ACI Study Blasts Retransmission Regulations, Urges Reform

A new study by the American Consumer Institute Center for Citizen Research (ACI) finds that regulations put in place more than 20 years ago to protect TV broadcast stations from eroding market share will now have what it calls “a devastating impact” on wireless consumers.

The study, Consumer Welfare on Hold: The Unintended Consequences from Retransmission Consent Regulations on Spectrum Auctions, finds that these retransmission consent regulations are making broadcasting so lucrative that major TV stations will be reluctant to give up spectrum in future FCC wireless auctions. The study says that with wireless traffic “nearing capacity and predictions for continued rapid growth, Congress passed legislation designed to make wireless broadband spectrum available by holding auctions, whereby TV stations could voluntarily surrender use of TV broadcast spectrum in return for auction proceeds. To this end, incentivizing (compensating) TV stations to relinquish broadcast airwaves is the key to clearing and repurposing spectrum needed to meet growing wireless broadband service demand.” By relinquishing spectrum in return for auction revenue, TV station broadcasters could voluntarily stop broadcasting altogether, or they could continue broadcasting by either moving to a VHF frequency or sharing spectrum with other broadcasters. The study says that if broadcasters moved to another frequency, “they could (collectively) be reimbursed (up to $1.75 billion) for offsetting the cost of new equipment, retuning and preventing any loss in coverage that may result from the move. In the end, the process hopes to make as much spectrum available and take in as much auction revenue as possible, while repurposing the airwaves for wireless communications services, most notably for broadband Internet services.” However, the study continues, “retransmission consent regulations act to discourage TV stations from participating in the auctions. In other words, these regulations work counter to the policy goal of getting spectrum to its highest and best use, and they are at odds with achieving the National Broadband Plan.