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US TV spectrum sale ploy gets OK from FCC

Pipes to be squeezed into tighter slots

The smart choice: opportunity from uncertainty

The FCC has approved its own cunning plan of letting TV broadcasters sell off their unused spectrum for a slice of the future pie.

The hope is that TV companies can release 120MHz of radio space by rearranging their channels and squeezing some digital pipes into smaller slots. In turn they'll be rewarded with a cut of revenue generated on spectrum they never paid for.

US TV broadcasters were allocated the spectrum for terrestrial broadcasting, but with Americans increasingly using cable and satellite TV the FCC reckons this huge quantity of bandwidth could be put to better use.

The best way to efficiently use spectrum, as espoused by the UK regulator Ofcom, is to put a financial value on it and let the free market decide what it should end up being used for.

This is what will happen in the US, subject to a public consultation: broadcasters will not be force to sell off frequencies, but if they decide to do so then they'll get a cut when the FCC auctions them off.

This cut is supposed to cover the cost of retuning all the set-top boxes as the channels move around, and might also recompense broadcasters who decide to drop a channel or two. The National Association of Broadcasters is cautiously supportive of the plan, so long as all sell-offs remain voluntary, but if the auction value goes high enough then broadcasters will find it impossible not to sell up.

The auction value is based on the much-hyped "spectrum crisis" facing America, which assumes that the consumption of mobile data will continue rising at the rate it has over the last decade or so, and predicts dire consequences if 500MHz of spectrum isn't freed up before 2020.

It's true that we've squeezed about as much data as we can into the existing spectrum: 4G (LTE or WiMAX) is more about flexibility than increased capacity in the same bandwidth. But it is decidedly unclear if the appetite of mobile data, and the ability to pay for it, will continue to increase unabated. ®

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