Order Code RS22218
Updated January 10, 2006
CRS Report for Congress
Received through the CRS Web
Spectrum Use and the Transition to Digital TV
Linda K. Moore
Analyst in Telecommunications Policy
Resources, Science, and Industry
Summary
The United States, like most of the world, is moving to replace current television
technology with a new, technically superior format generally referred to as digital
television (DTV). As part of this transition, Congress is seeking to provide the impetus
that would move television broadcasters out of 700 MHz spectrum currently in use for
the old, analog technology — thereby ending these broadcasts. Channels at 700 MHz
would subsequently be available for other uses. Both public safety communications
networks and commercial advanced wireless service companies are eager to have access
to frequencies already designated for their use but not released. In addition, budget
reconciliation (S. 1932) requires that some of the cleared spectrum be auctioned to
contribute at least $7.363 billion toward closing the budget gap. The Conference Report
(H.Rept. 109-362) of the bill also sets a date of February 17, 2009 for the release of the
spectrum, with auctions scheduled for 2008. Among specified uses of the auction
proceeds are funds to facilitate the transition to digital TV. The Digital Television
Transition Act of 2005, included in the Deficit Reduction Act of 2005 (H.R. 4241),
contained some sections that were omitted in the Conference Report; these included
provisions for must carry of digital broadcasts, cable and satellite transmissions, and
spectrum allocation requirements. Some of these issues are addressed in other bills or
could be reintroduced in new legislation during the 2nd Session. Other bills in the 109th
Congress dealing with the transition to digital television and spectrum use include H.R.
1646 (Representative Harman), S. 1268 (Senator McCain), and S. 1600 and S. 1767
(Senator Snowe). This report will be updated.
The Scope of the Debate
Broadcasters are currently using radio frequency channels in the 700 MHz1 band for
analog-technology television that will be vacated as they switch to digital broadcast
1 Wireless (radio frequency) spectrum is measured in cycles per second, or hertz (Hz). Standard
abbreviations for measuring frequencies include kHz — kilohertz or thousands of hertz; MHz —
megahertz, or millions of hertz; and GHz — gigahertz, or billions of hertz. Spectrum allocations
are assigned within bands that are divided into bandwidths or channels.
Congressional Research Service ˜ The Library of Congress

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technology. Communications managers for public safety are waiting to build new
networks on channels at 700 MHz that have been assigned to them but are not yet
available. Companies that have purchased the few channels made available for auction
in recent years would like to move forward with new services; this group is represented
by The 700 MHz Advancement Coalition.2 Another industry group urging the early
release of spectrum is the High Tech DTV Coalition.3 Its members would like to use
frequencies at 700 MHz to deploy new technologies, such as WiMAX (Worldwide
Interoperability for Microwave Access), that support high-speed Internet access and new
services such as DTV to wireless devices. Spectrum not already assigned will be
auctioned to providers of these new services. The Congressional Budget Office has
reportedly placed an auction value of $12.5 billion on this spectrum.4 The Deficit
Reduction Act of 2005 (S. 1932) allocates $7.363 billion of these auction proceeds toward
closing the budget deficit.5 Other provisions of the budget resolution relating to the
digital television transition are summarized below.
Deficit Reduction Act
Not all the issues that Congress would like to resolve regarding the transition to
digital television have been included in the budget reconciliation process; these could be
treated in other bills being prepared for introduction. Among the provisions in the
Conference Report for S. 1932 (109-362) are:
! Set a definite date of February 17, 2009 for the release of spectrum at
700 MHz currently held by broadcasters [Section 3002, (a) (1) (B)].
! Require auctions by the Federal Communications Commission (FCC) of
the freed spectrum to begin not later than January 28, 2008 with funds
deposited not later than June 30, 2008. [Section 3003, (a) (1) “(v)].
! Extend the FCC’s authority to hold auctions, which currently expires in
2007, until September 30, 2011 [Section 3003 (b)].
! Create a fund, the Digital Television Transition and Public Safety Fund
[Sec. 3004 (3) “(E) “(I) and (ii)], to receive spectrum auction proceeds
and disburse designated sums to the Treasury and for other purposes.
Among these purposes are: a program that would expend up to $1,500
million on coupons for households toward the purchase of TV set top
boxes that can convert digital broadcast signals for display on analog sets
[Sec. 3005]; a grant program of up to $1,000 million for public safety
2 See [http://www.700MHz.org/]. Viewed December 21, 2005.
3 Formed April 2005. Members include Alcatel, Aloha Partners, AT&T, Dell, Cisco Systems,
IBM, Intel, Microsoft, Qualcomm, Texas Instruments and a number of associations. See
[http://www.dtvcoalition.com/]. Viewed December 21, 2005.
4 A previous estimate of $10 billion was increased to $12.5 billion as reported in “Deadline for
Digital TV Transition Is Now All But Final,” by Amol Sharma, CQ TODAY, December 21, 2005
- 1:25 p.m.
5 S. 1932, Sec. 3004 (3) “(E) “(iii).

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agencies to deploy systems on 700 MHz spectrum they will receive as
part of the transition [Sec. 3006]; payments of up to $30 million toward
the cost of temporary digital transmission equipment for broadcasters
serving the Metropolitan New York area [Sec. 3007]; payments of up to
$10 million to help low-power television stations purchase equipment
that will convert full-power broadcast signals from digital to analog [Sec.
3008]; a program funded up to $65 million to reimburse low-power
television stations in rural areas for upgrading equipment from analog to
digital technology [Sec. 3009]; up to $106 million to implement a unified
national alert system and $50 million for a tsunami warning and coastal
vulnerability program [Sec. 3010]; contributions totaling no more than
$43.5 million for a national 911 improvement program established by the
ENHANCE 911 Act of 2004 (PL. 108-494)[Sec. 3011]; and up to $30
million in support of the Essential Air Service Program [Sec. 3012]. The
fund and disbursements are to be administered by the National
Telecommunications and Information Administration.
The Conference Report for the Deficit Reduction Act was passed by the House on
December 19, 2005. Changes on points of order were made by the Senate, which
consequently returned the bill to the House. The provisions summarized above were not
affected. The House reportedly is expected to take up the budget reconciliation bill when
it reconvenes on January 31, 2006.6
Possible Future Legislation
If the budget reconciliation process flounders, it is possible that legislation will be
introduced to provide for spectrum release dates, auctions, and plans to assist the
transition to digital television covered in the Conference Report. Also, legislation could
be introduced to cover provisions from other bills that were not in the Conference Report
of S. 1932. A pivotal issue that may be reconsidered for legislative action is whether
cable systems and satellite televison should be required to carry all the programs of over-
the-air broadcasters. Must-carry provisions in the 1992 Cable Act7 set the requirements
for cable television companies to carry local television programs transmitted by over-the-
air broadcasters. Under the act, the FCC regulates televison transmissions and must carry
rules. With analog technology, broadcasters can transmit only one over-the-air channel
of programming on a specific frequency allocation. Digital technology can handle three
to five, or possibly six, broadcast streams simultaneously.8 Taking regulatory steps to
clarify the application of must carry rules to digital broadcasts, the FCC ruled that cable
operators are not required to carry more than a single digital programming stream,
referred to as the primary video, from any particular broadcaster. The House Digital
6 “Final Action on Budget Deferred,” by Steven T. Dennis, CQ Weekly - Weekly Report Budget,
December 26, 2005.
7 The Communications Act of 1934 as amended by the Cable Television Consumer Protection
and Competition Act of 1992 (P.L. 102-385, “1992 Cable Act”); 47 U.S.C. §521 et seq. Similar
rules apply to satellite television as of January 2002.
8 As part of the digital transition, most broadcasters received the same amount of spectrum that
was required for a single, analog channel (6 megahertz). Digital technology uses spectrum more
efficiently and is expected to become even more efficient in the future.

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Televison Transition Act supported current FCC rules that require must carry for a single
primary video stream only (not multi-casting must carry).9 It also contained provisions
covering delivery of signals by satellite companies10 and would have modified existing
law so as to permit cable companies to retransmit digital signals in a downgraded, analog
mode.11 Also eliminated from the Conference Report were provisions touching on band
plans and access to auctions by small wireless companies.12
Spectrum Allocation and Auctions
Although estimates vary, spectrum auctions of frequencies in the 700 MHz band
have typically been projected to gross $20 billion to $30 billion.13 Revenue potential is
dependent on a number of factors, including timing of auctions and the date at which
spectrum will be cleared and available. Estimates for the amount of revenue raised from
spectrum auctions assume that 60 MHz of prime spectrum will be auctioned, with all
channels available. Proposals have also been made that would reduce the amount of
spectrum auctioned, in which case the revenue, all things being equal, would presumably
be less.
In a study requested by Congress,14 the FCC sought comment on whether additional
spectrum should be made available for public safety, possibly from the 700MHz band.
Comments received from the public safety community overwhelmingly supported the
need for additional spectrum, although other bands besides 700 MHz were also
mentioned. The FCC did not make a specific recommendation for additional spectrum
allocations in the short-term although it stated that it agreed that public safety “could
make use of such an allocation in the long-term to provide broadband services.”15 It
qualified this statement by observing that spectrum is only one factor in assuring access
to mobile broadband services for emergency response. It further announced that it would
move expeditiously to see whether the current band plan for the 24 MHz at 700 MHz
currently designated for public safety could be modified to accommodate broadband
applications.16
9 H.R. 4241, Sec. 3410 (a).
10 H.R. 4241, Sec. 3410 (c).
11 H.R. 4241, Sec. 3410 (b); would have amended 47 USC § 543.
12 H.R. 4241, Sec. 3413.
13 “Analysis of an Accelerated Digital Television Transition,” prepared by the Analysis Group,
sponsored by Intel Corporation, May 31, 2005, page 6 at
[http://www.itic.org/archives/DTV%20Transition%20Report.pdf]. Viewed November 16, 2005.
14 P.L. 108-458, Title VII, Subtitle E, Sec. 7502 (a).
15 Report to Congress; on the study to assess short-term and long-term needs for allocations of
additional portions of the electromagnetic spectrum for federal, state and lxcal emregency
response providers, Federal Communications Commission, December 19, 2005, paragraph 99,
at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-262865A1.pdf]. Viewed December
27, 2005.
16 ibid, paragraph 100.

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Unlicensed Spectrum. There are also some who advocate that some portion of
the freed spectrum be unlicensed,17 although most industry experts favor licensing for
technical reasons related to the unique quality of signals at 700 MHz. Unlicensed
spectrum would not be sold to the highest bidder and used for the services chosen by the
license-holder but would instead be accessible to anyone using wireless equipment
certified by the FCC for those frequencies. Among the advantages of unlicensed spectrum
is the opportunity to test new technology directly with consumers instead of going through
spectrum license-holders. One of the disadvantages of unlicensed spectrum is the
possibility of interference among the transmissions of the various users, both within the
assigned bandwidth and with other bandwidths.
An alternative proposal for providing unlicensed spectrum as part of the DTV
transition is to designate so-called “white spaces” among the new digital TV channels.
To avoid interference among TV station broadcasts, channels are assigned in one market
area and left vacant in adjoining areas. For example, channel 7 is used in the New York
City area and in the Washington, DC area, but not in Baltimore. Beginning in May 2004,
the FCC requested comment on proposals for considering the use of spectrum in
television broadcast bands (Docket No. 04-186) but has yet to reach a decision.
Representatives of the televison broadcast industry have filed comments containing
engineering studies that show harmful interference would occur; other studies show no
significant interference would occur.
Spectrum Value. A significant factor in valuing spectrum is the size of the market
served. Usually this value is expressed in terms of dollars per MHz-Population. Using
this methodology, a value of $1.65 per MHz-Population, for example, yields a potential
value of $28 billion for 60 MHz of spectrum at 700 MHz. Dollar per MHz-Population
estimates for upcoming auctions are derived from results of earlier auctions for similar
spectrum. This estimated value is then typically increased or decreased depending on
assumptions about a number of variables. The different weight that analysts give to the
impact of hard-to-measure market conditions largely explains the wide range of valuations
predicted for 700 MHz auctions. For example, poor economic conditions may depress all
markets and put downward pressure on prices for spectrum, just as an exuberant market
— eager to implement new technology — may place an unusually high value on obtaining
new licenses. The usability of spectrum is an important factor as well. There is a
disincentive to invest in a non-performing asset, such as spectrum that is blocked by other
users, or spectrum that does not serve an immediate market because new technology is
not ready for deployment. In the case of spectrum at 700 MHz, there is a risk that the
spectrum will remain encumbered, despite hard dates, thereby tying up resources
indefinitely and hampering investment in new communications technologies and services.
As presently configured, 874 licenses in 60 MHz would be available for auction. Of
these, 280 licenses are considered encumbered by television broadcast stations.18
17 For example, Gene Kimmelman of the Consumers Union has reportedly confirmed that
consumer groups “would not support the establishment of a firm deadline unless Congress funds
converter boxes and makes spectrum available for unlicensed service and new entrants.” Source:
“Consumer Groups Urge Protection for 70M TV Viewers,” Telecommunications Reports, July
15, 2005.
18 700 MHz Advancement Coalition at [http://www.700MHz.org/700_MHz_band.htm].

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Time Line
Digital TV Transition and Auction of Analog Broadcast Spectrum
(Key Dates, based on S. 1932, S. Rept 309-362 unless otherwise indicated)

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