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

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

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

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

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

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

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”).