Once upon a time, narrowband communications primarily were carried by wires while broadband services were carried over the air. These days, it is more likely the case that broadband flows over wires while narrowband communications fly through the air. Consider TV and voice: These days, about 10 million households rely exclusively on over-the-air TV broadcasts while 104 million households receive some or all of their video programming from a fixed wired subscription service.

 

There are about 276.6 million U.S. wireless users, and something on the order of 154.6 million fixed voice lines in service. So the trend is clear enough: most people watch TV using cable, satellite or telco mechanisms, rather than “broadcast” local TV. Also, while lots of people use landlines for voice, 64 percent of all voice lines are wireless.

 

In a non-political world without vested economic interests, and given an estimated industry need for about 800 MHz more wireless bandwidth, a rational policymaker might conclude that the rational thing to do is provide incentives for people and local TV broadcasters to switch their TV consumption to “wires,” freeing up spectrum to be used for new wireless services.

 

In the “real world,” such politically-charged changes face huge opposition, even though Federal Communications Commission officials have been talking about spectrum shortages quite a lot of late.

 

Federal regulators are considering taking back some airwaves from television broadcasters and auctioning them off to wireless companies to increase the availability of wireless broadband services. Though entirely rational, such proposals will face huge opposition from current holders of licensed spectrum.

 

The Consumer Electronics Association (News - Alert) has released a study suggesting an FCC auction of virtually all TV broadcast spectrum would raise as much as $62 billion, providing $12 billion in payments to broadcasters and about $9 billion to “migrate all households that rely on over-the-air broadcasts to subscription services,” the CEA said.

 

Whether there is political will to take such drastic action is questionable, though, given the fierce opposition local broadcasters will put up, despite the fact that only about nine percent of U.S. households still get their TV “over the air.” Presumably any transition plan would compensate local broadcasters for economic losses and subsidize video entertainment subscriptions.

 

Time does not appear to be on the side of local broadcasters, though. To use the real estate analogy, local TV broadcasting arguably does not represent the “highest and best use” of spectrum resources at a time when only nine percent of Americans continue to watch local TV signals delivered over the air, and there is massive demand for new mobile services with arguably higher economic benefits.