Air for sale

broadcast signalsDespite a few attempts, air is still free – but airwaves aren’t: on January 25th, 2008, the U.S. government began auctioning off rights to frequencies in the 700 megahertz spectrum. These frequencies, which until now have been used to carry broadcast TV signals, are the last important part of the spectrum that will be available for the expanding mobile communications market. These airwaves are being sold (or to be more precise, licensed for ten years) by auction by the Federal Communication Commission – you can watch it gavel-by-gavel at the FCC’s Web site. The government hopes to raise $15 billion dollars from the sale, but various factors (particularly the stock market’s recent troubles) have kept bidding lower than expected.

Some observers have hailed the auction system as an improvement on earlier ways of allocating frequencies, such as comparative hearings and lotteries; as well, the FCC has attached a requirement of “open access” to a number of the blocks being auctioned. This would require that the eventual winner keep the spectrum open to any device or service that wanted to use it. Not surprisingly, Google – a champion of the open access concept – is thought to be one of the heavy bidders, though due to the auction’s rules the identities of all the bidders will be kept secret until the process is over.

While most people would agree that governments have a right and duty to regulate the airwaves – we don’t want cell phone chatter overlapping with air traffic control – the sale of broadcast frequencies raises some questions not touched on in the media discussion. The electromagnetic spectrum can’t really be said to belong to a nation or government in the way that oil or timber do, and even in the case of those resources most people today would say governments have a duty to do more than sell or rent them to the highest bidder. Rather, they have a duty of stewardship – making sure that resources are used in a responsible way, one that has the maximum benefit for the people of the nation.

Where are these desirable frequencies coming from? They haven’t been available before because TV stations were using them to broadcast their signals. Those signals will stop being broadcast when the “Analog Sunset” comes in 2009, and any TV that isn’t digital-ready will go blank without a converter box. (Within three years after that, cable stations will stop sending analogue signals as well, and the last analogue-only TV sets will become obsolete.) Here in Canada we have until 2011 to switch over, with some remote and Northern areas getting an unlimited extension. Unlike in the US, the government is not currently offering coupons to cut down on the cost of a converter box.

The upside? Better-quality antenna reception. Some consumers, according to the New York Times, have started to buy UHF antennas that can pick up digital signals, getting sound and picture that up to now had been the preserve of cable and satellite services. So when your local broadcasters go digital it could be good-bye cable bill – hello, free air.

For Classroom Discussion

  • Do you think it’s reasonable for governments to license parts of the broadcast spectrum to businesses? Why or why not? What considerations other than the size of the bid should the government have to take into consideration when granting licenses?
  • What responsibility do you think governments and TV broadcasters should have in converting from analogue to digital transmission? Should the Canadian government be subsidizing it through coupons for converter boxes, like the American government is? Why or why not?
  • Do you think consumers will keep paying for cable and satellite services if they can get similar quality picture and sound over the air, for free? If not, how might this change the economics of the TV business?

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