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The tangled web of broadcasting regulations

By | October 17, 2008, 7:53am PDT

Summary: The FCC is preparing to approve licensing of “white space” spectrum, which is good for the public even if it poses challenges for broadcasters and mobile networks who paid top dollar for the right to have fewer competitors. Likewise, though the NAB supports a delay in the switchover to DTV, Congress should reject such legislation. It’s time to get it over with.

I’ve been writing this blog for over three years now, and for the most part, have managed to write at least two posts a week. This month, however, has proven harder than most. Granted, I’ve never blogged through an election season (nor through the biggest financial meltdown since the Great Depression, but then again, as the Internet didn’t exist back then, its safe to say no blogger has), and I’m finding the idea generating part of my brain pumps out more politically-related stuff than technology-related posts. That is good for iReport, and it got me interviewed by CNN yesterday (shameless self promotion here), but it means I’m suffering from technology writers’ block from hell.

Interesting things are happening in the technology world, however, even if this blogger is as distracted as a two year old in a toy store.

It’s starting to look like the FCC may approve “white space” devices which use the unlicensed spectrum that exists between TV and other licensed channels. Personally, I think that is spectacular news, though I can see why broadcasters and mobile phone networks aren’t big fans of the idea. Those groups paid big bucks for owernship of spectrum, a price that not only reduces the potential number of competitors, but gives them a justification for charging higher prices.

“Public access” spectrum (which, in some ways, is what “white space” spectrum usage is all about) would challenge that model. It could make spectrum licensing a less valuable revenue spinner for governments, though that isn’t necessarily a bad thing. Europe hobbled the prospects of 3G (the high-speed successor to traditional GSM) by auctioning spectrum at such high prices during the boom-90s that it almost killed the market for such service (3G providers have a real trouble making a profit given the costs associated with spectrum ownership).

The loss in up-front licensing fees, however, is more than offset by the public benefit to be derived by lowering the barrier to entry for use of spectrum that can cover large areas. To be frank, maximizing licensing revenue and protecting a small pool of well-funded incumbents shouldn’t be an FCC goal. The National Association of Broadcasters (NAB), among others, may have vested interests which motivate them to continue the fight against such technology, but if the FCC truly has the public interest at heart, they should, in the end, fail in their challenge.

Of separate note, legislation will be introduced in Congress that aims to delay yet again the switchover to DTV. As things stand, analog broadcasting must end February 17th of next year. The NAB claims that 21.5 million are unprepared for the transition, though they are playing with numbers a bit. Only nine million US homes would be completely unable to receive any kind of television signal, while the rest just have a few TVs lying around the house that can’t accept over-the-air DTV signals.

That’s stretching things a bit, and so I think nine million is the real number that people should focus on. I understand the financial interest NAB members have in pushing for this legislation. Nine million fewer viewers after February 17th can reduce the value of advertising by some incremental amount.

On the other hand, there’s no better way to make people aware of the switchover than to have their televisions stop working. To quickly resolve the problem, I think the NAB should ensure that stores have information about vouchers for converter boxes so that they are ready when cave-dwellers come in wondering why their rabbit-eared TVs don’t work. Such a situation could be resolved in a few days, if handled correctly.

We’ve delayed the switchover too many times. Get it over with, already.

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John Carroll has delivered his opinion on ZDNet since the last millennium. Since May 2008, he is no longer a Microsoft employee. He is currently working at a unified messaging-related startup.

Disclosure

John Carroll

http://blogs.zdnet.com/carroll/?p=1412

Biography

John Carroll

John Carroll has programmed in a wide variety of computing domains, including servers, client PCs, mobile phones and even mainframes. His current specialties are C#, .NET, Java, WIN32/COM and C++, and he has applied those skills in everything from distributed web-based systems to embedded devices. In his spare time, he enjoys the world of digital video, and served as director of photography and editor on a feature-length film produced in Limerick, Ireland, as well as a low-budget production filmed in Los Angeles that used Panavision digital cameras (the same ones used by George Lucas in the later Star Wars episodes).

John worked in Microsoft's Mediaroom division from May, 2005 to May, 2008. He is co-founder of ForgetMeNot Software, a creator of unified messaging software targeted at telecommunications providers, where he currently works as Director of Technology.

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Yes, but...
John Carroll 21st Oct 2008
My thoughts on monopoly has evolved considerably, though not so much that I think governments should run around breaking up companies.

Open standards sell themselves, in my opinion, and governments must be very careful about choosing favorites.

TOO MUCH regulation in financial markets would mean government tries to define too tightly what kinds of financial instruments banks are allowed to use. In similar vein, I think there can be such a thing as managing IT markets too tightly.

I'm not inclined to advocate "death to antitrust" anymore. On the other hand, I also understand that there are credible reasons why Microsoft's dominance developed. You have to navigate that complexity very carefully.
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You get what you pay for.
Anton Philidor 17th Oct 2008
Unless, of course, you're a broadcaster. In that case, reducing the value of what you purchased from the government by suddenly allowing competitors is a good thing. You've been robbed, but the public gains by... something else happening.

What that something else might be is unknown and why it should be good for the public is hopelessly speculative. But you do know that some of all those $ millions you paid were wasted. And that lets you feel good about yourself.


John Carroll wrote:

The loss in up-front licensing fees, however, is more than offset by the public benefit to be derived by lowering the barrier to entry for use of spectrum that can cover large areas. To be frank, maximizing licensing revenue and protecting a small pool of well-funded incumbents shouldn?t be an FCC goal. The National Association of Broadcasters (NAB), among others, may have vested interests which motivate them to continue the fight against such technology, but if the FCC truly has the public interest at heart, they should, in the end, fail in their challenge.

[End quote.]

You're right, John. The government doesn't need the money and businesses never expect Washington to deal with them fairly. Whenever minds change money can disappear. Just part of the casino of dealing with regulatory agencies.


As you can see, the problem for me is, the bids are already in. And they won't be refunded. That to me makes the action... reprehensible is too strong, but inappropriate can work.
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You don't get what you pay for...
Anton Philidor 17th Oct 2008
... when you're among the millions who bought a television set awhile agoand have not yet responded to the government scheme to make money by creating, selling, and confiscating spectrum for resale.

When someone wanders in after being told the repairman can't help him because the government broke his TV... When someone arrives after being told that he has to buy a new TV or at least a box, he'll probably ask the salesman how much was required to bribe the feds. And that will lead to a lesson from the salesman on macro-economics.

So I'll allow for the educational value of the broadcasting change.


Mr. Carroll wrote:

On the other hand, there???s no better way to make people aware of the switchover than to have their televisions stop working. To quickly resolve the problem, I think the NAB should ensure that stores have information about vouchers for converter boxes so that they are ready when cave-dwellers come in wondering why their rabbit-eared TVs don???t work. Such a situation could be resolved in a few days, if handled correctly.

[End quote]

You're right, John. It's a Darwinian world with sudden catastrophic changes extinguishing the less adaptable.

Might I suggest, though, that as a kindness to the doomed the stores have a supply of boxes available so that people will not have to be watching their mailboxes each day frantically wondering if they'll miss The West Wing or whatever?
(Some of us lit out for the territories long ago. A quick look at civilization recently gave me a glimpse of Oprah's campaign to prove males a vicious species which must be hunted to extinction, and I returned relieved to the wilderness.)

At any rate, isn't a pamphlet on vouchers an unsympthetic response to the confused and disheartened?
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Offtopic and unrelated.
John Le'Brecage 18th Oct 2008
Hey, John C. I lost your e-mail address in a recent mechanical accident involving my PDA and a front-end collision with a Volkswagen. Could you e-mail me from it? The Microsoft one and the Swedish one bounces and I don't remember the Yahoo one.

We now return you to your regularly scheduled topic...

Oh, and I saw the airing of your interview on CNN. Chops and props boyo. It was obvious they gave you some respect.
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The yahoo one
John Carroll 20th Oct 2008
I have just sent you it. Respond if you get it.
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"the biggest financial meltdown since the Great Depression"
How does an unregulated free market sort this one out?
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It doesn't
John Carroll Updated - 20th Oct 2008
...though I think the big misunderstanding about markets is that, supposedly, government isn't involved. We have this bizarre notion that on the one side you'd have perfect capitalism with NO participation by the state, and on the other you have state control of the economy.

The reality, I think, is that capitalism is a state construct in the sense that the state must create a proper framework that harnesses the incentives created by markets. Regulation is a part of that.

There is a goldilocks principle, I think. Just as there is such a thing as too much taxation, there is such a thing as too much regulation. There was too much regulation in the 80s, and Reagan was right to push for deregulation. That turned into a 25 year mantra, however, and now, we've overshot, while at the same time keeping in place perverse subsidies (interest-related tax deductions, subsidized loans (indirectly) through fannie / freddie) that drove lots of people to speculate in real estate.

We both failed to understand the market principles of the housing market (basically, subsidizing massive indebtedness out of a misbegotten impression that home ownership above the natural level is desirable), skewing it through federal policies, while we also failed our responsibility to create the right framework through proper regulation.

I guess I'm saying that I don't think unregulated markets are ever desirable in capitalist societies (though different sectors require more or less, depending on circumstances; finance is an area particularly affected by lack of information). We don't want to go too far, of course, but regulation is essential.
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i agree
deaf_e_kate 21st Oct 2008
"The reality, I think, is that capitalism is a state construct in the sense that the state must create a proper framework that harnesses the incentives created by markets. Regulation is a part of that."

The same should work for the IT market as well with regards to monopolistic enterprises and open standards. Regulation and oversight must be there in order to keep the market ethical, fair and moral.
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Yes, but...
John Carroll 21st Oct 2008
My thoughts on monopoly has evolved considerably, though not so much that I think governments should run around breaking up companies.

Open standards sell themselves, in my opinion, and governments must be very careful about choosing favorites.

TOO MUCH regulation in financial markets would mean government tries to define too tightly what kinds of financial instruments banks are allowed to use. In similar vein, I think there can be such a thing as managing IT markets too tightly.

I'm not inclined to advocate "death to antitrust" anymore. On the other hand, I also understand that there are credible reasons why Microsoft's dominance developed. You have to navigate that complexity very carefully.

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