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Google at White House as Washington Mulls Spectrum Sales

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April 6 (Bloomberg) -- The Obama administration’s plan to allocate TV stations’ excess airwaves for use by wireless Internet services received support from 112 economists at a White House event that featured Google Inc.’s chief economist.

The effort would help move away from “old spectrum allocations based on out-of-date assumptions,” the economists said in a letter released today at the White House.

The administration proposes paying TV broadcasters for vacating little-used airwaves. The sale may bring almost $28 billion in auction fees, help meet burgeoning demand for airwaves as more consumers turn to smartphones, and spark new wireless industries, said Council of Economic Advisers Chairman Austan Goolsbee.

“We can make America’s spectrum, which is a crucial resource, an engine of prosperity and an engine of innovation,” he said.

“If we provide proper incentives, we will see much better ways to provide spectrum,” said Hal Varian, Google’s chief economist. He was among four economists to speak following comments from Federal Communications Commission Chairman Julius Genachowski, who said demand for spectrum “is rapidly outstripping supply.”

The administration wants Congress to give the FCC authority to set up auctions that would draw voluntary participation from broadcasters. The National Association of Broadcasters, a Washington-based trade group, has said the U.S. should conduct an inventory of airwaves use before acting.

House Hearing Planned

Lawmakers plan an initial hearing next week before a House subcommittee on communications and technology.

Representative Greg Walden, an Oregon Republican and chairman of the subcommittee, “has said that there should be a way to design the auction to make it worth broadcasters’ while” to return spectrum or to share airwaves, Andrew Whelan, a spokesman for Walden, said in an e-mail.

“It’s disappointing that a broadcast representative was not invited to be part of this dialogue,” Dennis Wharton, a spokesman for the National Association of Broadcasters, said in an e-mail.

The trade group “welcomes an opportunity to work with the White House, Congress and the FCC to address spectrum capacity challenges while not jeopardizing the future of broadcasting,” Wharton said.

“The administration and the FCC have been earnest in pushing forward on getting more spectrum out,” Rebecca Arbogast, a Washington-based analyst with Stifel Nicolaus & Co., said in an e-mail.

“Inviting the broadcasters to attend an event promoting spectrum auctions would be a little like inviting your ex to your prenup party,” she said. “Might be OK, but you never know what they might say.”

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

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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