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RULES OF THE GAME

Let The Broadband Battle Commence

A War With Many Fronts Opens Over The FCC's Massive New Plan

For all the praise that has greeted the Federal Communications Commission's blueprint for a wired nation, the recently released National Broadband Plan sets up an inevitable clash of telecommunications lobbying titans.

Mandated by last year's economic stimulus bill, the FCC's broadband plan sets out to solve a basic problem: The demand for wireless services and gadgets is booming, but the U.S. is short on spectrum and trails internationally in broadband use.

 

Much of the FCC's 360-page solution, which seeks to have 100 million households online and proposes freeing up 500 megahertz of spectrum, is noncontroversial. But even its FCC authors acknowledge that portions will trigger fights. And it's the hotly contested details that now promise to pit influential industry stakeholders in a high-stakes struggle.

The multifaceted FCC plan covers the entire telecommunications universe and has the potential to boost both competition and regulation. It's the biggest FCC undertaking since the sweeping Telecommunications Act of 1996 and will require both exhaustive federal rulemaking and congressional action. And billions of dollars is at stake.

"This is more than the broadcasters versus the wireless companies," said Andrew Jay Schwartzman, president and CEO of the Media Access Project. "Everybody has a stake in how the spectrum is allocated."

 

Flash points that will likely dominate upcoming lobbying battles include: the FCC's plans to free up spectrum by asking broadcasters to auction it off and share in the proceeds; to shift FCC Universal Service Fund subsidies from digital to broadband services; and to regulate the video set-top box market, to facilitate Internet access.

The spectrum auction plan has already rung alarm bells in the broadcast industry. The auctions may not prove so voluntary after all, broadcasters warn, and could stifle innovations such as mobile TV. Broadcasters argue that their "one-to-many" transmission model is highly efficient and reaches underserved consumer groups.

"If there's a threat to free and local television, it's incumbent upon us to make those concerns known to members of Congress, who obviously have an interest in that," said Dennis Wharton, executive vice president of media relations at the National Association of Broadcasters. "Broadcasters are the conduit for members of Congress getting their messages out, often."

The NAB spent $11 million on lobbying in 2009, according to the Center for Responsive Politics, and has influential allies both at the FCC and on Capitol Hill. Some have already taken aim at the National Broadband Plan's spectrum allocation proposal.

 

"This is not only an industry that has jobs in every single congressional district, but they also have influence on elections," said Rob Atkinson, president of the Information Technology and Innovation Foundation, a pro-technology think tank. "So it's going to be a hard fight."

But broadcasters are competing with a new generation of telecommunications players, some of whom had little or no K Street profile a decade ago. These include wireless heavy hitters such as AT&T Mobility, T-Mobile USA, and Sprint Nextel Corp. They're represented by CTIA -- The Wireless Association, which doled out $5.6 million on lobbying last year, according to CRP.

Not to mention Internet behemoths such as Google, Microsoft and IBM, which also have a stake in freeing up the spectrum. The computer and Internet industry spent nearly $120 million on lobbying last year, according to a recent CRP report, compared with $38.8 million in 1998. Last year Microsoft's lobbying expenditures totaled $6.7 million, IBM's cleared $5.4 million and Google's stood at $4 million, CRP found.

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"There are a lot more players now who are certainly well funded, highly committed and see this as critical to their business interests," said Atkinson.

The push to bring broadband to rural and low-income households by reallocating the FCC's Universal Service Fund could also pit large companies such as Verizon against small, rural phone carriers. Public interest advocates will also weigh in, including such groups as the Public Interest Spectrum Coalition, which represents the Media Access Project, the New America Foundation and Public Knowledge, among others.

"Additional spectrum will soon be necessary to meet this rapidly rising demand," said Rep. Rick Boucher, D-Va., whose House Energy and Commerce communications subcommittee will hold a hearing on the FCC plan this week. "There are real questions about where that additional spectrum will come from."

The Senate Commerce Committee will also will hold an FCC hearing this week. Boucher has already drafted legislation to transition the universal service fund from telephone to broadband use and to require a government inventory of the entire spectrum. The House will act soon on both plans, he predicted.

The FCC plan will create winners and losers, sometimes within the same industry, say telecommunications experts. It will also set up an ideological struggle between free-market and public-interest advocates. So far, most of the players seem to agree that the nation needs more spectrum -- the rub is how to get it.

"The intellectual climate -- left, right and center -- is, I would argue, very, very strongly in favor of getting the spectrum into higher uses," said Atkinson. "In that sense, it should be a really interesting fight."

Don't Miss Today's Top Stories

Chock full of usable information on today's issues."

Michael, Executive Director

Concise coverage of everything I wish I had hours to read about."

Chuck, Graduate Student

The day's action in one quick read."

Stacy, Director of Communications

Great way to keep up with Washington"

Ray, Professor of Economics

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