Airwaves likened to beachfront property by those who want to use them for future wireless applications probably wont be auctioned off as scheduled this year.
The Bush administrations budget plan proposes pushing back the deadline for the 700-megahertz spectrum auction from September until 2004.
The plan also recommends the "incentive" of charging all analog television broadcasters, including those using the 700-MHz spectrum, a combined sum of $200 million per year until the analog spectrum is vacated.
The 700-MHz auction has been mired in controversy because the TV broadcasters that use the spectrum arent required to give up the analog space until 2006, provided that digital TV reaches 85 percent market penetration by then. That policy has worried potential wireless bidders that dont want to pay for spectrum before they know when they can actually use it.
Wireless companies covet the spectrum because it will allow them to add advanced wireless services, like high-speed-data, to their offerings.
Few believe the Bush administration plan to charge broadcasters for continued use of the spectrum will survive the rigorous congressional budget process.
"Its not an issue," said a spokeswoman at Paxson Communications, a broadcaster that has been instrumental in rallying together other analog broadcasters. Rep. Billy Tauzin, R-La., who chairs a powerful House committee, has vowed to fight the idea.
One source said the House budget committee is already circulating a draft budget that does not include the spectrum fee language.
The administrations plan also includes a vague statement about ensuring that broadcasters are fairly compensated for clearing the spectrum, an item that angers many.
"Compensated for what?" asked Andrew Schwartzman, president and CEO of the Media Access Project. "For returning spectrum theyre supposed to be on the path to returning anyway?"
Broadcasters, unlike wireless communications providers, were given the opportunity to use the spectrum for free, Schwartzman noted. But like all other spectrum users, they signed a waiver — required by law — by which they acknowledge they dont own the spectrum and the government has the right to rescind the licenses.
"This is fraud, plain and simple," Schwartzman said.
Even though wireless operators want the additional spectrum as soon as possible, postponing access to it could be the best solution while broadcasters continue to beam programs from the airwaves. By waiting, spectrum bidders would have a better idea of when they might be able to deliver services over the frequencies, said Herschel Shosteck, president of research and chairman of The Shosteck Group.