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Are the Broadband Headwinds Lessening for Broadcasters?

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This week saw generally positive news for television broadcasters on the broadband front. First, the U.S. Court of Appeals for the D.C. Circuit ruled that the FCC does not currently have authority to regulate the network management policies of Internet providers. Aside from the fact that the Court’s ruling challenged the FCC’s ability to require Internet providers to treat all network traffic equally, i.e., to apply “net neutrality,” the decision also calls into question key aspects of the FCC’s ambitious National Broadband Plan, many of which assumed the FCC had broad authority to regulate the Internet. Because the Court struck at the very heart of the National Broadband Plan, the Court’s decision may undermine other aspects of the plan, including its controversial proposal to reclaim 120 MHz of spectrum from television broadcasters that we discussed in a previous post.

Another shifting wind came in the form of Verizon CEO Ivan Seidenberg, who publicly stated he does not believe there is going to be as great a spectrum shortage as the FCC predicts, and that “confiscating [TV] spectrum and repurposing it for other things, I’m not sure I buy into the idea that that’s a good thing to do,” and adding “I think the market’s going to settle this. So in the long term, if we can’t show that we have applications and services to utilize that spectrum better than the broadcasters, then the broadcasters will keep the spectrum.”

It is unclear whether the Commission will appeal the Court’s decision, and broadcasters still have a long way to go before they can breathe easier about their spectrum being repurposed for auction to wireless companies. Still, after being forced headfirst into a gale force national debate over the “best use” of their spectrum, any calming of those winds is certainly welcome.

While all this is good news for broadcasters, the FCC certainly isn’t giving up and going home. Just today, the FCC released its “Broadband Action Agenda” setting the timing for more than 60 rulemakings and other notice-and-comment proceedings, including a rulemaking involving broadcast spectrum reclamation scheduled for the Third Quarter of 2010. While the FCC’s authority over the Internet may be up in the air, it continues to exercise vast authority over broadcasters. One dark scenario (for everyone) is that the FCC rushes forward and reclaims broadcast spectrum, only to have its National Broadband Plan collapse before being implemented. In that situation, the damage to the public’s broadcast service would be done, the spectrum would still be auctioned, but likely with reduced demand (and excessive supply) driving down auction revenues for the government, and the public ending up no closer to the broadband nirvana envisioned by the FCC’s proposal.

Stay tuned, as this is a story that will be unfolding for quite a while.