FCC holds a few aces on spectrum

While the congressional battle to pass spectrum legislation may have ended, the process of actually getting spectrum into the hands of wireless companies and making it available for smartphones, tablets, and other wireless technologies has just begun.

And how much of that spectrum will be available rests in large part on how good of a job the Federal Communications Commission does in persuading broadcasters to give up some of their airwaves. In fact, many of the key provisions in the spectrum legislation that lawmakers passed as part of a payroll-tax package hinge on how much spectrum broadcasters choose to give up and how much money the FCC can generate from selling their airwaves. The money from these auctions would come from wireless operators who will bid for spectrum they say they desperately need to meet the nation's growing use of wireless technologies. The FCC is under pressure to design the auctions in a way that would generate the most revenue possible given that the proceeds have been slated to pay for a variety of proposals. They include $7 billion to help pay to build a national broadband network for public safety officials. At the same time, lawmakers are counting on $15 billion for the federal Treasury after paying off broadcasters for giving up their spectrum. Broadcasters "have leverage and if the price isn't right ... most everything falls flat on its face," said Jeffrey Silva, a senior policy director with Medley Global Advisors.