What if there were only a handful of roads available – and no room to build more? How would space on those roads be allocated? Who would be allowed to use them? According to what criteria?

And what about the people not allowed to use them? How are they supposed to get around?

Luckily, there are plenty of roads – for the most part. And more can always be be built to accommodate traffic increases.

Bandwidth spectrum – TV, radio and Internet – is another thing. There is only so much space available, more can’t be created – and demand for what space there is increases all the time. Broadband Internet and cell phones – technologies which didn’t even exist (or barely existed) as recently as the ’90s – now vie with traditional broadcasters (TV, radio) for limited space on the spectrum.

How to sort all this out?

That’s the FCC’s mandate, of course.

And – to the FCC’s credit – rather than award and withdraw bandwidth based upon arbitrary political considerations, a market-based approach to allocating bandwidth was conceived. A bandwidth auction was proposed. Space on the dial (so to speak) would be put up for bid; the idea being that market demand would best determine how to allocate this limited resource.

Of course some bidders would win and others would lose – as is inevitable with any auction. In the case of this auction, the losing bidders were old-school radio and the smaller – mostly rural – broadcasters.

In a normal auction, there is no problem with high bidder wins.

But in the case of this auction, the losers aren’t just the smaller, mostly rural broadcasters who lost bandwidth slots or were otherwise disadvantaged by the FCC’s actions. The audiences of these smaller broadcasters also stood to lose out. Local programming – for example, coverage of high school sports events – might not be covered by the larger providers, who cater to a more national audience.

But spectrum is a public resource. It isn’t created by broadcasters – it simply exists. The FCC’s job is to make sure access to this public resource isn’t denied. 

To counterbalance the repacking of spectrum via this auction, a fund was set up to compensate the smaller broadcasters for some of their losses and to assure that rural viewers/listeners and surfers would still be able to get local coverage as well as access to high-speed Internet service. Access to high-speed broadband Internet – which is taken for granted in urban areas – is still spotty in rural areas.

The problem is the fund lacks funds.

About $1.75 billion was set aside initially, but this was based on estimates of the costs associated with the auction. And as is often the case with government estimates, the actual costs incurred by the FCC’s bandwidth auction turned out to be higher; the funds originally allocated aren’t enough to cover the tab.

In particular, the tab which was handed out to so-called Low Power Television Stations (LPTVS) – i.e., local TV stations – which was not included in the original funding allocation; nor the tab handed out to local radio stations. Some of these got “bumped off” the space on the spectrum (or dial) they previously occupied and had to move to a new space. Some may just go away for good. 

House Communications Subcommittee Chairman Greg Walden (R-OR) said earlier this month it was a “mistake” that LPTVs and smaller/rural radio stations were not made whole for their losses via the original fund – and that they should be given the compensation which they were led to believe would be given them. 

These losses – to return to the road analogy – are not unlike those imposed by the government when it uses eminent domain to take physical property for public purposes. The government has the lawful power to do this – but it also required by law to make whole the owners of the land taken for public purposes.

Fair market value must be paid as compensation.

Loss of bandwidth as a consequence of government action amounts to the same thing – and the owners are, arguably, just as entitled to compensation when a “taking” of this sort occurs.

A new Broadcast Repack Fund has been proposed for exactly that reason. It would cover the original shortfall – and compensate the LPTVS, as well as the smaller, regional radio stations affected by the auction and subsequent “repack” of spectrum.

It has a clunky name – the Repack Airwaves Yielding Better Access for Users of Modern Services Act of 2018 – but that shouldn’t be held against it. Lawmakers on both sides of the aisle support funding it; a vote is expected to take place sometime over the next several weeks as part of broader legislation re-authorizing the FCC itself.

When government takes, it ought to give back.

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