Broadcasters Fight A Battle Of The Bands

WHEN THE government opened nearly 2 million acres in central Oklahoma to settlement--at precisely noon on April 22, 1889--some 50,000 would-be Oklahomans made a mad dash for prime territory. Now, more than a century later, a new land rush of sorts is underway. The competition this time isn't for government real estate but for slices of the frequency spectrum everybody from broadcasters to airplane pilots to cellular-phone addicts uses to reach out and touch each other. With wireless technology proliferating and digital television around the corner, spectrum space is destined to be among the most sought-after--and fought-over--commodities of the new millennium.

Think of the spectrum as a rainbow made up of hundreds of bands of color. The lowest bands, or frequencies, are the most desirable, because they require less transmission power than higher frequencies do. If the spectrum were real estate, the lowest frequencies--most of which are already locked up by broadcasters--would be beachfront property. The rights to spectrum space, which is ""owned'' by the government, used to be given away for free. But when the FCC held lotteries to parcel out spectrum space to the nascent cellular industry in 1982, speculators snapped up frequency bands, only to resell them at huge profits. This gave Washington an idea: it would auction the space, and Uncle Sam would pocket the cash. Since 1994, the government has raised $22.8 billion this way. (Theoretically, at least. The Feds have so far actually collected only a little more than half that amount.) FCC chairman Reed Hundt has joked that his agency's initials stand for ""Federal Cash Cow.''

But when any scarce resource is allocated, there are bound to be losers. Critics of the auction system say it takes spectrum away from the poor and gives it to the rich. ""The class they're causing a hardship to is the class they don't expect to pay them a lot of money,'' says Robert Schwaninger Jr., a Washington, D.C., telecommunications lawyer. Truck fleets and schoolbus operators, for instance, need spectrum for their radios but can't afford it. Meanwhile, he argues, the rapidly expanding mobile-communications industry is snapping up far more spectrum than it needs. Another drawback is that, to make spectrum space available for auction, the FCC has to take it away from current users, who tend to get reshuffled up to less desirable frequencies. The government also must be careful not to offload too much spectrum: it has needs of its own--air-traffic control, for instance.

Perhaps the target of the greatest resentment is the broadcast industry, which got its prime space back in the good old days--for free. ""Those who have come in and paid for it contend it's unfair that those who have long held spectrum have not had to pay the government,'' says Peter Ross, another Washington telecommunications lawyer. This spectrum envy has been heightened by the FCC's decision to ""loan'' additional space to the television industry for the planned rollout of digital TV next year. Television's defenders point out that it is a free service, unlike cellular communications, and that it will almost certainly have to return the extra space. Dennis Wharton of the National Association of Broadcasters denies that his industry hogs spectrum. ""Good God,'' he says, ""the military and some of these other users have loads more spectrum.''

Basically, everybody thinks the other guy has too much space. But the sniping and finger-pointing may not last forever. Prime spectrum space is limited, but the spectrum itself is infinite. Technological advances are already making it possible to operate some equipment at previously unusable frequencies, and we're getting better all the time at using choice space more efficiently. After all, why build a shack on the beachfront when you can erect a mansion?