After a ten-year stalemate in the epic war with Troy, Greek
king Odysseus devised a clever ruse that would become the stuff of legend. He
built a large wooden horse, placed it outside the city gates, and waited for
the Trojans to take it in. Believing the
war to be over, and the horse to be a gift, the unwary Trojans accepted it
against the advice of Cassandra and Laocoon, who warned their compatriots to
beware of Greeks bearing gifts. Led by
Odysseus, Greek soldiers lying in wait, dropped from the Trojan horse that
night and sacked the city. Troy succumbed
and Greece lives on today.
This tale contains a modern day moral if we cast the
government as Greeks and the broadcasters as Trojans. Over the next few years, the U.S. government is
scheduled to auction some of the most valuable airwaves, or spectrum, owned by television
broadcasters to make way for more wireless and mobile services. This gift to America's future is courtesy of
President Obama, former FCC Chairman Genachowski, and a penurious Congress who
endorsed the plan in 2012--all, of course, to advance broadband and the public
interest.
Today, we are less than a year away from the scheduled broadcast
incentive auction, but all is not well.
FCC Chairman Tom Wheeler pitches the sale as a “once-in-a-lifetime
opportunity”, implying the quest for spectrum soon could come to a close.
Given such talk, broadcasters might want to heed Laocoon's advice. Nothing
about the proposed auction is what it purports, which could explain why the
National Association of Broadcasters (NAB) has opted to sue the FCC.
In exchange for their valuable spectrum holdings,
broadcasters ostensibly will receive serious cash. But this is a decision not to be taken
lightly. It portends a drastically and
indelibly changed communications landscape, which tilts invariably in favor of the
wireless industry. The first installment
of the tripartite auction yielded over $40 billion for the sale of AWS-3
wireless spectrum. This was double the
most liberal projection, and has ushered in a new stage of anticipatory irrational
exuberance for the broadcast spectrum to come.
To be fair, the prospect of gaining tens, if not hundreds,
of millions of dollars for underutilized spectrum is hard to argue
against. For some broadcasters, this would
be a long-overdue reward for years of thankless toil in the vineyards. After all, the auction is completely
voluntary. And yet, relinquishing a scarce and irreplaceable resource, at any
cost, could spell the end of broadcasting as we now know it, especially as
those left standing are "repacked" into new and unfamiliar spaces. If there is a broadcast victory to be had, it
may be pyrrhic. Once sold, the spectrum
is forever gone, and with it a unique nexus and claim to communities across
America.
Of course, the market is anything but predictable, and the incentive
auction could prove too complicated, contentious or concessional for broadcasters
to embrace wholesale. While some hope for such an outcome, the die appears to
be cast. The cruel irony, however, is
that broadcasters have been the most reliable partners to government--ever present
through disasters, emergencies, and times of trouble. In exchange for such enduring loyalty, the
government has proffered a scheme to reallocate spectrum that may be predatory,
if not altogether plunderous. The fact
that it is voluntary does not lend it verisimilitude.
Broadcasters were once known as a hearty bunch. To prevail in the broadband future, they will
need every bit of wit to survive this latest Trojan horse. The prescient among them should unfurl the
warning flags when the government flashes an incentive, subsidy, or credit to
motivate industry complicity. And lest they forget the admonition of Cassandra,
if a gift looks too good to be true, it probably is, even if left at the front
gate of your once-impenetrable fortress.
An abbreviated version of this blog was published in The New York Times
(c) Copyright. Adonis E. Hoffman, 2015. All rights reserved.
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