Critics Call Broadcasters’ Leap To Digital The Biggest Giveaway Of The Century

Critics call it the biggest corporate giveaway of the Century: broadcasters getting television channels worth billions of dollars - not just for the upcoming digital TV, but also possibly to sell new products such as stock quotes or all-sports channels.

The broadcasting industry, which is meeting here this week, has thwarted thus far efforts in Congress to force them to pay for the new airwave space. Even Bob Dole, when he ran the Senate, couldn’t make it happen.

“This gift takes federal largesse to a breathtaking new level,” complains Sen. John McCain, R-Ariz., who has tried repeatedly to force broadcasters to bid on the channels at a government auction.

Says cable industry chief Decker Anstrom: It “makes the sale of Manhattan for a few beads look like a hard bargain.”

The second channels have been estimated to be worth as much as $70 billion.

Broadcasters bristle at words like “gift” and “giveaway.” They say the channels are simply on loan. Once they switch to digital and its cinemaquality pictures, broadcasters will hand back their existing analog TV channels to the government, which will auction them for non-broadcast uses like mobile phone service and wireless Internet access.

Because digital technology is more efficient than existing analog, broadcasters will use one-third less spectrum than they now use once the switch to digital is complete, said National Association of Broadcasters President Eddie Fritts. “Most people outside the Beltway would consider our return of the spectrum a giveback, not a giveaway.”

But the new digital technology gives stations the equivalent of five extra channels on the same-size slice of the airwaves they are allotted. Thus, they could choose to use the extra space to provide new services - possibly for a fee.

Given that, President Clinton says broadcasters should have more public-interest obligations in exchange for using the nation’s airwaves for free. Current obligations include educational shows for children, public-affairs shows and low-cost political ads.

The Federal Communications Commission, which decided Thursday to give each of the nation’s 1,600 TV stations a second digital channel, doesn’t have the authority to make stations pay for the channels. And efforts to require payments died without action in Congress last year.

FCC Chairman Reed Hundt, who has raised more than $20 billion for the Treasury by auctioning other slices of the airwaves, would love to sell off the broadcast channels. But his hands are tied.

Hundt calls it “the single biggest gift of public property to any industry in this century.” Donald Simon, Common Cause executive vice president, says it “may be the largest corporate welfare giveaway in our nation’s history.”

Over the last decade, major broadcast interests have given more than $9.5 million in political contributions, Common Cause reports. Broadcasters are effective lobbyists and have the power to shape the news and control how and if politicians get on the air, the report said.

Broadcasters rebut those charges.

TV stations will have to spend millions of dollars each for new equipment to deliver digital TV, the industry says, and they can’t afford to spend billions to acquire the digital channels.

There’s a remote possibility that Congress, as it tries to balance the federal budget, may look to digital TV auctions as a source of revenue. Cable and computer companies will push for this.