

However, the analogy breaks down in two ways.  First, it downplays how much valuable information about power rather than truth the bullshit can convey.  The broadcast bullshitter is actually providing policymakers with extremely useful information, just not necessarily about the truth.  The bullshit functions as code to tell policymakers what fault lines they must not cross and what public arguments they must not use if they want to continue in office.   This is useful stuff, which helps explain why policymakers have an endless appetite for such bullshit.

Second, the analogy assumes that the bullshit is self-evident to an uninformed observer such as the child.  A closer analogy might be shrewd lobbyists who listen with effusive admiration to a U.S. Congressman spouting one insincere platitude after another.  Here the observant child would need background information to detect the bullshit.

This blog aims to provide that background information.  I intend to post on it rarely–only when the bullshit meter has moved far into the red zone.  Many months may go by without a post.  But if there is one thing I’ve learned from studying broadcast band politics over the decades, broadcasters will continue to dish out this bullshit as long as Congressional and FCC policymakers have an endless appetite to consume it.

Despite the above, I hope to release several bullshit analyses per week leading up to the FCC’s February release of its broadband plan.  Here is the current agenda.  The first two analyses accompany the launch of this blog.

[April 1, 2010 update: Obviously, I didn't follow through with my original game plan to release bullshit analyses; instead, I have let the flow of media articles dictate my commentaries.  Nevertheless, I'm keeping the bullshit list below because I believe it has some use.]

1)      Free TV is free.

2)      Broadcast TV is efficient.

3)      TV broadcasters are committed to TV broadcasting.

4)      Broadcast TV is a technology leader.

5)      The best way to save broadcast TV is to kill it.

6)      TV broadcasters will sacrifice profits to protect consumer investment in broadcast TV equipment.

7)      TV broadcasters object to FCC official Stuart Benjamin’s arguments based on economic reasoning.

8)      TV broadcasters provide close to $10 billion in public service announcements each year as public compensation for their spectrum.

9)      TV broadcasters provide a meaningfully “local” service based on the information needs of a democracy.

10)  TV broadcasters want to engage in a serious discussion about the future of the broadcast TV band.

For my earlier writings on the politics of the broadcast band, including my book, Speak Softly and Carry a Big Stick: How Local Broadcasters Exert Political Power, see the entries on the side of this blog.

–J. H. Snider

Broadcast Bullies?

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(Update: on February 24, 2010 Representative Walden announced he was stepping down from the House Commerce Committee, thus mitigating any conflict of interest he might have in championing the broadcast industry’s cause in Congress.  See John Eggerton, “Former Broadcaster Walden Takes Leave Of Absence From Key House Committee,” Broadcasting & Cable, February 24, 2010.)

The relationship between Oregon broadcasters and their local members of Congress may not be what it appears to be.  Journalists should report on it, and new public policies should be implemented to facilitate their doing so.

Now that the TV broadcast industry has once again not only dodged any accountability for its gross misuse of the public’s spectrum, but also positioned itself for yet another huge spectrum windfall, it’s time for some enterprising reporter to explain how this feat was pulled off.  If journalists can cover the GM bailout in depth, surely some attention should be given to the much larger giveaway to the broadcast industry—not to mention the incalculable harm to the American people through the accompanying delay in the provision of much needed wireless broadband service.  I suggest a good starting point for investigation might be the relationship between Oregon’s local broadcasters and the politicians they cover (and intimidate).

A Preface on Broadcaster Power

Why do public officials from both political parties fear to ask the most obvious questions concerning broadcasters’ inefficient use of a public asset worth more than $150 billion?  Why is it that again and again public officials’ only policy response to the misuse of this public asset is to suggest that more of it be given to the broadcast industry, which includes some of the largest and most profitable companies in the world?  I suggest that intimidation by local broadcasters may be the answer.

How do broadcasters intimidate members of Congress?  It’s certainly not as a result of the quality of their arguments (the subject of which is the main focus of BroadcastBandBullsh?t.info).  In my judgment and the judgment of many others, it’s a result of local broadcasters’ ability to serve as a gatekeeper between members of Congress and their constituents  (for details, see my book: Speak Softly and Carry a Big Stick: How Local TV Broadcasters Exert Political Power).  But not all local broadcasters are equally aggressive or effective in using their control over media to intimidate politicians.  What I’m suggesting here is that if one wants to understand the current processes by which local broadcasters’ intimidate politicians with the goal of erecting barriers to competition and winning vast giveaways of public resources at public expense, Oregon might be a good place to investigate.

Why Oregon?

Two easy to observe and verify facts that stick out about the relationship between Oregon broadcasters and politicians are that 1) the current president of the National Association of Broadcasters, Gordon Smith, was a former U.S. Senator from Oregon, and 2) today’s most outspoken member of Congress on behalf of broadcasters, Representative Greg Walden, was a former broadcaster.  This hints at a private relationship between Oregon’s local broadcasters and members of Congress that, if exposed to light, would cause shame.

Gordon Smith. The president of the National Association of Broadcasters (NAB) serves as the bully-boy-in-chief  for the local broadcasting industry.  Smith came to the job soon after he left office as U.S. senator from Oregon, a job he won after serving as a U.S. representative from Oregon.  Smith didn’t get appointed to be NAB’s head because of a newfound religion supporting free TV.  He got the job, in part, because his work on behalf of local broadcasters as a member of Congress demonstrated to broadcasters that he could be trusted.  Since Smith served on the committee that oversees broadcasters, the broadcasters had plenty of information to go by.  In an interview with the broadcast industry trade press, Smith himself summarizes his relationship with local broadcasters as follows: “I fell in love with broadcasters as a member of the Senate Commerce Committee.”     But why would Smith, a free market conservative, fall in love with an industry that devotes most of its lobbying firepower arguing on behalf of anticompetitive regulations and government handouts for the TV broadcast industry?

Did Smith receive loads of contributions from the local broadcast industry?  Did broadcasters in his political district mobilize a grassroots army on his behalf?  These are the usual explanations when a member of Congress acts against his own ideological principles on behalf of a well-organized and resource rich interest group.   But local broadcasters have a reputation for being campaign contributor cheapskates and shunning the game of grassroots politics.  These explanations thus fail to explain Smith’s inconsistency.

Greg Walden. Walden, a Representative from Oregon who serves on the committee responsible for overseeing broadcast industry regulations and public subsidies, has recently become the broadcasters’ bully-in-chief within Congress.  Walden, like Smith, is a free market conservative taken to mouthing the sacred wonders of free TV.   How can this inconsistency be explained?  Again, local broadcaster campaign contributions and grassroots support don’t appear to be of much help.   The fact that sticks out for Walden  is that he inherited a chain of rural Oregon radio stations from his dad.   Walden Sr. was a state representative and broadcast station owner before Walden Jr. began his political career.  Walden Jr. also started as a state representative and then was elected to Congress in 1998.  In 2007, he sold his chain of radio stations for $2.8 million at the peak of the market.  Did the radio stations bolster both Walden, Sr’s and Walden, Jr’s political careers?  If so, how?  The major impact of Walden Jr’s sale of broadcast stations is that he now appears emboldened to come out publicly as a champion of broadcast industry interests.  Previously, he seems to have been worried that such public statements would be criticized as s conflict of interest.

Other current House members who served either as broadcast reporters or owners include Dan Maffei (D-NY), Parker Griffith (D-AL), Mike Pence (R-IN.), and Harold Rogers (R-KY).

What we have with Walden and Smith is the appearance of a crack in the firewall between media interests and political activity, with Walden wearing the hat of media owner and political advocate simultaneously and Smith sequentially (although in Smith’s case, he is serving as chief lobbyist for the broadcast media industry, not as an owner). Walden’s radio stations were covering public affairs while Walden was pursuing a political career, while Smith went from being covered by local broadcast stations to serving the owners of those stations.

Broadcast Politics in Small vs. Large Markets

Oregon has the classic TV market configuration that bolsters the political power of local broadcasters.   As a rule, as the ratio of  members of Congress to local TV markets decreases, the power of local broadcasters increases.  This is because small market TV stations can cover local members of Congress and their political opponents in much more depth without alienating their audiences.  This, in turn, leads to a more symbiotic relationship between members of Congress and local broadcasters.

The Oregon delegation to Congress has seven members, including two U.S. Senators and five representatives, spread out over multiple local TV markets.   Contrast this to the New York City metropolitan area, which covers 33 U.S. House districts and 6 U.S. Senate districts (New Jersey, which overlaps the New York City and Philadelphia TV markets, doesn’t even have a single exclusive local TV market).   As a result, the ratio of members of Congress to local TV markets is approximately ten times higher in New York City than Oregon.

Often, the only way a U.S. representative in the New York City metropolitan area can get on his local TV station is by being the center of a career threatening scandal.  Those living in the other 32 U.S. House districts just aren’t interested in hard news about another district’s representative unless it is salacious.   The result of this situation is that in big markets a local representative is less likely to slobber over his local broadcasters because he knows he’s unlikely to get coverage for doing anything either good or bad.  In rural markets, the relationship between local broadcaster and representative tends to be much more intimate.  They see each other quite frequently at the TV station, local chamber of commerce, and other local events; the local representative sends TV footage to the local stations and expects to often get it aired; depending on the whim of the local TV station owners, candidate debates may or may not be televised (incumbents almost always prefer not televised); local stations might offer Sunday morning public affairs talk shows that regularly feature the local representative and ask softball questions; local candidates may take out a lot of  local TV advertising, want the best placement, and a heads up on their opponents’ ads (whereas in large markets such as New York City, candidates will view political ads as a waste of money because more than 95% of the audience won’t be constituents); and a non-news employee of a local TV broadcaster may be a valuable part of the representative’s campaign team (broadcast ad salesmen may be excellent fundraisers because of their close links to local businesses).   In short, in relatively small TV markets such as Oregon, local TV broadcasters tend to have more political clout.

An Investigative Strategy

Nailing down how local broadcasters use their control of the airwaves to intimidate members of Congress is difficult and not susceptible to the usual methods used by investigative journalists and academics.  Publicly disclosed government ethics reports, including campaign contributions, gifts, and professional lobbying have no bearing on this type of influence.
Moreover, broadcasters are too smart to leave a smoking gun behind.  The law doesn’t mandate that they have to, so why should they?

But here is one investigative strategy that might bear fruit.  First, the standard of evidence for evaluating intimidation must change.  The standard should not be a smoking gun but merely the appearance of improper influence.  This is the standard we use for judging the ethics of elected officials; it should also be the standard we use for judging the ethics of broadcast executives.

Second, I suggest that passionate, one-sided, and self-serving arguments presented to members of Congress by local broadcast executives with control of news coverage should be accepted as evidence of intimidation.   Local broadcasters rarely present such views publicly, on-the-record, but their paid bully-boys, including the NAB and trade publications, do.  Unless they specifically and publicly disagree with the positions of their paid representatives, it should be assumed that they hold similar positions and have expressed them during their lobbying contacts with their local Congressional representatives.

Third, I suggest using local broadcasters’ annual lobbying blitz on Capitol Hill as a test case.  Every year local broadcasters, like many major interest groups, come to Washington, DC to blitz the Hill.  This consists of local delegations of broadcasters from each state meeting with local members of Congress in their broadcast coverage areas.  In many offices, the member of Congress will pull out the red carpet for the broadcasters–as if the Pope were visiting.   The difference is that when the Pope visits a head-of-state, the visit gets a lot of publicity.  But when senior local broadcasting executives meet their representatives, it’s done purely in the backroom.

What goes on in those backrooms?  Often a combination of two things: 1) the broadcasters ask for news items they might broadcast on their local stations, and 2) they explain their legislative agenda.   I have no reason to believe that there is ever an explicit quid pro quo between those two activities.  But the point is that the appearance doesn’t look good for either the local broadcaster or member of Congress, so both sides treat it with about as much transparency as an adulterous affair.

Remember, the broadcasting industry isn’t just any industry lobbying for special favors.  It controls the most influential political medium for members of Congress, and it’s an industry that presents itself to the public as upholding the values of journalistic independence.   According to standard press codes, journalists and those who control the news aren’t supposed to lobby.  Period.   Meanwhile, it is well understood that members of Congress obsess over media coverage like a young adolescent pining after the most beautiful girl in the class.    So whether or not there are any quid pro quos in those meetings (as in, “we’ll cover your pet project and give you an insurance policy on negative coverage if you’re our friend”), the appearances are awful, and the broadcasters and members of Congress know it.

It’s my hunch that the combination of the red carpet treatment and secrecy about it is vividly illustrated in the Oregon Congressional delegation, especially for members on committees with jurisdiction over local broadcast industry interests.  So why not do a little investigation of the information exchanges that take place during those meetings?  These exchanges also often take place when local representatives visit their local stations for interviews or otherwise see their local broadcasters at community events.   But the annual blitz is concentrated in time and space and should be easier to investigate in some systematic way.  The next blitz is scheduled for March 3-4, 2010.  Just identifying the participants and separately asking them for their different accounts of what was discussed and how it was discussed could be quite revealing.

Public Policy Recommendation

Here are two public policy recommendations to make it easier to bring sunlight to the type of aggressive lobbying done by local broadcasters.  The first involves making the broadcasters’ media lobbying more transparent; the second involves making broadcasters’ non-media lobbying more transparent.

Extend the lessons of Citizens United v. Federal Election Commission. After the Supreme Court’s Citizens United case allowing unlimited corporate media campaigns on behalf of candidates, there has been great pressure to require more corporate disclosure of such activities.   Why not extend the same obligations to broadcasters, who exert their power not by spending money on others’ media but by using their own media to intimidate enemies and reward friends?   One way to do this would be to require better archives of broadcast industry programming.  Currently, online access to broadcast public affairs programming records is abysmal (see J.H. Snider, “Local TV News Archives as a Public Good,” Harvard International Journal of Press-Policy).  If broadcasters won’t provide easy access to their own records of candidate and issue coverage, then the copyright laws should be changed to allow others to do so.   Today, broadcasters make a simple calculation.  Making the records easily available makes them more accountable, exposing them to libel and other unwanted economic liabilities.  On the other hand, the economic gains from the sale of old public affairs programming is negligible.  So the economic calculus has strongly favored tightly controlled and inaccessible public access to broadcast records.  What is missing from this economic calculation is democratic accountability, which is why the law should be changed to facilitate holding broadcast stations accountable for their use of the airwaves to help friends and punish enemies.

Extend the ex parte rules to Congress. More transparency in lobbying encounters between broadcasters and politicians would be helpful.  One proposal would be to treat media executives (and executives from other heavily subsidized industries) as professional lobbyists, subjecting them to the same disclosure requirements as professional lobbyists concerning the legislation they lobby.  Even better, I’d suggest extending the ex parte rules to their lobbying of Congress.  In the executive branch, meetings between professional lobbyists and rulemakers concerning an active rulemaking must be publicly disclosed, and these disclosures must include information about the time, place, individuals present, and subjects discussed.  Those rules should be extended to Congress.    With such a transparency requirement, members of the public could decide whether it is unseemly for local broadcasters and members of Congress to use public resources to lobby each other for mutual gain.  The same philosophy recently led the Obama administration to require the public disclosure of the names of everyone who enters the White House.

Conclusion

For a brief moment in time it looked like the FCC would transition broadcast spectrum to broadband spectrum without granting broadcasters a huge economic windfall in the process.  That moment now appears to have come to an end.  In understanding how this windfall has taken on an aura of political inevitability, I suggest looking more closely at the interactions between local Oregon broadcasters and their members of Congress.    I’m not in any way suggesting that undertaking such an investigation would be easy, which is why I’ve recommended several new public policies that would shed light on such interactions and their results.  But given the lack of public transparency requirements on broadcast lobbying and the resulting methodological restraints imposed on reporters and others interested in investigating such issues, a narrow focus on Oregon might be revealing.  If Oregon broadcasters are shown to have preserved their journalistic integrity–something I wouldn’t bet on–then we could feel more confident that broadcasters in other local markets have, too.

–Stay tuned for more on the Broadcast Band’s Bully Boys–

Recorded conversation on February 25, 2010 between FCC Chair Julius Genachowski and NAB President Gordon Smith concerning the FCC’s Broadband Plan, to be released March 15, 2010

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BBB News Service
April 1, 2010 Thursday

SUBJECT: Recorded conversation on February 25, 2010 between FCC Chair Julius Genachowski and NAB President Gordon Smith concerning the FCC’s Broadband Plan, to be released March 15, 2010.

LOCATION: National Association of Broadcasters Headquarters, 1771 N Street NW, Washington DC 20036

Genachowski: How are you?

Smith:  Good to see you.

Genachowski: The Trail Blazers are doing great this year.  I bet you’re pleased.

Smith: Yeah, it’s nice to have a winning hometown team.

Genachowski:  And it’s even better to have a winning trade association!

Smith: You bet!

Genachowski:  If you had a choice, would you take your old job back in the U.S. Senate?

Smith:  I’m happy where I am.  Actually, my current job isn’t much different.

Genachowski: How so?

Smith: Well, I wouldn’t be here if it weren’t.  (Pause).  Look, I can trust you, right?

Genachowski: Yes, the last thing I want is to have you guys after me! (laughs).

Smith: Well, the truth is, leading the NAB is very much like being a U.S. senator from Oregon.  After all, why do you think they selected me?  This is a political job.

Genachowski: I bet you didn’t meet as many TV celebrities on Capitol Hill.

Smith: Yes, that’s true, too! (laughs).

Genachowski: I cannot flip my fingers and get a meeting with Meet the Press’s David Gregory.

Smith:  He’s speaking next week at the NAB state leadership conference, just before my grassroots crew blitzes the Hill.

Genachowski: I know.  I feel a little like Custer at the Alamo.  (laughs).

Smith: (laughs).  That’s just the way we want it.  (Pause).  So let’s get down to business.  What’s this talk about the broadcast band being the oxygen of mobile broadcast service?

Genachowski:  I didn’t say that.  What I said was that spectrum—our airwaves–is the oxygen of mobile broadcast service.  Look, America is facing a looming spectrum crunch, and this is a great opportunity for the broadcast industry.

Smith:  Okay, tell me about your Broadband Plan.  My team hasn’t seen it.

Genachowski: It’s a win-win-win.  Broadcasters win, the government wins, and the public wins.  We’re going to propose that 120 MHz of spectrum currently allocated to broadcasting be reallocated to mobile broadband and auctioned.  But here’s the kicker.  We’re going to make the auction voluntary for FCC license holders, and they’ll get the lion’s share of the auction receipts.

Smith:  Who says?

Genachowski: Well, we’re going to leave that part of the plan vague.  Leave it up to Congress to choose the proportion of auction receipts that go to broadcasters versus the public.  And we all know what Congress will do!  (laughs).

Smith:  This is not a laughing matter.  You’re talking about my members’ bread and butter.

Genachowski: (stops laughing).

Smith: Your approach is wrong.  Yeah, Congress is not going to stiff the broadcasters.  But it will also never agree to such a blatant giveaway to some of the wealthiest individuals and corporations in America.  You’re talking about a giveaway that could make Cash for Clunkers and GM’s bailout look like petty cash.  And for some of the most profitable companies in
America: Disney-ABC, GE-NBC, Viacom-CBS, and Fox.  What are you thinking?

Genachowski:  Look, the broadband plan makes no mention of spectrum windfalls.  I was very careful only to mention the positive aspects of the voluntary auction.  That’s why I always call my proposal a win-win-win.

Smith: I wasn’t born yesterday.

Genachowski:  You’re reading way too much into this.   When it comes to mobile broadband, our goal is clear: To benefit all Americans and promote our global competitiveness, the U.S. must have the fastest, most robust, and most extensive mobile broadband networks, and the most innovative mobile broadband marketplace in the world.  There is not one thoughtful observer who doesn’t agree with this goal and recognize that the only politically feasible way to convert broadcast spectrum into mobile broadband spectrum is to give broadcasters an incentive to make the transition.  Everyone recognizes the social benefits from converting broadcast to broadband are immense.  We’ve got the entire public interest community behind us in this!  There is no controversy!

Smith: What about the press?

Genachowski:  You mean your members?  I just cannot believe your members will give you a problem.  Your members control not only the radio and broadcast media but most of the major newspapers: the Washington Post, the Wall Street Journal, the Los Angeles Times, The Chicago Tribune, U.S.A. Today.  It would be suicidal for them—unprecedented—to give Congress a hard time on this.

Smith: You’re wrong.  There will be negative op-eds.   Members of Congress won’t like it.

Genachowski: So how should the FCC proceed?

Smith:  Congress isn’t going to object to giving us a spectrum windfall.  They just want it done right, which means you’ve got to give them political cover.  Recall the great spectrum giveaway in the Telecom Act of 1996.  Congress told the American public broadcasters weren’t getting any more spectrum, that all we were getting was a minor modification to our license, allowing us to offer a single HD channel instead of our traditional SD channel.  Congress conveniently didn’t mention that we were getting the right, for every SD channel we currently had, to provide an additional dozen SD channels or fifty mobile TV channels.  For the temporary loaned digital channel, Congress claimed it wasn’t a giveaway but a giveback; that at the end of the DTV transition the broadcasters would give back the spectrum they were loaned to make the transition.  Nobody told the American public that during the intervening years we’d constantly renegotiate the deal, whittling down the amount of returned spectrum, from 158 MHz to 102 Mhz, and the quality of returned spectrum, letting us pick the best of our original or loaned channel, and then holding out for billions of additional subsidies, including billions of dollars in equipment subsidies for our customers.

Genachowski: I don’t see how that strategy can work here.

Smith: Certainly, if you ask for an auction, you’ve got to bring in Congress.  Otherwise, one of our competitors will sue you for violating the spectrum windfall clause in the Communications Act and the many other Congressional statutes banning windfalls to public companies.  But the solution is simple.  Give us what we want through minor modifications of our licenses.  That’s the way it’s always been done.  That’s the way Congress likes it.

Genachowski:  But that’s too slow a process.  I want this complete by 2015.

Smith: My boy, we’re almost there, just be a bit patient.  In the last five years the FCC, with Congressional approval, allowed us to transition from site based licensing to geographic service area licensing, so we can now use a local cellular architecture to broadcast rather than a single giant tower.  And you also allowed us to abandon HDTV and create a new mobile TV standard built into cell phones that can provide TV, voice, data—whatever—and use the cell phone for the return link.  Doesn’t that already sound an awful lot like mobile broadband?  You bet.  Those free rights were worth more than $10 billion to us. Not only that, they’ll turn those new converter boxes the government just paid for into obsolete equipment faster than Windows 7 rendered your Windows 2000 computer into a doorstop.  And we did it with not a pipsqueak from Congress, the FCC, any influential public interest group, or the press itself.  That’s what Congress expects from you, and that’s what we expect from you.

Genachowski:  Okay, I hear you.

Smith: Now I don’t want to suggest that your plan is bad.  You’ve gotten Congress’s attention.  They won’t do the straight-out auction, but they will give you political cover so you can complete the regulatory transition from broadcast to broadband, where the money is.  Just listen to Dingell, Markey, Boucher, Rockefeller, and the other leaders.  They’re masters at this game.  You just follow their cue.

Genachowski:  But the auction proposal?

Smith: No need to worry.  Your spectrum inventory proposal will do the trick.   Congress will tell you to do the spectrum inventory first.  That will give us three to four years to continue our policy of saving broadcasting by killing it.  By then, our mobile broadcasting—did I say broadband?–business will be established, including popular interactive services.  Why then go through the effort of holding an auction for rights that we already possess?

Genachowski:  Tonight I’m giving a media award at the Kennedy Center to Newton Minow.  I’m going to call him a national treasure; I’m going to observe that people remember him for turning the most memorable phrase in communications policy history—the declaration that television was a vast wasteland; and I’m going to opine that for decades FCC chairman have been trying to one-up him and all have failed.  But what I’m really going to be thinking about in front of that audience is that I hope to be remembered for turning the vast wasteland into a vast giveaway that allowed the broadband age to finally come to America.  (laughs).

Smith: (laughs).

Genachowski:  What’s that copy of Orwell’s 1984 doing on your desk?

Smith: My favorite book.

Genachowski: Mine, too.  There is no better preparation for serving as an FCC Chair. (laughs)

Smith: (laughs).


GEOGRAPHIC: DISTRICT OF COLUMBIA

LOAD-DATE: April 1, 2010

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Transcript

Copyright 2010 BBB News Service, Inc.
All Rights Reserved

The John Dingell Test

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[This is a commentary on Bruce Kushnick's article in the March 16, 2010 Nieman Watchdog: How the FCC's exciting new broadband plan is a fraud.]

Representative John Dingell:  “I have great concerns about several of the plan’s recommendations about spectrum reallocation….   At best, these are ancillary to Congress’s intent to expand broadband access.   At worst, they would reinstitute the old policy debates long since satisfactorily settled….  In conclusion, Mr. Chairman, I would like to remind the witnesses today that Congress is the sole progenitor of the Commission’s authority.  To quote Sam Rayburn, if the Commission remembers it works for us, everything will turn out fine.”

–Opening statement of Representative John Dingell, Hearing of the U.S. House Subcommittee on Communications, Technology, and the Internet, “Oversight of the Federal Communications Commission: The National Broadband Plan,”March 25, 2010, at 34:20.

In his otherwise fine article, Bruce Kushnick errs in crediting too much power to the FCC.  The FCC is a creature of Congress, and Congress keeps it on a very short leash.  The problem, therefore, is not the FCC, but Congress.  Congress wants the FCC to be overwhelmingly pro-incumbent, so that’s what the FCC does.  FCC officials who aren’t suicidal have very little choice in the matter.  Unfortunately, Congress generally exercises its power over the FCC in ways that aren’t transparent, so it’s hard for the press and the public to hold members of Congress accountable, say, for giving incumbents windfalls at public expense worth tens of billions of dollars.

Here is a simple test about whether any think tank or advocacy group is serious about broadband corruption.  I call it the John Dingell test, after U.S. Rep. John Dingell.  Any group not willing to publicly finger John Dingell as a prominent source of multi-billion dollar taxpayer ripoffs–the Jack Abramoff of telecom corruption, but much, much worse given the money and stakes involved–doesn’t deserve to be taken seriously.

I’ll admit that it’s a bit unfair to go after Dingell because so many other members of Congress are also implicated.  But Dingell is the longest serving member of Congress, a longtime chair of the House Commerce Committee with jurisdiction over the FCC, the man responsible for appointing and reappointing the worst and longest serving FCC commissioner in the history of the FCC (Jim Quello), and he’s still shamelessly and effectively doing his dirty work on behalf of incumbents.

The reason the John Dingell test is so effective is that most telecom groups, even those with the noblest pedigrees, hate going after members of Congress, especially powerful ones of the same party (although partisan politics is remarkably unimportant on telecom issues), because it burns bridges.  Such members of Congress and their friends have incredibly valuable perks to give out to any group that wants to be an effective public advocate, so it’s suicidal to go after somebody like Dingell.

Thus, it might be said that it’s unfair to blame either FCC officials or public interest groups because to blame them is, in effect, to ask them to commit suicide, which most reasonable people would probably view as an unreasonable thing to ask of anyone.  From their perspective, they’re doing the best they can under impossible conditions.

To recap, let’s not attack the FCC or public interest groups too much.  They’re more victims of a corrupt system than causes of it.

The award for speaking out of both sides of your mouth goes to Representative Cliff Stearns, ranking minority member of the U.S. House Subcommittee on Communications, Technology, and the Internet

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Representative Cliff Stearns:  “The plans seeks to make 500 MHz of spectrum available for wireless broadband within ten years.  That’s good,  so long as the FCC does not give the spectrum away or rig auctions with conditions, then we’ll advance our broadband goals while generating needed federal revenue.   I hope that the broadband spectrum on the part of the broadcasters will be looked at carefully and that if they have to relinguish anything it will be on a voluntary basis.”

–Opening statement of Representative Cliff Stearns, Hearing of the U.S. House Subcommittee on Communications, Technology, and the Internet, “Oversight of the Federal Communications Commission: The National Broadband Plan,”March 25, 2010, at 22:40 (27:10).

Usually when politicians speak out of both sides of their mouth, they do so at different times and in front of different audiences.  Here, representative Cliff Stearns, the ranking minority member of the U.S. House Subcommittee on Communications, Technology, and the Internet, does it in sequential sentences in his opening remarks at his subcommittee’s oversight hearing on the FCC’s broadband plan.  It’s a testament to the shallow telecom reporting and widespread indifference to such inconsistencies that Stearns would feel comfortable publicly posing as a defender of the public purse while, in effect, championing a giveaway of tens of billions of dollars of public assets to the broadcast industry.

The Award for Broadcast Industry Taxpayer Funded Lapdog Goes to the Media Institute

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Cited Article

Patrick Maines, The Schemes and “Confessions” of Reed Hundt, Huffington Post, April 24, 2010.  Patrick Maines is the executive director of the Media Institute.

My Comment

Patrick Maines is a paid lobbyist for the broadcast industry, but, unlike most lobbyists, one paid for at taxpayer expense because the Media Institute is registered as a non-profit, so the lobbying expense is tax deductible. One way that Maines earns his keep is to serve as a bully boy for the broadcast industry.  The folks who control local TV and radio news hide anonymously behind rocks while cheering Maines on to do the stone throwing.  The politicians, who know who are behind those rocks, all get the message, so Maines is well worth the broadcasters’ money.

The stone throwing is, of course, to be expected from Maines. But what is over-the-top for me is his accusation that Hundt acts “clandestinely.”  This is a classic case of the pot calling the kettle black.  Over the years I many times tried to attend the Media Institute’s taxpayer funded events on behalf of the broadcasting industry.  I was always told “no.”  Even our partisan think tanks open the doors to the public without regard to ideology–but not the secretive broadcast industry, which has always operated on the principle that the less the public knows about its lobbying activities and its economic self interest, the better.

And for Maines to accuse the FCC of playing industry favorites when the broadcasting industry has always made that a centerpiece of its lobbying campaigns for government handouts worth tens of billions of dollars (think “preserving free TV”).  Well, such an argument is absolutely shameless.

Note that I don’t dispute Maines’s sincere interest in pushing First Amendment and pro-competition agendas.  But when the broadcast industry’s economic self-interest and lobbying agenda come in conflict with First Amendment and pro-competitive values–as they often do–Maines has consistently revealed his hand by either remaining quiet or pretending that the conflict doesn’t exist. The fact is, Hundt has been more of a champion of the Media Institute’s self-proclaimed values than the Media Institute itself.

An additional caveat is that when I say the “broadcast industry” I don’t literally mean just the broadcast industry.  What I mean is “broadcast related.”  Just as companies often expect their vendors, such as lawyers, to chip in with campaign contributions, broadcasters expect their vendors to do the same and their vendors have a long track record of doing so.  Go to the the annual NAB Show, and you’ll see the reason for this you-scratch-my-back-I’ll-scratch-your-back synergy.  My guess is that at least 80% of the Media Institute’s money is broadcast related.

Critique of Steve Coll's Washington Post commentary on broadcast policy and public media

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Cited Article

Steve Coll, Fox News should fund NPR, Washington Post, October 31, 2010. Coll is the president of the New America Foundation and former managing editor of the Washington Post.  (Disclosure: I was a senior research fellow and research director at the New America Foundation prior to Coll’s being appointed president and have criticized the Foundation’s undisclosed conflicts between its scholarly, journalistic, and advocacy activities).

My Comment

In his commentary, Steve Coll retreads some tired old ideas in communications policy and advocacy.  Not that there is anything wrong with the ideas per se (indeed, I consider Coll’s goals laudable), but when you’re apparently clueless about history, you’re doomed to repeat it.   Since at least the mid 1980s a host of scholars, advocates, and even policymakers have been making virtually identical arguments to Coll’s.  One reason they haven’t succeeded is, of course, the legendary political power of the broadcast industry.  Rather than being blushing maidens when it comes to hardball lobbying, TV broadcasters have long excelled at it, although out of the public eye (see my “Speak Softly and Carry a Big Stick: How Local TV Broadcasters Exert Political Power”).

One of the reasons for the failure is that decades ago NPR and other public broadcasters decided that the commercial broadcasters were too powerful to ever allow the type of trade Coll proposals.  Operating on the practical principles that “if you cannot fight them, join them” and that” there is more to be gained by cooperating than fighting” with the commercial broadcasters, NPR has been a champion of the very farce that Coll laments.  At virtually every opportunity to bring more accountability to the use of public airwaves by commercial broadcasters, NPR has either vigorously supported the broadcasters or stood on the sidelines, counting on victory while letting the commercial broadcasters play badboy.  In return, NPR got a huge increase in its spectrum rights (doubling their access to spectrum in just the last ten years, as part of the radio industry’s transition to digital radio) and buying off a potentially powerful foe, who would be able to retaliate effectively if NPR vigorously lobbied for Coll’s recommendations.

NPR provides an outstanding news product, but, as Coll notes, not in the very narrow realm where its corporate bottom line is most effected by public policy: the FCC’s policies regarding its use of the public airwaves.  In his own field of foreign affairs reporting, Coll is a great writer with equally impressive credentials.  But in this subject area, he and some of his colleagues at New America have focused too much on popularization.  There is an important role for skilled popularization (which some folks call plagiarism, when the work is accompanied by a claim of originality), but in this case, even by the standards of a popularizer, Coll hasn’t done his homework.  Given that taxpayers have contributed millions of dollars to Coll’s foundation for work on communications (the taxpayer subsidies come indirectly, via tax breaks to wealthy individuals who give money to foundations who then give money to Coll’s foundation), it’s sad that this is what we got for our money.  Perhaps Coll could do more good by offering to give some of his foundation’s taxpayer subsidies to NPR.   (Disclaimer: none of the above should imply that much of the work done at Coll’s foundation isn’t first rate, especially as journalism and advocacy).

–J.H. Snider

Clearwire rips taxpayers of billions of dollars, then gets praised for it in the business press

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Cited Article

How Craig McCaw Built a 4G Network on the Cheap: The mobile pioneer’s Clearwire controls airwaves worth $20 billion or more, Bloomberg Businessweek, May 20, 2010

My Comment

Shame on Bloomberg Businessweek for turning a company that ripped off billions of dollars of taxpayer assets (the public airwaves) into a hero and model of entrepreneurship.  No wonder the FCC continues to give tens of billions of dollars worth of public assets to private companies (“entrepreneurs”) under fraudulent pretenses.    The editors at Bloomberg Businessweek knew very well how Clearwire and its partners got hold of these assets “on the cheap.”  Indeed, I granted the lead reporter a long face-to-face interview only because he told me that he was going to report on this long neglected public ripoff.   But at some point he or his editors evidently decided that turning McCaw into an entrepreneurial hero rather than a spectrum robber baron would attract more of Bloomberg Businessweek‘s readers.

Reaction to Washington Post commentary on FCC Chairman Genachowski's broadcast band spectrum plans

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Cited Article

Ezra Klein, Prime ‘beachfront spectrum’ for all – if Congress will help, Washington Post, January 8, 2011.

My comment

As I would expect from Ezra Klein, brilliantly written about an area of public policy characterized by chronic official corruption. But Klein never moves beyond the headline news to reveal the professional wrestling show and hidden political dynamics of his subject matter.

Other Related articles:

David Oxenford, Gazing Into the Crystal Ball – What Washington Has In Store For Broadcasters in 2011, Broadcast Law Blog, January 5, 2011.

David Oxenford, FCC Adopts Notice of Proposed Rulemaking Looking to Reallocate Some TV Spectrum to Wireless Broadband, Broadcast Law Blog, November 30, 2010.

John Eggerton, FCC Media Bureau to Broadcasters: Help Us Structure Spectrum Auctions: Chief Bill Lake reiterates that incentive auctions will be voluntary, Broadcasting & Cable, December 8, 2010.

Broadcasters are urged to air new TV and radio spots Jan. 4-24 in conjunction with the launch of TheFutureOfTV.org, TV NewsCheck, December 13, 2010

John Eggerton, Genachowski: Underused Broadcast Spectrum Needs to Be Repurposed: Should be used for mobile wireless broadband, Broadcasting & Cable, 1/6/2011

CEA Chair Gary Shapiro: broadcasters have "terrified members of Congress with their power to use their broadcast signals in a way which demonizes members of Congress"

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Cited Article

John Eggerton, CEA’S Shapiro: Broadcasters Have Terrified Hill With Power To Demonize Legislators, Broadcasting & Cable, January 14, 2011.  Note: Eggerton is reporting on an interview Shapiro had on C-SPAN’s Communication Series.

Quote from the article

Asked by Telecommunications Reports Senior Editor Paul Kirby about his quote at the CEA convention in Las Vegas earlier this month that broadcasters were spectrum “squatters,” and asked  how tough it would be for the government to get that spectrum back, Shapiro said that broadcasters are a “phenomenal political lobby” and have “terrified members of Congress with their power to use their broadcast signals in a way which demonizes members of Congress.”

“The National Association of Broadcasters has no interest in responding,” said NAB spokesman Dennis Wharton.

My Comment

My kid’s elementary school has an antibullying policy requiring disclosure of bullying behavior.  It’s too bad that no similar disclosure policy exists for broadcast bullies.

Bullies learn in kindergarten that the best strategy when accused of bullying is not to admit of the bullying behavior when there is any possibility of plausible deniability.  This may consist of denial or, as Dennis Wharton does here, refusing to answer the question.  Over his career, Wharton, who has served as the longtime public spokesman for broadcast bullies, has tried just about every trick of plausible deniability.

Every school bus in my district now has a video camera in it to prevent bullies from playing the broadcast bully’s game of plausible deniability.  It’s unfortunate that no similar combination of technology and policies makes it possible to verify the actions of the broadcast bullies.

Addendum

Broadcasting & Cable, the trade publication that serves as the mouthpiece for broadcast interests, did not publish this comment.  So much for their commitment to the First Amendment and a robust discussion of diverse and competing ideas.

Other Related Article

David Hatch, CES SHOW: CEA’s Shapiro Lashes Out at Broadcasters, National Journal, January 6, 2011

My comment

During the last 20 years, broadcasters have been showered with hundreds of billions of dollars worth of corporate welfare in the form of new and more valuable spectrum rights. The bonanza has come because broadcasters pointed their political guns at the heads of their local members of Congress and said: “give me or else.” What’s a scaredy cat member of Congress to do? For Wharton, the NAB’s long-time spokesman, to claim that the broadcasting industry gave back a quarter of its spectrum is akin to a robber baron handing out dimes to the homeless and having his publicist boast of it. Shameless.

Wall Street Journal Advocates for Broadcasters' Wet Dream

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Cited Article

Holman Jenkins, FCC vs. Innovation: It’s crazy to exclude TV broadcasters from the world of mobile broadband, Wall Street Journal, February 12, 2011

Quote from the Article

Jenkins: “If freeing up spectrum for more profitable uses is so urgent, why not deregulate broadcasters to do it themselves?”

My Comment

Mr. Jenkins proposes that the public give broadcasters, some of the wealthiest individuals and most profitable corporations in America, tens of billions of dollars worth of public assets.  Mr. Jenkins frames the question as an issue of deregulation, but it is really a matter of giving a licensee to use public assets a perpetual and much more valuable license without public compensation.  If members of Congress didn’t live in terror of their local broadcasters and the propensity of those broadcasters to exact retribution if the government were to take away their spectrum subsidy, this would never even be an issue.  Instead of cutting worthwhile and necessary public programs, Congress should be cutting this subsidy that the broadcast industry doesn’t deserve and doesn’t need.

Quote from the Article

NAB Spokesperson: “Mr. Herman’s idea is ‘very intriguing’ and “we think the FCC should be open to new ideas.”

My Comment

Mr. Jenkins cites Mr. Herman’s specific proposal to “deregulate” broadcasters as an inspiration for his commentary.  But as for the NAB’s statement that Mr. Herman’s idea is fundamentally new, this is beyond preposterous.  NAB chief lobbyist Jim May pushed for even more complete broadcast spectrum deregulation in the early 1990s and only backed off because, after the spectrum auctions from 1994-1996, it became clear that such a proposal would be a blatant giveaway of public assets.  Nevertheless, this has always been the wet dream of every sentient broadcaster with an IQ of more than 50.

Interpreting the NAB's euphemisms

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Cited Article

Sara Jerome, CTIA estimate faces tough questions, The Hill, February 17, 2011

Quote from Article

NAB Spokesman: “NAB does not oppose spectrum auctions that are truly voluntary, and we look forward to an informed dialogue in coming months on the enduring value of free and local television for all Americans.”

My Comment

What the NAB is really saying: “We don’t mind spectrum auctions as long as nearly 100% of the windfall goes to broadcasters (including some of the wealthiest individuals and most profitable companies in the U.S.) rather than U.S. taxpayers who own the public assets.”

Senator Mark Warner's spectrum bill: Can the leopard shed his spots?

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Cited Article

Josh Smith, Warner Introduces Bill To Authorize Spectrum Auctions, National Journal, February 18, 2011.

My Comment
Nice rhetoric from Senator Mark Warner, but the devil will be in the details.  If Warner is true to his word, then, like St. Augustine, he will be a reformed sinner.

Few people know that Senator Mark Warner made his fortune in the 1980s from spectrum windfalls at taxpayers’ expense.  In the 1980s, Congress gave away billions of dollars worth of spectrum licenses by lottery.  It was the largest lottery in the history of universe and Warner, one of the major players, figured out a way a walk away with hundreds of millions of dollars worth of public assets.  As a lawyer putting together deals and purchasing countless spectrum lottery tickets on behalf of wealthy speculators, such as dentists and doctors,  who knew relatively little about spectrum but could recognize a government windfall when they saw one, he took a cut of winning lottery tickets.  And win he did.  It was all perfectly legal, just like all the special interest perks that Congress dishes out every year.

Warner then took his taxpayer financed windfall to finance a political career, which eventually led him to the U.S. Senate.

So sure, Warner has the spectrum smarts to ensure that the public isn’t once more played for the sucker.  But if I had to bet, I’d put my money on Warner playing the public for a sucker again.  Sure, the public will probably get some billions out of this.  And sure, the spectrum is now so grossly underutilized that just about any other use would be a big improvement.  But the big money will go to the broadcasters: the Disneys, Viacoms, News Corporations, and Comcasts.

Who will tell the people?  Certainly not the broadcasters.

But unfortunately, it’s also not clear that the people really care.  That’s why, assuming Warner believes his own rhetoric, he probably cannot deliver on it.

–J.H. Snider, author of SpectrumBS.info and “Speak Softly and Carry a Big Stick: How Local TV Broadcasters Exert Political Power.”

Related Articles

Sara Jerome, Warner introduces incentive auction bill, The Hill, February 18, 2011.

John Eggerton, Warner Bill Would Cap Broadcaster Spectrum Compensation: Introduced an incentive auction bill to free up wireless spectrum, Broadcasting & Cable, February 18, 2011

The BS Brigades, led by the National Economic Council's Phil Weiser

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Cited Article

Juliana Gruenwald, Official Says Most Broadcasters Unlikely To Give Up Spectrum, National Journal, February 24, 2011.

Quote from Article

“When asked what share of the proceeds broadcasters will want in order to give up spectrum, Weiser said he did not believe it would be much given that they will still have ‘the same business model but it is done … more efficiently.’”

My Comment

At yesterday’s event sponsored by the Wireless Innovation Alliance, I asked the National Economic Council’s Phil Weiser what share of the proceeds broadcasters would get in order to give up the spectrum.  In response, he essentially refused to answer the question. He asserted that receiving a high percentage of the proceeds was not a top priority of the broadcasters—an assertion I found ludicrous. Further, he asserted that since the broadcasters hadn’t made this issue a top priority, the administration and Congress hadn’t focused on it—an assertion I also found ludicrous.

However, Weiser at least tried to either dodge or answer the question. His colleagues at the NTIA and FCC refused to answer the question, although it was also directed at them.

Obviously, the administration and its bipartisan congressional allies on this spectrum issue would prefer to change the subject, as the “win-win” storyline is the one they’ve chosen to use to frame the issue, whereas a “broadcaster windfal” storyline would involve them in controversy and force them to confront the terrifying power of the local TV broadcast lobby .

Right now the broadcast lobby has a two-fold strategy to make sure they receive the lion’s share of any future spectrum auction. First, repackage the broadcast band to acquire as many yet unclaimed spectrum rights as possiible. This has been their main strategy to seek economic windfalls from taxpayers over the last two decades, and with supporters like the National Economic Council, NTIA, FCC, and bipartisan leadership in Congress, they should do extremely well.

Second, to get as high a share as possible of the auction proceeds, should there be one. The primary euphemism broadcasters are using to ensure that the public is only left with a figleaf of return from the auction of the public’s airwaves is “voluntary” broadcaster participation. If participation is “voluntary,” then the only way the government can get the broadcasters to relinquish the spectrum is by giving them the lion’s share of the proceeds. Otherwise, the broadcasters can just hold out for a better offer.

The broadcasters’ two strategies are releated because the more rights you have to an asset for sale, the more revenue you’ll get from the sale.

Shame on the public interest community for not revealing its financial and institutional conflicts of interest with the public on this issue. I suspect that if the issue continues to rise in profile the public interest community will have to take the side of the public, if only in a face saving way, to preserve its credibility. These conflicts have long dogged the public interest community. But we’ve rarely seen the consequences so vividly displayed as in the current intellectually and morally stunted debate.

Related Articles

John Eggerton, NAB Hosting Hill Meetings On Broadband/Broadcast Coexistence: One of many educational efforts NAB spearheading in coming weeks, monthsBroadcasting & Cable, February 22, 2011.

Price Colman, Auction Talk Draws TV Spectrum Speculators, TVNewsCheck, February 23, 2011.

The unholy alliance of NAB, News Corporation, and the Wall Street Journal's Holman W. Jenkins, Jr.

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Cited Article

Jenkins, Holman W., AT&T’s Big Bet on Spectrum Folly, Wall Street Journal, March 23 2011

Quote from Article

“… AT&T, whose network in New York is sagging from all its iPhone users, could walk over to any broadcaster in New York with the following proposition: You aren’t getting much value from your broadcast spectrum because most of your viewers are on cable or satellite. Why not lease some of that spectrum to us for mobile broadband?….

Unfortunately, this would require the FCC to show some willingness effectively to deregulate broadcast license holders to do new things with their spectrum….

The only substantive objection is that taxpayers, who own the public airwaves, wouldn’t get a fair shake if broadcast licensees were set free to redeploy their spectrum to mobile broadband. But this is misleading. Under existing law, taxpayers are already entitled to 5% of the revenues if broadcasters turn their spectrum to new uses. If that’s not enough, Congress could always raise it to 10% or 15%.”

My Comment

Let’s apply Jenkins’s economic logic to a licensed hot dog vendor in Central Park who pays a 5% sales tax on all sales.  Jenkins would grant the vendor ownership rights to the area covered by his vending license and call this “deregulation.”   By granting the vendor ownership rights the vendor could do whatever he wanted with the land covered by his license.

Jenkins describes this as a win-win deal.  Since selling hot dogs is hardly the most valuable use of the land, the vendor would earn a lot more revenue by building a high rise condominium complex where his hot dog stand once stood.  The public would win doubly: first, because there is a desperate shortage of housing in Manhattan, especially adjacent to Central Park, and second, because the government would get more revenue from the 5% sales tax on the much higher revenues generated from a condominum complex within Central Park.

Leaving aside the question whether Central Park should remain a park (read “unlicensed spectrum” here), the problem with this economic reasoning is that the public could still get both the condominium complex and the 5% fee on the increased condominium sales even if  the land was auctioned to the highest bidder.  In short, giving the land to the licensed hot dog vendor is an awful deal for the public.

Jenkins calls this “deregulation.”  But it’s nothing of the sort.  It’s a giveaway.  In this case, a giveaway of tens of billions of dollars worth of the public’s assets.

An additional irony is that a 5% (or even a 15%) fee on spectrum sales would be a steal, and a huge competitive advantage for the former TV broadcasters.  Mobile telephone companies (who in addition to paying such fees had to pay billions of dollars to the government to get their licenses) routinely pay a total of about 18% of revenues on federal, state, and local fees/taxes on their mobile services.  (Since taxes vary by local and state jurisdiction, the actual fee/tax in any jurisdiction tends to vary a lot.)  Governments got away with such high fees/taxes because  they were set when mobile telephone service had minimal penetration and was viewed by the public as a luxury tax only on the wealthy.

Where did Jenkins get such an economically flawed argument?  He got it right out of the broadcast lobby’s talking points with members of Congress and FCC.  Indeed, both his proposal and the verbiage with which he expresses it are so close to that of the National Association of Broadcasters (NAB) that his essay would probably be viewed as plagiarism if  submitted to a peer-reviewed academic publication rather than a newspaper.    But then again, the NAB is probably thrilled to have their talking points published in a respectable, widely read newspaper and written by a commentator with no obvious ties to the broadcast industry.  But then again, the Wall Street Journal is owned by the News Corporation (owner of the Fox broadcasting network), which stands to win a windfall of billions of dollars if Jenkins’s proposal were adopted by Congress and the FCC.  Not incidentally, the News Corporation is not only an NAB member but one of the most notoriously aggressive spectrum lobbyists in the U.S. (For examples, see Speak Softly and Carry a Big Stick: How Local TV Broadcasters Exert Political Power.)

Related Comment

Snider, J.H., Wall Street Journal Advocates for Broadcasters’ Wet Dream, SpectrumBS.info, February 22, 2011.

Related Articles

Rush for wireless airwaves may drive risky deals, Reuters, March 18, 2011.

Bachman, Katy, Debate Over Spectrum Gets Nasty: Wireless companies, broadcasters trade barbs, AdWeek, March 19, 2011

Downes, Larry, Snowe, Kerry introduce spectrum inventory bill, CNET, March 2, 2011.

Eggerton, John, Station Groups: FCC Spectrum Proposals Are Illegal, Broadcasting & Cable, March 21, 2011.

Gross, Grant, Groups: Spectrum Incentive Auctions Would Raise Big Bucks, PCWorld, February 15, 2011.

Jerome, Sara, Dingell: Spectrum auctions might be a ‘shot in the brains’ for broadcasters, The Hill, February 16, 2011.

Kang, Cecilia, Kerry, Snowe introduce spectrum inventory bill, Washington Post, March 2, 2011.

More Spectrum, Please: AT&T bids $39 billion to get around FCC bottlenecks, Wall Street Journal, March 23, 2011.

A Review of the Brookings Center for Technology Innovation: Has Director Darrell West struck a Faustian Bargain?

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Brookings Center for Technology Innovation was launched on June 25, 2010, less than a year ago.  Led by Darrell West, it has come roaring out of the gate with a series of timely and highly useful events on hot button technology policy issues.

Less admirably, these events—with their occasional accompanying policy papers–have often served primarily as a megaphone for reflecting elite consensuses and differences rather than moving public policy debates forward.  The overall feel of these events is of a panel discussion at an elite trade show that assembles the obvious and interested elites, is moderated by a trade industry reporter, and is primarily interested in what the powerful and successful plan to do next—except that whereas trade shows charge for admission, Brookings does not.

I have attended more than a dozen Brookings events on technology policy during the past year.  Consider the most recent one, A Framework for Innovative Federal Spectrum Policy, which discussed yet another important, timely issue.   It featured a star-studded panel of spectrum advocates cum experts: Brookings Fellow Adele Morris, an economist and the leading think tank spectrum analyst in Washington, DC today, discussed the ideas in her recent joint paper with spectrum engineer Robert Matheson.  Blair Levin, former broadband czar at the FCC, was, as usual, an informed and colorful speaker.  Jim Ciccioni (AT&T) and Rick Whitt (Google) ably represented the views of carriers and device makers.  And Roger Entner, rounding out this smart set, demonstrated why he has had an illustrious career doing research and consulting for the major telecom players who can afford his services.   What could there be not to like?

The catch is that being smart and influential doesn’t necessarily imbibe you with a thirst for truth, let alone a desire for publicly expressing inconvenient truths.   Of course, it may be argued that thirsting for the truth isn’t what we expect of the DC smart set, let alone individual think tank panelists.  But Brookings, as the convenor?  We may not, in general, expect much of think tanks in the truth seeking department, especially doing the hard work of basic, highly innovative research.  But isn’t Brookings—the Ivy League studded, veritas seeking think thank—supposed to set a higher standard?  Isn’t it supposed to ask the inconvenient questions that the powerful might prefer not to have asked?   Isn’t it supposed to research policy ideas without fear or favor?

Consider that this is the second Brookings spectrum policy event in a row where all the panelists have endorsed giving billions of dollars worth of spectrum rights away to incumbents in the name of spectrum efficiency and political expediency.   That does appear to represent the elite consensus in DC.  But I doubt very much it represents the informed public consensus.  Even worse, one gets the sense that the members of this smart set, like the Obama administration, Congress, and the FCC, want to pretend that giving multi-billion dollar spectrum windfalls to incumbents is a pure win-win with no hard political decisions to be made.

A related omission in framing the debate was the discussion why the broadcast lobby opposes incentive auctions.  The theory proposed by several panelists was that the broadcasters’ spectrum becomes more valuable over time, so the longer they hold out, the more valuable it becomes.  This is true, and I had no problem with this theory.   But the only explanation offered for this theory was the rising demand for mobile broadband services.  There was no discussion of all the little games the broadcasters (and almost all spectrum incumbents) continually play to quietly acquire additional spectrum rights as the clock clicks away.  In the case of Brookings, it’s quite possible that the problem is that Darrell West, the moderator and event organizer, didn’t know any better, as spectrum policy and politics hasn’t been his specialty.  But many of the panelists surely knew better, and they represented the spectrum incumbents’ lobbying strategy that such issues are best dealt with discreetly out of the public eye because what goes around comes around.

The sensibility Darrell West has brought to Brookings’s technology policy initiative is that of a highly skilled journalist.  On timely subjects, he identifies talented and influential policymakers and popularizes their insights for larger audiences.   But the best journalists also report without fear or favor, to echo the New York Times’s motto.    It’s an ideal that few journalists either achieve or seriously strive to achieve because speaking truth to power is, for most journalists, not a profitable line of work.   West, who as a highly regarded political communications scholar has studied these tradeoffs with more care and rigor than any other think tank analyst at Brookings, is surely wrestling with them.   But as illustrated by the countless politicians who rail against Washington while campaigning and then succumb to all its temptations while in office, temptation often overcomes principle.  The same is surely true in the work that think tanks do.

West is undoubtedly striving to achieve a reasonable balance between his concern for the underdog and truth while not ruffling the feathers of the powerful and smart set he needs to cultivate.  Those who observe Brookings Center for Technology Innovation should decide for themselves how Darrell West does his balancing.   But there is no question that whatever balance he has struck, it has helped position Brookings as a leader, perhaps THE leader, in this policy space.

 

Broadcasters' windfall strategy goes beyond merely preventing incentive auctions

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Cited Article

David Lieberman, Who Will Blink First Over TV Spectrum? Obama Administration Battles Broadcasters, Deadline New York, April 18, 2011.

Article Quote

“The NAB’s biggest concern is that the government might seizespectrum without a broadcaster’s consent. CBS chief Les Moonves echoed that message when he said last week that, as long as it “remains voluntary, we’re fine with that. Because we’re not going to volunteer….  The Obama administration wants TV stations to give up some of their spectrum so it can be redeployed to offer Internet services….”

My Comment

The TV broadcasters are holding out to get 100% of the windfall from the shift to mobile broadband internet uses of their spectrum.  All this talk about broadcast vs. internet is largely a smokescreen for this negotiating ploy.  Broadcasters are moving as fast as they can, without being too blatant, in transitioning to internet services.  In other words, they are trying to become what they purport to criticize.  Their acquisition of geographic area licensing (vs. site-based licensing) and mobile TV rights in recent years–both acquired below the public radar and without public compensation–is just the tip of the iceberg of this strategy.  From the broadcasters’ perspective, too, every day they hold out the demand for spectrum increases and with that their potential windfall.

Lieberman has basically gotten it right.  But the extra details matter, and the broadcasters aren’t going to volunteer them.  For example, when Les Moonves says he’s not going to participate in voluntary auctions, he’s only telling you half of the story.  The other half is that he wants to keep his cake and eat it, too; that is, capture the entire windfall from broadcasters’ abandoning broadcasting in the name of preserving it.

Recent Related Articles

Letter from CTIA to members of Congress, March 17, 2011

Cecilia Kang, President Obama pitches $18 billion wireless broadband plan, Washington Post, February 10, 2011.

The FCC’s Incentive Auction Proposal, Remarks by FCC Media Bureau Chief Bill Lake to National Alliance of State Broadcaster Associations, February 28, 2011.

New York Times follows the money but misses the influence

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Cited Article

Wyatt, A Clash Over Airwaves, New York Times, April 22, 2011 (featured on page B1).

Cited Quote

“Sounds kind of like a bank holdup to me,“ Representative John D. Dingell, a prominent Michigan Democrat, told Julius Genachowski, the F.C.C. chairman, at a hearing in February. “You hold a gun at the teller’s head and say, ‘We know that you are going to voluntarily give me this money. If you don’t, I’m going to shoot you.’ “

My Commentary

During his long career in Congress, including as head of the U.S. House Commerce Committee with jurisdiction over broadcasting, Rep. Dingell has never seen a TV broadcast subsidy he didn’t like.  He was also the champion of Jim Quello, a local Michigan TV broadcaster, who he got  appointed to the FCC and who shamelessly supported tens of billions of dollars worth of public rights giveaways to the TV broadcasters. Dingell has been rewarded by his local TV broadcasters not with campaign cash but with favorable TV  coverage.  It is a  travesty of our political and media system that he should have been able to do so much harm to the American people while being politically rewarded for it.   By implying that the way the broadcast industry exerts political influence is solely or primarily through campaign contributions, the article fundamentally misleads the public.   The article fits in the long tradition of giving Dingell a pass and taking his statements, however absurd they might be, at face value.

Why the press engages in exposes of lawmakers who give a few hundred thousand dollars in an earmark to a legitimate if questionable local project but ignores a spectrum rights giveaway of billions of dollars to some of America’s wealthiest individuals and most profitable companies is beyond me.

 

Politico, which has a dog in this fight, blesses the giveback canard

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Cited Article

Peter Passell and Robert Hahn, The FCC’s Trillion-Dollar Gambit, Politico, April 29, 2011

Article Quote

“As part of the deal for switching to a spectrum-efficient digital system, the broadcasters gave up about one-quarter of their spectrum — what used to be UHF channels 52-69. This was auctioned to the wireless telecoms for close to $20 billion.”

My Comment

This is certainly a common canard used by the broadcast lobby and its champions.  But the fact is that the DTV transition was a huge giveaway to, not a giveback from, the broadcast industry. As part of the DTV transition, broadcasters greatly increased their coverage areas at public expense and also won the right to transmit more than a dozen TV channels (hundreds if you include low definition mobile television channels) in the band that previously they were only licensed to transmit a single standard definition TV signal.  They also got many other perks that are too technical to go into here.

The broadcasters were indeed forced to give up some of the unused guard band channels they had previously polluted with harmful interference.  But the guard bands were never the broadcasters to give up.  The DTV technology that allowed the broadcasters to vastly increase their service rights also allowed the FCC to reduce more than $20 billion worth of wasted guard band space in the general TV band allocation.  This tradeoff of giving to TV broadcasters around a hundred billion dollars worth of new spectrum rights in return for reducing their pollution of the wasted guard band space was at the core of the win-win of the so-called DTV transition (originally called the HDTV transition for lobbying purposes).

To only focus on the reduced pollution and waste of the guard band channels, while a good lobbying point for the broadcast industry, is fundamentally misleading.  So too is the fact that Politico didn’t disclose in this commentary that it’s owned by a company with extensive local TV broadcast license holdings and a management that has never been shy about using hardball political tactics to pursue its corporate spectrum welfare lobbying agenda.  Admittedly, Robert Hahn and Peter Passell aren’t Politico staff writers and are highly respected policy analysts, so the conflict of interest seems less blatant.  Still, it would be good journalism ethics for Politico to acknowledge that it very much has a dog in this fight.

Recent Related Articles

Comments of Campaign Legal Center, Benton Foundation, et al., In the matter of Innovation in the Broadcast Television Bands: Allocations, Channel Sharing and Improvements to VHF, ET Docket No. 10-235, April 25, 2011.  Covered in Broadcasting in Cable.

Eggerton, John, NAB-Commissioned Study Offers Alternatives: For spectrum crunch suggests using smart antennas and femtocells to boost spectrum efficiency, Broadcasting & Cable, April 26, 2011.

Jerome, Sarah, FCC: We must not study spectrum issue ‘to death,’ The Hill, April 28, 2011.

Johnson, Ted, Air War Escalates: Are cell providers ‘squatters,’ Variety, April 27, 2011.

Wharton, Dennis, “Study Discredits Claim of Spectrum Crisis for Mobile Broadband,” NAB Press Release, April 26, 2011.  Available at: http://www.nab.org/documents/newsRoom/pressRelease.asp?id=2516.

The elephant in Blair Levin's spectrum lair

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Cited Article

Levin, Blair, Spectrum Overhaul Long Overdue, The Hill, May 10, 2011

Article Quote

Blair Levin, primary author of the FCC’s National Broadband Plan, says: “The question we should be debating is, what process should we use to reallocate spectrum to achieve our country’s purposes?  There are only four alternatives.”

My Comment

I disagree both that there are only four questions and that he has presented the most critical ones.  For me, there is hierarchy of questions, starting with: “Should we allocate spectrum according to the dictates of special interest politics or the public welfare?”

If the answer is special interest politics, then we should allocate spectrum to maximize the windfall to incumbents.  That seems to me like a pretty good summary of how we’ve allocated spectrum over the last 80 years.

If the answer is public welfare, then Levin’s questions are more relevant.   However, in any case, they are distinctly secondary to the more fundamental question of whether we should continue to allocate spectrum based on the preferences of the common weal or those of some of the wealthiest individuals and most profitable corporations in the world.

Arguably, no other natural resource owned by the American public is allocated more corruptly than spectrum.  Until our policymakers acknowledge that reality and make institutional reforms to correct it (see my “Art of Spectrum Lobbying” for suggestions), the high minded debate that Levin wants to hold will be irrelevant–a mere smokescreen–and the past corruption in spectrum allocation the best indicator of the future.

Why does Levin consistently ignore this ignoble past and likely future in his public musings?  I’ll leave that for you to figure out.  If you can, you’re well on your way to understanding why our spectrum policy is such a mess.

Recent Relevant Articles

Mark Miller, NAB’s Smith: Spectrum Crucial To Next-Gen, TVNewsCheck, May 10, 2011

John Eggerton, Smith: Forced Spectrum Move Could Destroy Innovation, Broadcasting & Cable, May 10, 2011

Harry Jessel, So Soon?  Next Gen Broadcast TV in the Works, TVNewsCheck, April 27, 2011

Deborah McAdams, Mobile DTV Group Lines Up Conditional-Access Technology, TVB, March 9, 2011

Jessell, Harry, Broadcasting's Future is all About Mobile, TVNewsCheck, May 20, 2011.

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Jessell, Harry, “Broadcasting’s Future is all About Mobile,” TVNewsCheck, May 20, 2011.

Favorite Quote

“And for the long term, the ATSC has also begun work on the next-generation of digital TV broadcasting, which could be ready within five years. The next-gen system will close the gap between wireless broadband and broadcast….”

Adweek's losing battle against journalistic standards

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Cited Article

Katy Bachman, Air War It’s TV vs. phones in Washington’s explosive broadband battle, AdWeek, May 25, 2011.

Article Quote

“The broadcasters are the ones carrying the scars, having already been forced two years ago to surrender 25 percent of the airwaves they held, when the federal government’s long-planned, long-delayed conversion from analog to digital TV finally went through.”

My Comment

This author can write but her grasp of telecom history is, to put it mildly, rather slight. Consider a writer who relies on the current talking points of the players involved in the Israeli/Palestinian debate. It’s a journalistic formula for possibly getting the current power dynamics right but not one for understanding the underlying issues, including the merits of the arguments made by the conflicting parties. Overall, this piece is written like a sophisticated press release written by the NAB’s Dennis Wharton. Kudos to the NAB for getting its talking points to drive the storyline here. No one doubts the broadcasters’ comparative sophistication in dealing with advertisers!

Here I’d like to dwell on just one claimed historical fact. The author says: “The broadcasters are the ones carrying the scars, having already been forced two years ago to surrender 25 percent of the airwaves they held, when the federal government’s long-planned, long-delayed conversion from analog to digital TV finally went through.”

No, the DTV transition was a huge windfall for the TV broadcasting industry, increasing the value of their spectrum by at least ten times what it would otherwise be valued at today. It’s true that some of the guard band spectrum allocated to TV broadcasting service was given up and that restricted the broadcasters from reaping some of the additional windfall they might have acquired from being granted free use of additional unused guard band space. But the loss of an additional potential windfall is a very funny way to set a baseline for accounting. It’s the type of accounting politicians frequently engage in when they want to score political points in budget battles. But I’d suggest that the appropriate baseline is the spectrum rights individual broadcasters had before and after the DTV transition. And therefore the magnitude of the windfall, at least tens of billions of dollars–and to some of the wealthiest individuals and corporations in America–would be the more appropriate historical reference.

On the positive side, the author’s presentation of the politically salient positions does pretty much represent the conventional wisdom today among the political elite in Washington, DC. If all that counts is perception, not reality, in Washington, DC, then the author can be said to have provided a balanced account. However, that is a very low (albeit hardly unusual) journalistic standard.

 

 

Kim Severson, "As Weather Becomes Big Story, TV Forecasters Play the Hero," New York Times, July 19, 2011

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Cited Article

Kim Severson, As Weather Becomes Big Story, TV Forecasters Play the Hero, New York Times, July 19, 2011

My Comment

This article reads like a press release from the National Association of Broadcasters (NAB), the major lobbying arm of the local TV broadcast industry. The NAB is currently seeking a spectrum windfall from Congress worth tens of billions of dollars, and the emergency information argument contained in this article is central to their lobbying campaign. I’d love to know who pitched the article to Kim Severson, the author. I’d also like to know how Kim got the featured anecdote concerning Ms. Eller. I’d be willing to bet that there is a story there. Lobbyists for the local broadcast TV industry are brilliant at getting these types of articles placed. They then distribute them to policymakers when seeking political favors.

Gautham Nagesh, “Eshoo repeats call for national public-safety network,” the Hill, September 7, 2011

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Cited Article

Gautham Nagesh, Eshoo repeats call for national public-safety network, the Hill, September 7, 2011

 Article Quote

Rep. Eshoo: “On the 10th anniversary of 9/11, a fitting tribute to our first-responders, who fought so bravely to save lives and lost their own…”

 My Comment

A “fitting tribute”?  What could be less of a fitting tribute than to cynically attach to a bill celebrating the heroism and good will associated with our first responders enabling legislation for a corporate giveaway worth likely tens of billions of dollars to an off-the-charts highly profitable industry that has callously warehoused and misused spectrum at the expense of both first responders and the public since the late 1980s?

Stacey Higginbotham, “Super Wi-Fi or white spaces, what’s up with unlicensed broadband?,” Gigaom, Sept. 1, 2011

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Cited Article

Stacey Higginbotham, Super Wi-Fi or white spaces, what’s up with unlicensed broadband?, Gigaom, Sept. 1, 2011

My Comment

I’d like to know the relative amount and quality of the spectrum allocated to unlicensed devices in the white spaces in both the U.S. and U.K. The original plan in the U.S. was to have a meaningful amount of white spaces allocated to unlicensed. Due to the power of the broadcast lobby, the white spaces available for unlicensed was significantly whittled down until, it could be argued, not much more than the dregs were left. Not surprisingly, commercial interest in so-called Super WiFi also dropped. But in the U.K., the broadcast lobby isn’t as all-powerful (this largely has to do with its parliamentary system), as evidenced by its digital transition, which did a much better job of limiting socially harmful windfalls to the broadcast lobby. This suggests the U.K. may also have done a better job with the white spaces allocated for unlicensed.

Juliana Gruenwald, “State Attorneys General Call for Reallocation Of Spectrum For Public Safety Network,” Tech Daily Dose, August 30, 2011

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Cited Article

Juliana Gruenwald, State Attorneys General Call for Reallocation Of Spectrum For Public Safety Network, Tech Daily Dose, August 30, 2011

My Comment

How cynical of Jay Rockefeller and Kay Bailey Hutchinson to use the cover of 9/11 and public safety to orchestrate one of the biggest corporate giveaways in America history.  While everyone is publicly focused on the public safety portion of their bill, the economically most important part of the bill is its orchestration of a giveaway worth tens of billions of dollars to incumbent broadcasters, some of the most politically powerful and profitable corporations in America.

Editorial, “Wireless tech: Give our airwaves some air,” Los Angeles Times, August 23, 2011

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Cited Article

Editorial, Wireless tech: Give our airwaves some air, Los Angeles Times, August 23, 2011

My Comment

Shame on the Los Angeles Times for advocating a giveaway to the broadcast industry worth tens of billions of dollars while not acknowledging that, as part of the Tribune Company, one of the largest TV broadcasting conglomerates in the U.S., it stands to gain a windfall of spectrum rights worth hundreds of millions of dollars, if not billions, from the giveaway.

According to the most rudimentary standards of journalistic ethics (and ones the Los Angeles Times claims to subscribe to), the Los Angeles Times should acknowledge such a gross conflict of interest in writing a self-serving editorial like this.  Perhaps not surprisingly, the editorial is almost a carbon copy of the talking points that the Tribune Company’s spectrum lobbyists in DC have been using.

Admittedly, one has to have a lot of background knowledge to read through all the lobbyist inspired spin in the article.   Perhaps the editors are as clueless as the public when they read this type of lobbyist inspired spin.

Admittedly, too, the unlicensed stuff isn’t in the broadcasters’ official playbook.  But that also represents less than 1% of the spectrum assets that Congress plans to give away to the broadcast industry, including the Tribune company.

Brendan Sasso, “Rep. Dingell ‘deeply disturbed’ by FCC’s response to query on spectrum sales,” The Hill, August 16, 2011

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Cited Article

Brendan Sasso, Rep. Dingell ‘deeply disturbed’ by FCC’s response to query on spectrum sales, The Hill, August 16, 2011

My Comment

Rep. Dingell should be granted an award (a nefarious one) for so blatantly advocating corporate welfare at public expense.  His shameless (but below the public radar) advocacy of giveaways to the broadcast industry over the last 20+ years has cost U.S. taxpayers tens of billions of dollars and done tremendous harm to the U.S. economy by thwarting the development of ubiquitous wireless broadband networks.  Dingell’s payoff?  Great TV coverage, including an insurance policy against negative coverage, in his Congressional district, which helps explain why he has been able to hold onto his seat for so long.

Kim Hart and Brooks Boliek, “FCC refereeing airwaves fight,” Politico, August 3, 2011

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Cited Article

Kim Hart and Brooks Boliek, FCC refereeing airwaves fight, Politico, August 3, 2011

My Comment

The educational TV programmers in the 2.4 MHZ band have had such a long history of lying about their existing and planned uses of spectrum that they should have no credibility by now.  But, of course, the FCC and the trade press have no recollection of such fraudulent statements (nor is there any indication that they would care if they knew), so history tends to just keep repeating itself.

It would be nice if reporters such as Kim Hart and Brooks Boliek had any interest or ability to tease out the BS.   Perhaps this is not surprising given that the owners of Politico are some of the most active spectrum lobbyists in the U.S. (they have significant commercial TV and radio holdings in addition to Politico)–a fact that Kim Hart and Brooks Boliek consistently fail to acknowledge.  It would probably be awkward to reveal the type of spectrum lobbying BS their bosses routinely endorse, so there may at least occasionally be more purposiveness to their shallow reporting than meets the eye.

Petition on spectrum giveaways on the White House’s new We The People website

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Dear Readers:

I wanted to let you know about a new petition on spectrum policy that I created on We the People, a new feature on WhiteHouse.gov.  Please consider adding your name to mine and passing along this petition to anyone else you think might support the cause..  The White House URL for the petition is: .http://wh.gov/2qN.

If this petition gets 5,000 signatures by November 02, 2011,
the White House will review it and respond!

We the People allows anyone to create and sign petitions asking the Obama Administration to take action on a range of issues.  If a petition gets enough support, the Obama Administration will issue an official response.

Below is a copy of the petition:

WE PETITION THE OBAMA ADMINISTRATION TO: require that spectrum lessees be charged market rates like other lessees of public assets such as land and buildings.

Since World War II, the Federal government has given away as much as $480 billion in spectrum rights to the private sector, including wealthy individuals and highly profitable corporations such as TV broadcasters, satellite operators, and mobile phone carriers. In the early 1990s, Congress mandated that spectrum rights be allocated by auction. But most spectrum rights have continued to be given away, often with a pretext of public interest obligations that are unenforced and later renegotiated. The Obama Administration has engaged in much talk about spectrum auctions and fees, but most spectrum rights have continued to be given away. When the government transfers spectrum rights from the American public to private corporations, the public should receive fair compensation for its property.

Cecilia Kang, Lightsquared, FCC faces criticism from Republican lawmakers, The Washington Post, September 29, 2011

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Cited Article

Cecilia Kang, Lightsquared, FCC faces criticism from Republican lawmakers, The Washington Post, September 29, 2011

Quote

“LightSquared chief executive Sanjiv Ahuja…added that the company received no special favors from the FCC.”

My Comments

This quote is rich, very rich, considering that the FCC has granted LightSquared billions of dollars of taxpayer assets without any public compensation.  Note that the Washington Post reporter provides no hint that LightSquared’s statement is misleading, to put it mildly.

Huffington Post article criticizing the spectrum giveaway in the President’s jobs plan

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Today the Huffington Post published my article criticizing the tacit spectrum giveaway contained in President Obama’s American Jobs Act of 2011.  The article, Soaking the Rich in Obama’s Jobs Plan?  Its multi-billion dollar spectrum giveaway undercuts the president’s populist message, is intended to provide background information for the related petition I sent to the White House’s We The People petition website (for details, see the preceding post below).

Paul Kirby, “TV Spectrum Compensation Blasted,” TR Daily, October 5, 2011

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TR Daily covers the column in the Huffington Post.  Here is the text:

TV SPECTRUM COMPENSATION BLASTED

J.H. Snider, president of iSolon.org, said in a column in “The Huffington Post” today that President Obama should amend his jobs legislation proposal so TV broadcasters don’t get the bulk of incentive auctions revenue for returning their channels.  “Specifically, the president should explicitly state how much of the auction proceeds will go to the public,” Mr. Snider wrote.  “He should encourage the Congressional deficit reduction super committee to close the many spectrum loopholes in government laws designed to prevent giveaways of public assets.  And given the Federal government’s demonstrated facility in conducting spectrum giveaways below the public radar, the president should propose accounting and other procedural reforms to reduce the incentives for such institutional corruption among his staff.”  Meanwhile, Senate Majority Leader Harry Reid (D., Nev.) said today the Senate will consider the American Jobs Act this month but that he won’t let Republicans force an up-or-down vote on the measure, as Senate Minority Leader Mitch McConnell (R., Ky.) attempted to do by moving to tack it onto another measure.  Also today, the Congressional Budget Office released its cost estimate for the American Jobs Act (S 1549), including an estimate of the net revenues that would be realized by Treasury as a result of spectrum auctions.  From 2012 to 2021, spectrum auctions would return $15.794 billion to the Treasury.

Whither Journalistic Ethics? Why Politico has fallen short in its coverage of spectrum issues

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Today the Huffington Post published my article, Whither Journalistic Ethics?  Why Politico has fallen short in its coverage of spectrum issues, on the newly launched Free TV and Broadband Coalition.  A copy is pasted below.

On October 15, 2011, Jim VandeHei, executive editor and co-founder of Politicospoke at the Harvard Kennedy School of Government’s Shorenstein Center on the Press, Politics and Public Policy about the business success and high journalistic ethical standards of Politico.

During the Q&A, I asked him about about the relationship between Politico‘s parent company, Allbritton Communications, and Politco‘s coverage of spectrum issues. Allbritton owns 7 local TV stations, including the ABC affiliate in Washington, DC. Spectrum licenses are arguably the company’s most valuable asset, and it has a very aggressive spectrum lobbyist, Jerry Fritz, Vice President for Legal & Strategic Affairs, who has served on the National Association of Broadcasters (NAB) Board and testified on its behalf before Congress. He is also very active in spectrum lobbying on behalf of broadcasters on the Hill and at the FCC.

I mentioned to VandeHei that Politico ran a front page puff piece on NAB President Gordon Smith (“Former senator Gordon Smith changes channel to TV’s woes,” June 1, 2011) and had published two high profile stories on incentive auctions (see “Lawmakers pan spectrum reform in debt bill,” July 27, 2011, “Tech cash floods debt panel,” September 11, 2011, and, an opinion piece, “Spectrum auction would be a winner,” October 11, 2011). However, in conflict with journalistic ethics,Politico did not mention this conflict of interest in the two articles on incentive auctions. It did mention in the Gordon Smith article that Allbittron Communications is an “affiliate” of Politico but then misstated and underplayed the relationship, saying Allbittron only “owns several television stations across the country” (it owns seven and they are the most valuable asset of Politico‘s parent company).

VandeHei replied with an anecdote that Politico had carefully considered such a disclosure when it covered the NBC merger with Comcast because one of its local TV stations is an NBC affiliate. But this response didn’t directly address my question. Moreover, an affiliate’s relationship with a network is a relatively trivial economic issue for Allbritton in comparison to the spectrum issues it has been reporting on. As much as 80% of Allbritton’s assets are in the form of spectrum licenses whereas the network affiliation agreement is probably worth well under 10%.

VandeHei’s final response to me was that he couldn’t reply until he had checked into the details of the Politico articles I cited. But he didn’t dispute that journalistic ethics required such a disclosure and that he was committed to high journalistic standards for Politico.

Now we have yet another high profile Politico story on this subject without a conflict of interest disclosure (“Spectrum feud lands before supercommittee,” October 24, 2011). The story itself is reasonably balanced (as well as well-written). One major substantive flaw is to use lobbying and campaign contribution expenditures to evaluate the relative political strength of the broadcast lobby versus its opponents, when any informed insider, including many senior Allbritton executives, would confidentially tell you the power of the broadcast lobby comes from its ability to intimidate members of Congress who depend on their local broadcasters both to get their message out and for an insurance policy against negative coverage .

The article vaguely hints at this political logic in its observation about local TV stations and political ads, but that is obviously a sideshow compared to the local broadcasters’ ability to control local TV news, which members of Congress live or die by.

Another substantive flaw with this and the other articles is that they don’t clearly convey that one of the most important and unresolved features of incentive auctions is what percentage of the proceeds will go to the public versus the broadcasters. The high-tech and mobile telephone industries could care less how much money the public gets for broadcasters’ use of the public airwaves. They just want access to the spectrum to sell lots of wireless gadgets and new services to their customers. If the price is that the public is ripped off so that the broadcasters receive a corporate welfare windfall, it’s no skin off their backs. They still get what they want.

Leaving aside the question of the actual content of Politico‘s spectrum policy articles, Politico‘s remarkably poor job of disclosing its own corporate conflicts in covering spectrum issues has practical consequences. Most notably, it serves to send a message of intimidation to Hill staff. The message is that media owners can use their control of the media to both lobby and reward friends/punish enemies without political accountability. The reason that every widely accepted code of journalistic ethics mandates that key conflicts of interest, such as Politico‘s spectrum interests, must be disclosed is to prevent just this type of misuse of power. The integrity of the journalistic enterprise depends on it.

Addendum

If you oppose spectrum giveaways at public expense, please sign the petition against spectrum giveaways on the White House petition website.
This is my third Huffington Post commentary on the proposed spectrum giveaway to the TV broadcasters that the White House, Congress, the FCC, and NTIA have either implicitly or explicitly endorsed. This one looked at media coverage of the giveaway. The previous two focused on the White House (Soaking the Rich in Obama’s Jobs Plan?) and the broadcast lobby (The Broadcast Industry’s Free TV Scam Redux). I hope to write another one on Congress.

Holman W. Jenkins, “Wi-Fi and the Mobile Meltdown:, ” Wall Street Journal, October 18, 2011

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Cited Article

Holman W. Jenkins, Wi-Fi and the Mobile Meltdown, Wall Street Journal, October 18, 2011

My Comments

Sounds like Jenkins is a paid lobbyist for the broadcast industry.  Oh, I forgot, his employer owns the largest TV broadcast network in the U.S.  Whatever happened to journalistic ethics, where staff journalists and reputable newspapers are supposed to disclose their conflicts of interest?

Jenkins, despite his breathless prose about the new, always seems to be about a decade behind in his spectrum theories.  He is the Ptolemy of spectrum commentators.  Always trying to fit the facts to his archaic theories than to adjust his theories to the facts.

John Eggerton, NAB: Spectrum Crisis “Manufactured,” Broadcasting & Cable, October 6, 2011

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John Eggerton, NAB: Spectrum Crisis “Manufactured,” Broadcasting & Cable, October 6, 2011

My Comments

In regard to the five points NAB raises in its letter:

1. Is there a spectrum crisis?

Answer: Yes.

2. Why has the FCC not conducted a complete spectrum inventory?

Answer: Because groups like the NAB, which has access to some 4 GHz of auxiliary spectrum, including the prime Electronic Newsgathering Band, would prefer that the public not understand how they underutilize these bands.

3. What is the value of free TV to society?

Answer: I’ve answered this question at length in my book, Speak Softly and Carry a Big Stick: How Local TV Broadcasters Exert Political Power, and my website www.SpectrumBS.info.  The answer, in short, is not what the NAB makes it out to me.  The story of Miltz Maltz, the NAB’s billionaire champion of Free TV, vividly illustrates my case.

4. Where can the millions of people who rely on free TV for niche foreign language and religious programming turn?

Answer: Just about anywhere online other than broadcast TV.

5. What would shuttering of TV stations do to the state of journalism?

Answer: Make broadband affordable and thus lead to a flowering of diverse information sources.

Sara Jerome, “White House Gets Specific—And Potentially Some New Critics—On Telecom Policy,” National Journal, September 13, 2011

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Sara Jerome, White House Gets Specific—And Potentially Some New Critics—On Telecom Policy, National Journal, September 13, 2011

My Comments 

Unless the President’s bill includes specific and credible
language designating the fraction of “incentive auction” proceeds
from the TV band that will go to the government, the CRS should score the
proceeds at zero dollars.

Paul Kirby, “Snider Blasts TV Plan,” TR Daily, October 25, 2011

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TR Daily covers The Broadcast Industry’s Free TV Scam Redux, published in the Huffington Post.  Here is the text:

SNIDER BLASTS TV PLAN

J.H. Snider, president of iSolon.org and a critic of TV broadcasters’ use of spectrum, blasted a proposal advanced by the Coalition for Free TV and Broadband, which represents low-power TV and translator stations, that would be an alternative to holding incentive auctions of broadcast spectrum (TRDaily, Oct. 20).  In a column on “The Huffington Post,” Mr. Snider called a cost-benefit analysis released by the coalition last week “breathtakingly amateurish, making numerous dubious assumptions.”  The analysis, prepared for the coalition by Business Analytix, Inc., estimates that the “broadcast overlay” plan that would allow broadcasters to offer broadband services would produce up to $62 billion for the U.S. Treasury between 2014 and 2026 and $215 billion when considering an unspecified number of years past that.  In his column, Mr. Snider said that “if the past is any guide, Congress will not likely care about such a slipshod analysis.”  But later he said, “The American public has long proved a sucker for such games. It’s been a long ride, and I don’t expect it to be over until the billionaires and their media conglomerates, with their sycophantic allies in Congress, have succeeded in upgrading their licenses from broadcast to broadband for chump change to the American public who own the airwaves.

Juliana Greenwald, “Walden Bullish on Spectrum Legislation’s Prospects,” National Journal, January 25, 2012

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Juliana Greenwald, Walden Bullish on Spectrum Legislation’s Prospects, National Journal, January 25, 2012

Quote

“Walden said the language included in his bill would ensure the FCC can’t pick winners and losers.”

 Comment

This is an absurd statement, given that Walden wants to rig the auction process, including FCC incentives, so that the public transfers tens of billions of dollars to one of the most politically powerful lobbies–the local TV broadcasters–without public compensation. If that’s not picking winners (well-connected industry interests) and losers (the public), I don’t know what is.

Gautham Nagesh, “Group backs calls for unlicensed spectrum,” The Hill, January 10, 2012.

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Gautham Nagesh, Group backs calls for unlicensed spectrum, The Hill, January 10, 2012.

Quote

“House Republicans argue the government should not pay for airwaves just to give them away again for free..”

 Comment

This is a case of the pot calling the kettle black. When did the broadcasters pay the government for their spectrum? The Republicans (and Democrats) are proposing to give the broadcasters tens of billions of dollars worth of spectrum rights plus revenue for spectrum that is owned by the public and that broadcasters never paid a nickel to the public for, except for what turned out to be bogus “public interest obligations.” It is unfortunate that the politics of the Wireless Innovation Alliance prevent it from addressing this issue because it would actually strengthen its case.

Brendan Sasso, “Senators blast House spectrum bill,” The Hill, January 9, 2012

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Brendan Sasso, Senators blast House spectrum bill, The Hill, January 9, 2012

Quote

“House Republicans argue the government should not pay to reclaim airwaves that it will then give away for free.”

 Comment

This is a case of the pot calling the kettle black. When did the broadcasters pay the government for their spectrum? The Republicans (and Democrats) are proposing to give the broadcasters tens of billions of dollars worth of spectrum rights plus revenue for spectrum that is owned by the public and that broadcasters never paid a nickle to the public for, except for what turned out to be bogus “public interest obligations.”