FCC Wavelength Reassignment Presents Huge Financial Challenges

FCC Wavelength Reassignment Presents Huge Financial Challenges
July 7, 2010

Bruce Edward Walker

Bruce Edward Walker was managing editor of InfoTech & Telecom News from 2010 to 2012.... (read full bio)

When the Federal Communications Commission’s decided to reassign the 700 MHz wavelength, it inflicted untold costs on churches, clubs, and entertainment venues that previously employed wireless microphones. At the same time, the FCC generated $19.6 billion in revenue by selling off portions of the wavelength to private companies such as Verizon and AT&T in an auction that ended in March 2008. Now private companies and nonprofits are struggling to pay for new equipment made necessary by the FCC’s decision.
The transition to digital television completed in 2009 opened up the frequencies between 608 and 820 MHz, where many wireless microphones and other devices formerly operated. These include wireless microphones, guitars, and other instruments.
The spectrum is now reserved for companies that will expand their wireless communication potential, with a portion—known as Block D—set aside for public safety uses such as police and fire departments. All other groups were forced to replace their wireless equipment after June 12.
Small Groups Impacted
“The FCC decided, in its infinite wisdom, to sell bandwidth that we’ve been using for years for a variety of purposes,” said Daniel Hubbell, a sound engineer for the Midland Center for the Performing Arts in Midland, Michigan and a freelance soundman for concerts and corporate events throughout the United States. “The Center had to spend $40,000 in a struggling market for performance arts to replace the microphones and sound equipment needed to support them, which is a huge amount of money for a small organization such as ours.”
Michael Mason, president and general manager of CP Communications in Elmsford, New York, agrees with Hubbell: “The loss of any spectrum hurts all wireless users,” he said. “It negates thousands of dollars we’ve spent on engineering and equipment purchases.
Mason’s company rents sound equipment and designs sound and video systems for concert tours and other entertainment purposes. “In terms of equipment and manpower, my business has been forced to spend at least half a million dollars,” said Mason. “In terms of our industry, I would have to say that the FCC’s actions have cost us hundreds of millions of dollars.”
Private Companies Ignored
Scott Kahn, editor of MusicPlayers.com, an online magazine for musicians, noted the impact on musicians and performers: “Musicians and theater groups are forced to purchase new equipment, and their old equipment has zero value at resale because it’s illegal to use. Nice to see how our government treats musical artists and performers.”
Mason acknowledges the FCC has weighed reassigning the 700 MHz spectrum “for years,” but he says the concerns of his industry ultimately were ignored in favor of “interest groups.”
Mason added: “The bottom line is the government wanted to do it, so they did it.” As a result, Mason said, “Broadcasters’ licenses [required by the FCC for operating on the 700 MHz spectrum] are no longer valid.”
Kahn concurs with Mason’s assessment: “It's so hard to believe that the FCC – basically our U.S. government – sided with the commercial interests of companies like Microsoft, Verizon, and Google instead of the needs of performing artists, theater groups, broadcasters, and houses of worship.”
Emergency Responders Underfunded
The desirability of the 700 MHz spectrum for emergency purposes stems from the frequency’s capability to broadcast over long distances and through walls. The FCC auction, however, failed to meet the reserve price for the Block D portion, which is the spectrum set aside for emergency broadcast signals.
Mason says governments’ financial woes played a large part in discouraging Block D bids.
“Part of the problem is that the spectrum is reallocated to broadcast emergency signals,” said Mason. “But there’s no funding for these organizations to purchase the radio infrastructure [necessary to operate it],” he said. “Every county, state, local, and federal law enforcement, ambulance, and fire department is facing deep budget cuts. They simply can’t afford to make the changes, because they can’t afford to buy the new hardware.”
FCC’s Most Successful Auction
The FCC auction was declared the most successful of the commission’s history by then-Chairman Kevin Martin. The 261 rounds of bidding garnered nearly $20 billion in revenue, including a reported $16 billion from AT&T and Verizon.
However, Mason and Hubbell say the influx of cash to the FCC from the spectrum auction does little to assuage the financial losses experienced in their industry.
“There is a great financial impact,” said Mason. “And there’s no government rebates for the hundreds of thousands of dollars of wireless equipment I’ll have to replace that is now useless hardware that’ll end up in landfills,” Mason said.
“It’s costing us a boatload,” Mason added. “It’s something I have to live with, but I don’t have to be happy about,” said Mason.
Bruce Edward Walker (bwalker@heartland.org) is managing editor of Infotech & Telecom News.

Bruce Edward Walker

Bruce Edward Walker was managing editor of InfoTech & Telecom News from 2010 to 2012.... (read full bio)