Airwaves sale is payoff for digital move

By John Dunbar

updated 2:53 p.m. ET Jan. 23, 2008

WASHINGTON - So far, the decade-long transition to digital broadcasting has mostly been about pain. Beginning Thursday, the public will start to see the gain.

That's when the government will begin auctioning off the airwaves that are being made available thanks to the transition. The auction will raise billions for the U.S. Treasury and the transition will free up badly needed space for emergency communications.

It's "probably the most important auction we've had to date and the most important one we're going to have in the foreseeable future," because of the quality of the spectrum, Federal Communications Commission Chairman Kevin Martin told The Associated Press.

The airwaves are currently occupied by television UHF channels 52 through 69. The spectrum can carry lots of information across long distances and easily penetrate walls. It is so desirable that analysts have taken to calling it "beach-front property."

"It's because of the unique characteristics of the spectrum, it's going to have the most significant impact on consumers we've seen in a while," Martin said.

He calls it the "key building block" in making wireless Internet service competitive with cable and DSL (digital subscriber line) offerings. Customers could do things like watch TV shows and transmit loads of data "wherever and whenever" they want.

Skeptics say Martin is overly optimistic.

The chairman's upbeat view of the auction persists despite the unexpected withdrawal of a new wireless firm that was expected to bid more than $1 billion and construct a national public safety network.

The government-mandated shift to digital broadcasting is being done for the long-term benefit of the public, though most American's don't understand it. A survey by the Association of Public Television Stations found that even among those who are aware of the transition, 77 percent said they do not know why it is taking place.

Congress first ordered an end to old-technology, analog broadcasting in 1997. But it wasn't until 2005 that it set a hard sunset date. All full-power television stations must stop broadcasting an analog signal by Feb. 18, 2009.

The Congressional Budget Office has estimated the auction will bring between $10 billion and $15 billion, though some estimates range to $20 billion and higher.

A total of $7.4 billion in proceeds will go to the general fund of the U.S. Treasury, which will help offset the federal budget deficit. Another $1.5 billion will pay for a coupon program that is subsidizing converter boxes that will be needed by over-the-air viewers who don't have digital televisions.

More of the funds will go to grants for emergency communications, including $1 billion to improve communications among different public safety agencies.

Public safety was always a prime selling point for the transition. Back in 1997, Congress mandated that a portion of the television spectrum — 24 megahertz — be set aside for emergency communications.

In July 2007, the commission approved new rules that would dictate the way the spectrum could be used, including a much-debated "open access" provision pushed by Martin.

Supported by search-engine giant Google and opposed by existing wireless carriers, it will allow customers to use whatever phone and software they want on about one-third of the spectrum being auctioned.

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