Cable Wants In on TV Spectrum Auction

U.S. cable's strongest lobbying arm is urging the Federal Communications Commission (FCC) to give cable operators a fair shot at the coming auction of analog broadcast television spectrum, rejecting claims that cable's entry could bog down broadband competition and allow MSOs to hoard capacity.

In a filing issued with the FCC on May 23, the National Cable & Telecommunications Association (NCTA) called on the agency to reject proposals that would "flatly exclude cable operators and local exchange carriers from even participating in the 700 MHz auction."

Alongside arguments from NCTA, the Media Access Project and the Ad Hoc Public Interest Spectrum Coalition (PISC) are among those proposing that cable not be excluded from the auction, according to the filing.

As part of the transition from analog to digital, television broadcasters are on tap to relinquish their analog spectrum by Feb. 17, 2009. In concert, the FCC will spearhead an auction of that spectrum, which resides in the 700MHz band. Under Congressional mandate, the FCC must begin the auction of recovered analog broadcast spectrum no later than Jan. 28, 2008.

One proposal could have capacity being set aside for a "third pipe" in support a national broadband service, the NCTA said, citing recent comments by FCC chairman Kevin Martin.

"Structuring the auction to encourage certain specific bidders to create a 'national' broadband service certainly does not guarantee that outcome," the NCTA said in its argument against "predictive or biased auction rules...

"We challenge the proposal to engineer the auction toward a preordained outcome, and strongly oppose the exclusion of competitors from the auction process."

Instead of creating more competition, denying cable operators the opportunity to bid on spectrum could have the opposite effect, the NCTA claimed.

"In this case," the filing read, "tilting the scales in favor of particular bidders on the theory that they might provide a 'third national pipe' may, in fact, not only result in inefficient use of the spectrum but may actually undermine rather than promote vigorous broadband competition."

Further, the NCTA said full-fledged competition already exists, pointing to cable's ongoing battles with telco-provided DSL services, as well as satellite-delivered high-speed data offerings. The filing also addressed the emergence of "next-generation" wireless services based on WiMax as well as new wired options such as broadband over powerline (BPL). On the latter, the filing noted that DirecTV Group Inc. (NYSE: DTV) has recently hinted at a broadband strategy with BPL as the centerpiece.

"Absurd" is how NCTA termed the notion that cable operators would warehouse any spectrum won at auction to keep it out of the hands of competitors.

"The benefits of warehousing would be nonexistent, while the costs would be enormous," the filing reads. "Spending billions of dollars to purchase spectrum that they have no intention of using would be a useless allocation of resources engaged in a competitive battle with telephone companies, direct broadcast satellite (DBS) providers and others can ill afford to waste."

But recent history has caused some to at least wonder.

Last fall, SpectrumCo LLC -- a joint venture of Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , Time Warner Cable Inc. (NYSE: TWC), Advance/Newhouse (Bright House Networks ), and Sprint Nextel Corp. (NYSE: S) -- put forth a winning bid of $2.37 billion for 137 wireless spectrum licenses for the FCC's auction of advanced wireless services. So far, the parties in the consortium have provided little detail on how they plan to use that spectrum, noting only that they will "fully evaluate all options." Still, "becoming the nation's fifth wireless voice provider," is not among the options, the SpectrumCo companies said at the time. (See Cable Consortium Gets Licenses .)

The filing issued last week did not say how an operator might apply any spectrum obtained via the coming auction, but did express that MSOs could use it to enhance the "quality, efficiency, availability, and value of their existing services," or integrate it with a wireless services bundle.

— Jeff Baumgartner, Site Editor, Cable Digital News