The Chair of the Federal Communications Commission unveiled a key component of the agency's impending National Broadband Plan on Wednesday: a program to free up 500MHz of spectrum over the next decade for the mobile wireless industry. The agency will propose a "Mobile Future Auction" that will allow television broadcasters in "spectrum starved" markets to "voluntarily relinquish" licenses in exchange for a cut of the auction proceeds.

Speaking at the New America Foundation, FCC chief Julius Genachowski gave yet another "looming spectrum crisis" speech, warning that mobile high speed Internet—which the government has clearly made the centerpiece of broadband development—must have more licenses to meet exploding demand. He cited figures from Cisco that by 2014, North American wireless networks will carry 740 petabytes of data per month.

"Now even if you think a petabyte is something that sends you to the emergency room, you know that that’s a game-changing trajectory," Genachowki quipped. "Although the potential of mobile broadband is limitless, its oxygen supply is not," he added. "Spectrum—our airwaves—really is the oxygen of mobile broadband service. Without sufficient spectrum, we will starve mobile broadband of the nourishment it needs to thrive as a platform for innovation, job creation and economic growth. And the fact is America is facing a looming spectrum crunch."

Genachowski said that the FCC will work with the Department of Commerce's National Telecommunications & Information Agency on developing the 500 MHz plan. The NTIA's proposed budget for 2011 indicates that 500 MHz project "will focus on making spectrum available for exclusive use by commercial broadband providers or technologies, or for dynamic, shared access by commercial and government users."

Volunteers needed

The FCC's boss has to maneuver somewhat gingerly around this issue. The broadcasting industry has given a distinctly cold reception to wireless and consumer device maker proposals for ways that television license holders could dramatically reconfigure their high altitude, high power transmission systems to free up as much as 180 MHz of spectrum. Now the FCC and NTIA are talking about 500 MHz.

So Genachowski emphasized that this would be a "voluntary program."

"While overwhelmingly—roughly 90%—of Americans receive their broadcast TV programming in most major markets through cable wires or satellite signals," he assured broadcasters, "there are still millions of Americans who receive TV through over-the-air antenna TV. Broadcasters would be able to continue to serve their communities with free over-the-air local news, information, and entertainment; and they would be able to experiment [with] mobile TV."

But the spectrum for the FCC's grand broadband plans has to come from somewhere. As we've reported, last week Genachowski disclosed that the document will call for 260 million people to have 100Mbps Internet access by 2020. So Wednesday's speech was laden with phrases like the "current inefficient spectrum allocation," and bore down on what Genachowski called the "broad range of analysts" who say that there's wireless broadband gold in those TV spectrum license hills. He cited studies suggesting that $50 billion in value could be unleashed if even some licenses could be transferred to broadband use. About 300 MHz of spectrum has been reserved for broadcast TV, he noted. But "even in our very largest cities, at most only about 150 megahertz out of 300 megahertz are used."

"The Mobile Future Auction is a win-win proposal," Genachowski concluded, "for broadcasters, who win more flexibility to pursue business models to serve their local communities; and for the public, which wins more innovation in mobile broadband services, continued free, over-the-air television, and the benefits of the proceeds of new and substantial auction revenues."

Magic bullet

We contacted the National Association of Broadcasters to see if they saw this proposal in win-win terms.

"As a one-to-many transmission medium, broadcasters are ready to make the case that we are far and away the most efficient users of spectrum in today's communications marketplace," NAB Vice President Dennis Wharton circumspectly told us. "We look forward to working with policymakers to help expand the roll-out of broadband without threatening the future of free and local television, mindful of the fact that local TV stations just returned more than a quarter of our spectrum following our transition to digital."

Expect broadcasters to emphasize, as you just read, that the TV industry just completed the DTV transition, and that Verizon and other winners in the 2008 700 MHz auction have yet to fully use their newly bought spectrum. But Genachowski noted that the license crunch exists despite these realities. "New technologies allow—indeed, they require—new strategic planning to ensure the most efficient use of spectrum, a vital public resource, especially given our broadband needs," he explained.

Needless to say, the wireless industry is quite happy with the government's plans. CTIA's President and CEO Steve Largent called the speech a "tremendous step forward." Communications lawyers also say it's pretty huge. The address "should erase any doubts that the National Broadband Plan will announce that more spectrum for mobile broadband is the magic bullet," Washington, D.C. attorney John Hane told us. "The FCC is going far beyond spectrum policy or even broadband policy—this is a statement of general federal industrial policy, and it reflects the views of the Administration generally, not just the FCC."

Hane advised spectrum owners to start paying close attention to where this goes. "Broadcasters and other spectrum incumbents better be vigilant and smart," he warned. "Incumbent wireless providers should be wary too—if they aren't using spectrum to its fullest capacity, they could be at risk."

The FCC's National Broadband Plan will be unveiled at its upcoming Open Commission meeting, scheduled for March 16.