UHF and microwave bandwidth deals are trading briskly, but soon all the sales that can be made will be. Lucrative prices will lure those who are holding bandwidth from previous spectrum auctions into selling it to larger players who are in full 4G deployment mode. When it’s all gone, then what?
By the time 4G LTE has spread across the nation, user demand will catch up with channel capacity. At that point, bandwidth rationing will occur. You won’t get access in a particular location until someone else moves away from the tower. Even HD video on demand and the online automobile may get stifled by too many users trying to access too few transmissions. Internet based application development that thrives on ever higher performance devices and unlimited bandwidth will grind to a halt. Technology will be stuck in place for the foreseeable future.
That’s the nightmare that both technologists and regulators will scramble to avoid. It’s happening already. The successful spectrum auctions to date have whetted the appetite of government officials, who see a way to generate revenue for the Treasury without disgruntled constituents howling about having to fork it over. The business community loves this capitalistic approach. Big telecom carriers are happy to bid up the prices for each precious channel because they know that the return on their investment will be many times over.
Look for more spectrum auctions in the next decade. The FCC is reported to be scouring every nook and cranny of channel assignments to find pieces that can be sold off at billion dollar rates. I expect that the days of over the air TV broadcasting are numbered. One suggestion being floated is for TV stations to combine their broadcasts on a single broadcast channel using the multi-program capability of the digital TV system. The incentive will be that the station owners can share in the revenue generated by selling off their licenses.
Actually, to say that over the air television is dying is not the case at all. What’s likely to happen is a technology shift away from high power broadcasts using TV industry specific standards to video programming delivered via mobile broadband. Some will raise the alarm that our legacy of free for everyone TV programing is being destroyed. The truth is the most people don’t watch over the air signals exclusively anymore. They have Cable or Satellite that offers the few local outlets plus dozens more non-aired channels. This is one reason why the transition from analog to digital went so smoothly. The set top boxes have no problem feeding either analog or digital sets equally well.
There are a couple of new trends working to make the arguments for continued over the air (OTA) broadcasting moot. Viewership on both Cable and Satellite is dropping, not as a reversion to OTA, but as a migration to the Internet for television content. Self-proclaimed “cable cutters” drop their subscription services in favor of downloading their favorite shows from network Web sites or from video subscription services such as Netflix.
The other trend is technological. The TV and the computer are merging. At the same time that cable cutters are downloading episodes of last week’s sitcom to their laptop computers or smartphones, other viewers are accessing Internet content on their living room TVs. Right now, that’s via content aggregators like Netflix and YouTube. Eventually, though, flat screen TVs will be able to access any Internet content from any site. What’s missing is a comprehensive guide that makes it easy to find, schedule and time-shift record the shows you want. Apple’s rumored Siri-based TV might be the solution. When programs on your local TV station, Cable, Satellite and the Internet are equally accessible, then OTA is just one more option on the scheduling screen. The majority of OTA viewership will eventually be via built-in WiFi or LTE broadband wireless rather than DTV transmissions.
It seems just a matter of time, perhaps within the next decade or even two, that UHF broadcast transmitters will start being shut down and the towers sold for scrap. In their place will be hundreds or even thousands of other shorter towers with cellular antennas and base stations creating LTE cells. Local stations will consolidate as a cost savings measure and the opportunity to sell their frequency license assets for considerable profit. Large urban stations with enormous OTA audiences will the last to go, eventually operating as “nightlight” services until viewership shrinks to insignificance. What might happen is multiple frequency consolidation initiatives, like the vacating of half the UHF band during the last spectrum auction. OTA stations will be corralled into a smaller and smaller broadcast band to clear more spectrum for sale.
In Part III, we’ll continue our look at how the 4G wireless bandwidth crunch will be mitigated by making more efficient use of available spectrum.
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