U.S. Opens Vacant TV Airwaves for $4 Billion Market

FCC Chairman Julius Genachowski
Julius Genachowski, chairman of the Federal Communications Commission, FCC. Photographer: Andrew Harrer/Bloomberg

Sept. 23 (Bloomberg) -- Federal regulators cleared the way for technology companies to use vacant television channels for wireless data and Internet services that may be worth more than $4 billion a year.

The Federal Communications Commission voted 5-0 today to adopt rules for using the airwaves, known as white spaces. Microsoft Corp., Google Inc., Hewlett-Packard Co., Motorola Inc. and Sprint Nextel Corp. are laying plans to exploit the airwaves, which exist in all U.S. cities.

“Today we open a new platform for American innovation” that will lead to billions of dollars in private investment, said FCC Chairman Julius Genachowski.

The radio waves travel in the spectrum between television channels, and like TV signals they carry far and penetrate walls. Uses may include wireless Internet connections, remote monitoring of industrial systems such as power plants, and taking over some mobile-phone traffic to ease sluggishness for users of devices such as Apple Inc.’s iPhone.

“The FCC’s decision will create opportunities for American companies to remain at the forefront of technological innovation,” Craig Mundie, Microsoft’s chief research and strategy officer, said in an e-mailed statement. The vote will help lure investment in uses for high-speed wireless Internet service, or broadband, Mundie said.

White-space applications may generate $3.9 billion to $7.3 billion in economic value each year, according to a September 2009 study funded by Microsoft and written by Richard Thanki, a London-based analyst with Perspective Associates.

Empty Channels

New York and Los Angeles, the nation’s two biggest media markets with multiple TV stations, may have few vacant channels for the devices, according to an FCC fact sheet. Most markets have five or more empty channels.

Users of the white-space airwaves won’t need an FCC license, leaving them free to create devices for applications yet to be developed, Genachowski said in an interview before the vote.

The FCC’s “highly technical” decision “must be explored fully,” David Donovan, president of the Association for Maximum Service Television, a broadcasters’ trade group, said in a statement.

The FCC in 2008 approved white-space use over objections of television broadcasters who said their signals might be disrupted. The agency left final rules on technical standards for later, and these are the matters that came to a vote today.

The FCC’s “great step” will help extend broadband service to people in rural and urban settings, Harold Feld, legal director for the Washington-based advocacy group Public Knowledge, said in an e-mailed statement.

The FCC today also eased rules for schools and libraries to use federal money for high-speed Internet connections. Funds can be used for connections to networks or to fiber that has been installed nearby and is ready to carry Internet service, Genachowski said in a Sept. 21 speech.

AT&T Inc. opposed the subsidies plan, saying Congress intended the funds to be spent on communications providers and not directly on fiber.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.