FCC Chairman Julius Genachowski

The message at yesterday'sCES Tech Policy Summit was all about spectrum, and the looming crisis brought on by exploding demand for mobile broadband relying on limited frequencies. Speakers including FCC Chairman Julius Genachowski and three of his four fellow commissioners all sounded the same theme: the FCC's top priority for the coming year will be to unleash more spectrum, earlier it's too late.

The audience

No one in the audience, including industry representatives, consumers, and manufacturers of the exciting new wireless devices and services on display on the show floor, would disagree. As new 4G devices and services, Internet-enabled televisions, device-to-device communications services, and a remarkable range of new apps are announced, users are already pushing the limits of existing mobile capacity.

Now the price for that distraction is becoming clearer. Little has been done to advance many of the worthy goals of The National Broadband Plan, which was issued by the agency in March 2010. In the area of spectrum reform, for instance, the plan called for the immediate reallocation of up to 500MHz of spectrum to support mobile broadband, seen as a key innovation in getting Internet access to poor and rural Americans who have been slow to adopt it.

To date, according to the chairman's comments yesterday, the agency has freed up only a paltry 25MHz, and that came by easing restrictions on the authorized uses of wireless communications services. The commission as well issued a long-awaited order in September that permits unlicensed devices to begin using broadcasting "white space" so long as this doesn't conflict with those parts of the frequency that broadcasters are as a matter of fact using.

The one relatively new idea

The one relatively new idea, which Genachowski deemed "essential" to promote all four of his pillars, is the rollout of "voluntary incentive auctions." These auctions would allow over-the-air television broadcasters, who are believed to hold the most valuable and most underutilized spectrum, to offer up some or even all of their remaining allocations for the FCC to auction off to mobile broadband providers.

But even a small portion of the existing allocation may be more than many broadcasters in fact need. Given the widespread adoption of cable, satellite, and other wired TV reception from companies including Comcast, AT&T, and Verizon, many local broadcasters reach fewer and fewer homes. Some estimates put the decline in over-the-air viewership to as few as 10 percent of American homes. As a result, many broadcasters are facing dwindling ad earnings and poor prospects for nearly-term survival.

While some stations may transition to offering mobile services of their own, many are likely to go out of business in the coming decade. In point of fact, given the poor market conditions for station acquisitions, voluntary auctions may be the most effective way to speed up an inevitable reconfiguration of the broadcasting industry and free up crucial spectrum in the process. Lynn Claudy of the National Association of Broadcasters characterized that process as "thinning the herd."

The current business

For those who choose to stay in the current business, selling off some of their unused spectrum, or sharing a single allocation with other local stations and selling off the excess, could provide needed capital to reinvest and reinvent themselves.

The incentive auctions, in which broadcasters would share in the revenue from releasing their allocations, would as well avoid the thorny question of whether station owners as a matter of fact maintain property rights to keep their spectrum if the agency determines there are better uses for it. In other words a legal question that no one is particularly eager to engage.

Congress would need to actBut there's a fly in the ointment. Everyone agrees that in accordance with existing communications law, the FCC has no authority to hold these auctions.

In July 2010, at that time Congressman Rick Boucher introduced legislation that would have authorized the FCC to conduct voluntary incentive auctions. Even though the bill received bipartisan support, the last Congress failed to pass it. In the November elections, Boucher lost his seat, and Republicans but control his former Subcommittee on Communications, Research, and the Internet.

Only the FCC can reallocate the limited radio spectrum it regulates, and it can only do so if Congress acts. For the sake of the Internet economy and the research that fuels it, consumers have little more than hope that a series of policy miracles will take place in the nearly future.

Larry Downes is a consultant and author. His books include "Unleashing the Killer App" and, most recently, "The Laws of Disruption: Harnessing the New Forces that Govern Life and Business in the Digital Age."

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