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LAS VEGAS–Federal Communications Commission Chairman Julius Genachowski urged TV broadcasters to partner with the wireless industry to grow their businesses, instead of fearing mobile operators.
Speaking at the broadcast industry’s annual trade show here today, the chairman, whose agency is preparing to auction off more TV spectrum to wireless broadband providers, said that TV broadcasters have nothing to fear from the wireless carriers that want their valuable wireless spectrum. And he encouraged them to work with the wireless industry to find new ways of distributing their content.
“Mobile is an exciting, new platform for exactly what broadcasters do, which is produce great national and local content,” he said. “If you look back, cable was initially resisted by broadcasters. But ultimately, it’s been a boon for the broadcast industry. And given the new economic models, the same thing could happen to mobile.”
Genachowski, who was being interviewed onstage at the NAB Show, provided this comment as an answer to a question about concerns broadcasters have regarding the upcoming incentive spectrum auction.
Last year, Congress authorized the FCC to hold the first ever dual reverse auction and forward auction, in an effort to recover additional wireless spectrum to be used for wireless broadband. The FCC is designing the auction so that TV broadcasters, who choose to participate, can give up all or some of their wireless spectrum in exchange for compensation from the government after the forward auction takes place. At the same time, the government will then auction off the relinquished spectrum to wireless operators.
As part of the effort, some broadcasters not participating in the auction will be forced to move to different channels as the agency attempts to create a license scheme that allows wireless carriers to win enough nationwide licenses to build a contiguous network. The process for designing the auction is complicated, and it’s fraught with controversy. Many TV broadcasters are worried that they will see diminished coverage as a result of the changes.
Genachowski tried to reassure them that the agency intends to follow the statute and would minimize any disruption to the remaining broadcasters. He added that broadcasters should look to the wireless industry as potential partners instead of enemies vying for the same resources.
“The incentive auctions have often been depicted as a zero-sum game between the mobile industry and broadcasters,” he said. “And I don’t see it that way.”
Broadcasters and TV Everywhere
Some broadcasters have already begun to realize that consumers no longer watch TV exclusively on their big screens in the living room. They are watching TV on the go on their smartphones or in other parts of the home via tablets.
This week, News Corp.’s Fox TV Network took a step forward in expanding the reach of its broadcast content. In a meeting with its affiliates at the NAB Show, Fox said it would allow these local broadcasters to partner with broadband providers to create apps that would stream their live broadcast content via the Internet. ABC is also talking to affiliates about allowing the same thing.
This means that local Fox stations throughout the country will be able to create an app as part of a local cable provider’s TV Everywhere initiative so that subscribers could view local, live TV on their tablets and smartphones. This is exactly what consumers are using new services, such as Aereo, to do. Aereo uses an antenna array to capture local broadcast TV signals, and then it transmits those signals over the Internet, so that viewers can watch live, local broadcast TV on their smartphones, tablets, and laptops.
Several broadcasters including Fox and CBS, which owns CNET, are suing Aereo, claiming that the company is stealing its content since it’s not paying a fee to retransmit the local broadcast signals. They want the service shut down. Last week, broadcasters suffered a setback in their legal battle when a federal appeals court upheld an earlier decision that favored Aereo. On Monday, Chase Carey, president of News Corp., which owns Fox, threatened to take all of Fox’s content to a subscription model if the Aereo situation is not settled favorably. Other broadcasters, including CBS, said they might consider doing the same.
Chairman Genachowski declined to comment on the Aereo service or the legal wranglings associated with it, but he said that competition from other platforms is good for consumers. And it’s good for the industry. He emphasized that the wireless industry could help broadcasters better compete.
A wolf in sheep’s clothing?
Still, TV broadcasters may have reason to be suspicious of the wireless industry. Not only are wireless operators very interested in any and all broadcast spectrum, but they too are looking to offer mobile TV services to consumers. And these services could compete directly with efforts launched by broadcasters. For example, Verizon CEO Lowell McAdam, who was interviewed here at NAB yesterday, talked up his company’s plans to stream live events such as the Super Bowl over its LTE wireless network.
While many in the TV industry believe that broadcasters need to take their content mobile, not all of them think it’s a good idea to partner with the wireless industry to do it. Gordon Smith, CEO of NAB, believes that broadcasters need to innovate themselves. During his keynote address on Monday, he pushed local affiliates to adopt mobile DTV technology, which transmits broadcast TV signals directly to mobile devices like smartphones and tablets, as well as emerging technologies that will make it easier to deploy mobile TV.
“The time has come for us to unite in our embrace of new technology and to realize the consequences if we don’t,” he said. “As consumers’ appetite for local TV on the go continues to grow, broadcasters must continue to rise up to meet consumers’ desire for more live, local TV content. We must seize the opportunities that new technology platforms present to broadcasters — otherwise, we are essentially handing our competitors the keys to our future.”
